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The American Journal of Managed Care September 2015
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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
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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
Assessment of current trends, success factors, and challenges in the use of risk-sharing agreements in the US private sector.
We tested the barriers identified during the interviews with a broader audience in the survey by asking respondents to rate and rank from the list of barriers provided in Figure 4 and any additional barriers not listed. The interview themes were consistent with the top barriers identified in the survey (Figure 5). The significant additional effort associated with RSAs was selected as the number 1 barrier to the use of RSAs in the United States by 33% of respondents and as the number 2 barrier by 27% of respondents. Inadequate data infrastructure was cited as the number 1 barrier by 27% of respondents and as the number 2 barrier by 33% of respondents. Other barriers that were selected as one of the top 3 hindrances to conducting RSAs in the United States included: federal (Medicaid) best price (40% ranked this as one of the top 3 barriers), significant resources/costs of adjudication (40%), challenges in measuring relevant outcomes (27%), and difficulty in reaching contractual agreement (27%).

Logistical Considerations

While not necessarily barriers, there were several logistical challenges highlighted during our interviews that may be a consideration for both payers and pharmaceutical companies when evaluating opportunities for RSAs. The number of agreements in place with a given payer or for a given class of drugs is a key consideration. While payers expressed interest in having multiple agreements for competing products, pharmaceutical manufacturers indicated this becomes a complex arrangement that they are reluctant to enter. Further, only large payers are likely to have the capability for multiple, simultaneous agreements, given the burden of negotiation, data collection, monitoring, and adjudication of RSAs. Another key consideration is duration, as payers and manufacturers agree that short-term deals are not desirable given the considerable investment in evidence development. On the other hand, they state that long-term deals are also not desirable given the costs and risks involved. Both parties acknowledge that medium-term deals (18-36 months) are the right balance trading off the sizable up-front investment and a preference to execute agreements reasonably fast.

What Works

Access to clinical data was stated as a key barrier to the use of RSAs; scenarios where clinical data are more readily available make RSAs more feasible. For instance, interviewees indicated it may be easier to measure health outcomes for drugs that are administered in settings where there are more immediate clinical data available (eg, the hospital setting), where drugs are administered in person, or when data are already being collected as part of ongoing processes (eg, performance measurement via the Healthcare Effectiveness Data and Information Set). Complex outcomes might be more easily measured where there is an active provider (eg, patient-centered medical homes). Similarly, interviewees stated outcomes-based RSAs can be most successful where the infrastructure is robust to collect such data, such as in single payer or closed settings including integrated delivery networks. Drug cost as a share of total episode cost can also be a factor.

A key success factor is the need for manufacturers to understand the amount of risk they are undertaking when entering into an RSA. Manufacturers feel they should be able to reasonably predict plausible outcomes of the agreement and assess the level of risk; for example, what level of compliance is required and to what extent the clinical trial population differs from the real-world population.

What Doesn’t Work

There are a few scenarios that are considered prohibitive to successful RSAs. Both parties indicated that trust is a critical component of agreements between pharmaceutical companies and payers. It is imperative that both parties trust the data: clear agreements on data validation and analysis are important to create trust in the data.

Certain types of agreements can also be problematic. For instance, manufacturers expressed that population-based agreements are perceived to be risky because there are many unknowns around compliance, prescribing, and so forth. Manufacturers are reluctant to take on risk when they cannot predict how their product will be used in the population. Agreements that involve the manufacturer paying for nonpharmaceutical costs are difficult to execute, as payers do not generally have the systems or data to support such agreements. Both parties shy away from agreements in disease areas where there are many different treatment paradigms or the relevant outcome is an intermediary outcome, because it can be challenging to attribute the outcome to the product in question.

Future Prospects: Barriers, Health Reforms, and Policy

This study confirms that very few private sector RSAs have been implemented in the United States; while payers and pharmaceutical companies remain interested in these types of agreements, various challenges restrict the types of situations in which they can be feasibly employed. Also, because of the effort required, payer and pharmaceutical respondents are less enthusiastic about outcomes-based agreements and more optimistic about simpler, financial-based agreements.

