Reimagining Value-Based Contracts for High-Cost Therapies

The rapid expansion of cell and gene therapies and other very high-cost drugs may give value-based contracting a second life, even as policy pressures have cooled industry interest in taking on risk, according to Chester “Bernie” Good, MD, MPH, senior medical director of the Center for Value-Based Pharmacy Initiatives at UPMC Health Plan.

Good shared details from a session he took part in at the National Association of Specialty Pharmacy's inSPire2026 conference in National Harbor, Maryland, which brought together payer, pharmaceutical industry, and specialty pharmacy perspectives. He said the panelists agreed that although momentum for value-based contracts on drugs has waned in recent years, the current wave of expensive therapies "provides perhaps a new opportunity to reimagine value-based contracting."

That enthusiasm has been muted largely on the manufacturer side, Good explained, pointing to a stack of overlapping pressures: significant expansion of the 340B Drug Pricing Program, Medicare drug price negotiations under the Inflation Reduction Act, Most Favored Nation pricing negotiations, pharmacy benefit manager reform, and the current administration's direct negotiations with drugmakers. Setting a maximum fair price for negotiated drugs, in particular, makes value-based contracts difficult to structure.

"All of these things together are making it difficult for pharma to take on additional risk," he said.

One concept the session explored was moving away from traditional single-product value-based contracts toward a population model in which access, time to care, equity, and patient experience are all shared goals.

Good also highlighted a larger role for specialty pharmacies, which interact with patients far more often than do prescribing clinicians. That frequent contact, he said, "opens up the possibility of doing contracts that engage the patient," including capturing patient-reported outcomes that could help measure whether a high-cost therapy is delivering on its promise.

“Specialty pharmacies, or SPs, interact more frequently with patients than the individual prescribing care provider interacts with them, and so this opens up the possibility of doing contracts that engage the patient to perhaps get patient-reported outcomes,” said Good.