Value-Based Agreements in Healthcare: Willingness versus Ability

Although pharmaceuticals represent 10% of the overall US healthcare expenditure, the US drug spending and drug pricing are often the most scrutinized areas. For example, President Donald Trump’s “American Patients First” blueprint, which was released in May 2018, is intended as a proposal for multiple cost-reducing strategies, alongside extensive media coverage of drug price hikes for certain manufacturers. Pressure to reduce drug costs has only intensified over the past decade, inspiring increased collaboration and experimentation throughout the pharmaceutical industry.

In addition, the Affordable Care Act influenced a shift from volume to value, which has extended to the payment-delivery models used between health insurers (or payers) and pharmaceutical manufacturers. One such delivery strategy involves value-based contracts, which are designed to align drug prices with the way the drug performs outside of clinical trials or in the real-world setting.

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