Although the global growth in RSAs seems to have slowed, several countries maintain robust programs, particularly Italy and Sweden, and interest is growing in Latin America and Asia. There has also been a broad shift to financial-based agreements for several reasons. Our research suggests that public payers, especially outside the United States, are attracted to making arrangements with manufacturers, first and foremost, to obtain an effectively lower price in a world where reference pricing and the prospect of parallel trade make differential (or tiered) pricing difficult. And, of course, this can benefit patients by providing earlier and broader market access. Second, few countries have an adequate data infrastructure to operate outcomes-based schemes efficiently.

The history of RSAs in the United States is dominated by the Medicare experience with CED. Although the interest remains, it seems to have waned. The growth in visible private RSAs in the United States seems to have stalled, but our interviews suggest growing interest and some new activity. There are multiple barriers in the United States—most prominently, the additional effort needed to negotiate and maintain these agreements relative to traditional rebates. The challenge of measuring individual-level outcomes in a claims-oriented data infrastructure makes operationalizing RSAs difficult because of the lack of relevant clinical outcomes contained in these data. Medicaid best price (and the similar 340B Drug Pricing Program) provisions, which link mandated discounts for public sector programs to private sector prices, are considered complications, but would seem to be manageable in a well-designed contract; notwithstanding, several interviewees regarded this as a major barrier.

If a medicine covered by an RSA does not perform as anticipated by the manufacturer and a price discount ensues, the reduced prices could be perceived as a new best price and made available to all Medicaid purchasers. In the case of Medicare, we were told that provisions around the Medicare 5-star rating program, which ties payment to achievement of certain quality metrics in health plans, have made adherence programs—a kind of outcomes-based program—attractive to payers. The preference for a short-term horizon of 18 months to 3 years being the most practicable arrangement in the US private health system, because it reduces long-term liability for manufacturers and payers, and limits the feasibility of RSAs in some disease areas.

Our interviewees were generally pessimistic as to whether the growth of ACOs would have any positive impact in the near term, since many ACOs are in the initial development and market experimentation phase11; however, they may well bring a new orientation to risk-sharing that will support the future development of pharmaceutical RSAs.

The ISPOR PBRSA Task Force emphasized that better information about what works in medicine is a global public good,1 but it still appears that the RSAs being developed in the United States will be confidential ones, with the knowledge gained only shared inadvertently or sporadically, rather than by design. Both payers and manufacturers have competitors, and they have some incentive to be “free riders” rather than developing innovative pricing schemes that yield knowledge on best medical practice. One of our payer interviewees—a national medical director for a major US payer—made this revealing and somewhat encouraging comment:

“If we learn something about a pharmaceutical by looking at our own data and we decide that we are going to use that information to make coverage determinations, it is our policy that we make that public (publish in a peer-reviewed journal). If the coverage decision is based on an economic analysis, that may be kept private; however, if the decision is based on something clinical, it has to be available for physicians and patients to evaluate.”

This suggests an important dichotomy between clinical and economic evidence, though they clearly become related when combined in a cost-effectiveness ratio or other assessment of value. It is not clear if this distinction is sustainable given that the recent joint American Heart Association and American College of Cardiology Task Force on Value and Cost called for consideration of cost-effectiveness in establishing clinical treatment guidelines in cardiology.12

The growing emphasis on comparative effectiveness research in the United States, including the establishment of the Patient-Centered Outcomes Research Institute,13 are testimony to the fact that the country is investing more in generating real-world evidence on clinical outcomes and their related economic implications. In principle, RSAs will generate some of this information, but if the results remain confidential, the new knowledge will, at best, slowly diffuse through a healthcare system that aspires to become a “learning healthcare system.” This raises the question of the need for greater public policy intervention. The following question was not part of our remit in this study, but we should be asking: Are there other policy tools or incentives that could be used to encourage and leverage US private sector RSAs to reveal their lessons for the greater good of the system and all patients?


There are a number of limitations to this study. First, there is the possibility that the database reviewed may not include the entirety of RSAs due to the confidential nature of agreements, resulting in an underestimation of the total number of RSAs in the United States. However, our interviews did not suggest a significant growth in the number of RSAs that would contradict the findings of the database review.

Additionally, the interviews and survey had a relatively small sample size, and we leveraged a convenience sample for both approaches; as a result, there is the possibility that our findings may not be generalizable to the entire US market. We attempted to mitigate this risk by including individuals from a number of organizations that might bring varying perspectives.

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