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The American Journal of Managed Care September 2015
Do Patient or Provider Characteristics Impact Management of Diabetes?
Erin S. LeBlanc, MD, MPH; A. Gabriela Rosales, MS; Sumesh Kachroo, PhD; Jayanti Mukherjee, PhD; Kristine L. Funk, MS; and Gregory A. Nichols, PhD
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S. Yousuf Zafar, MD, MHS; Fumiko Chino, MD; Peter A. Ubel, MD; Christel Rushing, MS; Gregory Samsa, PhD; Ivy Altomare, MD; Jonathan Nicolla, MBA; Deborah Schrag, MD; James A. Tulsky, MD; Amy P. Aberne
Building Upon the Strong Foundation of National Healthcare Quality
Charles N. Kahn III, MPH, President and CEO, Federation of American Hospitals
Improving Partnerships Between Health Plans and Medical Groups
Howard Beckman, MD, FACP, FAACH; Patricia Healey, MPH; and Dana Gelb Safran, ScD
Innovative Approach to Patient-Centered Care Coordination in Primary Care Practices
Robin Clarke, MD, MSHS; Nazleen Bharmal, MD, PhD; Paul Di Capua, MD, MBA; Chi-Hong Tseng, PhD; Carol M. Mangione, MD, MSPH; Brian Mittman, PhD; and Samuel A. Skootsky, MD
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Private Sector Risk-Sharing Agreements in the United States: Trends, Barriers, and Prospects
Louis P. Garrison, Jr, PhD; Josh J. Carlson, PhD; Preeti S. Bajaj, PhD; Adrian Towse, MA, MPhil; Peter J. Neumann, ScD; Sean D. Sullivan, PhD; Kimberly Westrich, MA; and Robert W. Dubois, MD, PhD
Predicting Adherence Trajectory Using Initial Patterns of Medication Filling
Jessica M. Franklin, PhD; Alexis A. Krumme, MS; William H. Shrank, MD, MSHS; Olga S. Matlin, PhD; Troyen A. Brennan, MD, JD, MPH; and Niteesh K. Choudhry, MD, PhD
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Rebecca Paradis, MPA
Payer Source Influence on Effectiveness of Lifestyle Medicine Programs
Joseph Vogelgesang, BS; David Drozek, DO; Masato Nakazawa, PhD; Jay H. Shubrook, DO
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Schelomo Marmor, PhD, MPH; James W. Begun, PhD; Jean Abraham, PhD; and Beth A. Virnig, PhD, MPH
Targeting a High-Risk Group for Fall Prevention: Strategies for Health Plans
Lee A. Jennings, MD, MSHS; David B. Reuben, MD; Sung-Bou Kim, MPhil; Emmett Keeler, PhD; Carol P. Roth, RN, MPH; David S. Zingmond, MD, PhD; Neil S. Wenger, MD, MPH; and David A. Ganz, MD, PhD
Socioeconomic Disparities Across Ethnicities: An Application to Cervical Cancer Screening
Brendan Walsh, PhD; and Ciaran O’Neill, PhD

Private Sector Risk-Sharing Agreements in the United States: Trends, Barriers, and Prospects

Louis P. Garrison, Jr, PhD; Josh J. Carlson, PhD; Preeti S. Bajaj, PhD; Adrian Towse, MA, MPhil; Peter J. Neumann, ScD; Sean D. Sullivan, PhD; Kimberly Westrich, MA; and Robert W. Dubois, MD, PhD
Assessment of current trends, success factors, and challenges in the use of risk-sharing agreements in the US private sector.
ABSTRACT
 
Objectives: Risk-sharing agreements (RSAs) between drug manufacturers and payers link coverage and reimbursement to real-world performance or utilization of medical products. These arrangements have garnered considerable attention in recent years. However, greater use outside the United States raises questions as to why their use has been limited in the US private sector, and whether their use might increase in the evolving US healthcare system. 

Study Design: To understand current trends, success factors, and challenges in the use of RSAs, we conducted a review of RSAs, interviews, and a survey to understand key stakeholders’ experiences and expectations for RSAs in the US private sector.

Methods: Trends in the numbers of RSAs were assessed using a database of RSAs. We also conducted in-depth interviews with stakeholders from pharmaceutical companies, payer organizations, and industry experts in the United States and European Union. In addition, we administered an online survey with a broader audience to identify perceptions of the future of RSAs in the United States.
Results: Most manufacturers and payers expressed interest in RSAs and see potential value in their use. Due to numerous barriers associated with outcomes-based agreements, stakeholders were more optimistic about financial-based RSAs. In the US private sector, however, there remains considerable interest—improved data systems and shifting incentives (via health reform and accountable care organizations) may generate more action.

