Risk-Sharing Agreements: Possibilities & Barriers

It’s hard to ignore the health care news headlines and the growing tension between health insurers and biopharmaceutical manufacturers. Payers are concerned about committing significant outlays for new prescription medicines without guarantees that these medicines will keep people healthier and reduce health costs in the long-term. Biopharmaceutical manufacturers are similarly wary of stringent coverage decisions and restrictive formularies that limit patient access to the medicines they need.

One possible approach to address this inherent conflict of objectives that is often utilized in the European Union—less so in the United States—involves the use of risk-sharing agreements (RSAs) between payers and manufacturers, linking coverage and reimbursement levels to a drug’s utilization and documented effectiveness.

A newly released peer-reviewed study, involving the work of our researchers at the National Pharmaceutical Council along with Tufts University, the University of Washington and the Office of Health Economics in the United Kingdom, examined both the possibilities and the barriers associated with RSAs. The study was published in September 2015 issue of The American Journal of Managed Care. 

As the study points out, RSAs can benefit both insurers and biopharmaceutical manufacturers. Payers can reduce uncertainties regarding a medication’s clinical value, performance and financial impact, while manufacturers can utilize RSAs to differentiate and demonstrate the effectiveness of their drug versus those of their competitors. 

The execution of such agreements, however, is problematic, explaining why they are seldom utilized in the U.S. Our study found that a major barrier concerns the elaborate data infrastructure necessary to monitor individual patients’ pharmaceutical usage and health outcomes. And understandably, manufacturers are reluctant to expose themselves to financial setbacks when they can’t control how and if patients are taking their medications.

What stakeholders told us in our research, though, is that innovative changes in the health care environment may make the use of RSAs more practical and appealing.

As data collection and analysis systems become more sophisticated, and as health care payment and delivery systems continue to transition from pay-for-volume to pay-for-value, the obstacles to innovative interactions between the payer and pharmaceutical sectors may begin to diminish.

And as NPC Chief Science Officer Robert Dubois, MD, PhD, points out in this video, the expanded use of accountable care organizations in health care delivery means that more health providers will be taking on more risk and sharing it with pharmaceutical manufacturers which, he said, “might be very, very advantageous to all.”

 

At this point, there are no noticeable trends in the U.S. toward the adoption of creative risk-sharing relationships. As all players in the health care industry, continue to wrestle with critical issues of access and cost, however, this is certainly an area worth monitoring.