Conclusions: In the US commercial payer markets, there is continued interest among some manufacturers and payers in outcomes-based RSAs. Despite continued discussion and activity, the number of new agreements is still small.
 
Am J Manag Care. 2015;21(9):632-640
Take-Away Points
 
This research assessed whether risk-sharing agreements between US commercial payers and pharmaceutical companies may become of greater interest with improved data systems and shifting incentives (via health reform and accountable care organizations). Key findings: 
  • While such agreements offer numerous advantages to payers, pharmaceutical companies, patients, and society, their growth remains stagnant in the United States, due in large part to the additional effort required to implement and adjudicate risk-sharing agreements as compared to traditional rebates. 
  • In the US private sector, however, there remains considerable interest: improved data systems and shifting incentives may generate more action.
Risk-sharing agreements (RSAs) between drug manufacturers and payers—also called performance-based risk-sharing arrangements (PBRSAs), managed entry agreements, patient access schemes, and coverage with evidence development (CED), among other terms—link coverage and reimbursement levels to real-world performance or utilization of medical products.1 These arrangements have garnered considerable attention in recent years: a recent analysis of the University of Washington Performance-Based Risk-Sharing (PBRS) Database,2 including 148 arrangements over the last 2 decades, concluded that although the overall pace of adoption seems to be slowing, several new countries have begun to implement RSAs.3 In the United States, the largest number of arrangements has been in the Medicare program; the uptake of private sector RSAs seems stagnant despite growing interest in the general principle of “paying for performance.” The aim of this study was to assess the state of and prospects for private sector RSAs in the United States, considering by comparison experiences from other countries, most commonly involving public payers.

RSAs offer a number of potential advantages,1,4-8 including: 1) reducing the risk to payers of making a suboptimal purchase; 2) providing earlier access to medications for patients; 3) creating international pricing efficiency, especially in a world with external reference pricing and parallel trade; and 4) generating evidence on what works in the real world. These potential advantages, coupled with the higher volume of use outside the United States, raise questions as to why they have seen limited use in the United States,9,10 as well as what arrangements might gain traction with the new emphasis on accountable care organizations (ACOs), which operate under stronger incentives to manage patient care efficiently.

Previous work in this area has characterized the types of RSAs, trends in their adoption, economic incentives and rationale, and the drivers and barriers for adoption, but has not focused on current thinking in the US private sector. A broad distinction has been made between “outcomes-based” RSAs and “financial-based” RSAs. For the former, the manufacturer provides or agrees to rebates, refunds, or price adjustments if their product fails to meet agreed-upon clinical outcome targets. For the latter, reimbursement is tied to financial measures (eg, total sales) or to utilization. Here, we focus on the US private sector marketplace and particularly on the level of interest in outcomes-based agreements; specifically, we sought to understand the barriers to and drivers of developing private sector RSAs in the United States. We also explored whether the current situation reflects a broader demand by regulators and payers for greater real-world data and comparative evidence.


METHODS
To assess the validity of the general perception of the lack of uptake of RSAs in the United States, we conducted a review of the University of Washington’s PBRS Database to assess the number of US agreements and trends in the number of agreements over time. For comparison, we also examined the number of agreements for the rest of the world. At the time of the study, the database included information on RSAs initiated from January 1993 to December 2013, with information on the parties participating in the arrangement, the type of arrangement, and details of the arrangement and/or outcomes, as available.

To understand current trends, success factors, and challenges in the use of RSAs, we conducted key informant interviews and an online survey to understand key stakeholders’ experiences with RSAs both inside and outside the United States as well as lessons for the US private sector situation. We used purposive sampling to identify 16 key stakeholders from pharmaceutical companies, payer organizations, and industry experts in the United States and European Union. We developed the interview guide and survey based on previous work in the area1,2 and through iterative review and revision by a group of content experts. The key informant interviews consisted of in-depth, 1-hour telephone interviews conducted between October 2013 and May 2014. Interview topics included: experience with RSAs, motivating factors, administrative considerations, effectiveness of agreements, and potential for use in the future (eAppendix A, available at www.ajmc.com). To identify themes from the interviews, we assessed the number of interviewees who stated or generally agreed with key statements across all interviews.

The survey was administered via the Web in May 2014, and consisted of 8 questions that asked respondents about their expectations for the future of RSAs in the United States and to identify and rank key barriers to their use (eAppendix B). We identified themes by assessing the number of respondents who provided similar answers to the surveys. We invited a convenience sample of 37 individuals to complete the survey. Given the small sample size, we summarized responses using descriptive statistics.


RESULTS
Our review of the PBRS Database identified 148 RSAs worldwide from the late 1990s and 2013. Only 18 of the 148 total arrangements in the University of Washington Database, or 12.2%, represent US RSAs: 11 of these were public sector coverage with evidence development schemes, while only 7 were private sector RSAs. A review of the number of agreements annually suggests a little growth in the number of agreements in the United States. To date, RSAs have been more frequently employed in single-payer systems across Europe, Canada, and Australia.

Of the 16 individuals targeted for our key stakeholder interviews, we were able to schedule and conduct interviews with 14 (87.5%). The 14 in-depth interviews included 9 interviews with US stakeholders and 5 interviews with EU stakeholders. Of these, 7 were from pharmaceutical companies, 5 were currently or previously employed by payer/government organizations, and 2 were subject matter experts. We received 15 responses to our survey (response rate of 40.5%), including 10 responses from individuals from pharmaceutical companies, 3 from payers/pharmacy benefit managers, and 2 from other nonprofits and consultancies. The majority of respondents (93.3%) were from the United States.

In general, our interviews suggest that while there is interest in RSAs, there has been limited use in the United States due to difficulties in implementing and carrying out such agreements. The majority of interviewees (12 of 14) were cautiously to mildly optimistic about the future potential for outcomes-based RSAs to be adopted in the United States. To illustrate the basis of this position, selected comments and quotations from interviews are shown in Figures 1, 2, and 3, and are organized to represent comments ranging from more optimistic, to cautious, to more pessimistic. Roughly half of manufacturers and payers expressed interest in outcomes-based RSAs and see value in their use; almost all were optimistic about the use of financial-based RSAs. In general, due to the difficulty in implementing and executing outcomes-based RSAs, interviewees indicated an interest in more financial-based RSAs (eg, utilization or financial capitation) but less interest in clinical and health outcomes-based RSAs.

Outcomes-based agreements, while attractive to some, were perceived by interviewees to be difficult to execute and as having high transaction costs. Interview respondents were skeptical about being able to use outcomes-based RSAs, citing challenges in implementing and executing outcomes-based RSAs that would mitigate their potential in the United States, particularly given the fragmented payer system with patient movement across plans, as well as the current lack of data infrastructure that limits feasibility and, to some extent, interest in measuring long-term outcomes. Interview respondents indicated that simpler, financial-based agreements, on the other hand, have had demonstrated success. The survey responses corroborated the general support for financial-based RSAs seen in the interviews: 80% of respondents stated that the use of financial-based RSAs in the United States would grow.

Reasons to Use RSAs

The interviews suggest that the perceived value of an RSA versus a traditional discount mechanism depends on the product, disease area, and availability of the necessary data infrastructure. The manufacturers we interviewed stated that they would use RSAs as a way to differentiate and demonstrate the effectiveness of their product versus competitors. RSAs are typically not used in a US setting when a product is first to market or the market leader, but are more attractive to manufacturers when there is competition. The manufacturer seeks to secure beneficial formulary placement or gain market share. They can also be a mechanism to increase patient compliance.

Based on our interviews, US payers leverage—or would like to leverage—RSAs as a way to reduce uncertainty about a product’s clinical value, performance, or budget impact, as they allow payers and patients to gain experience with the medication. As payers and regulators are often interested in different types of data, at the time of launch, a product’s impact on costs and comparative effectiveness is often not well understood. Ultimately, payers expressed interest in RSAs as they allow payers to ensure that the price of a drug is more closely aligned to its value. During our interviews, payers indicated interest in RSAs for products that are more costly (eg, specialty drugs, biologics, combination products) and for disease areas for which cost consequences are substantial. Payers are not interested in engaging in RSAs for undifferentiated products where there is no real or perceived advantage.

Barriers to Using RSAs

Figure 4 lists potential barriers to implementing RSAs that were identified during the interviews. The implementation and execution of RSAs is perceived to present a significant administrative burden that requires a substantial time investment. Further, outcomes-based agreements require significant payer and provider infrastructure: if payers lack the databases required to track individual patients, outcomes-based RSAs are difficult. Additional challenges that were mentioned include a) the need for adequately trained staff, b) the risk to pharmaceutical companies associated with being responsible for outcomes when they cannot control the way a drug is prescribed or used, c) the management of consequences in terms of changing preferred drugs and denying coverage for drugs, and d) the identification of outcomes that are meaningful but measurable within a reasonable time frame.

 
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