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Harvard Pilgrim Enters Outcomes-Based Pharmaceutical Contracts

Harvard Pilgrim Health Care has expanded its outcomes-based care contracts for certain pharmaceuticals by using outcomes as a metric for drug costs.

Harvard Pilgrim expands drug performance contracts

Source: Thinkstock

By Jesse Migneault

- Harvard Pilgrim Health Care has signed a three-year value-based care contract with drug maker AstraZeneca for two therapies used to treat acute coronary disease and type 2 diabetes.

The arrangements will use patient outcomes as a measure of the effectiveness of each treatment, which will be incorporated into reimbursement rates for the drug manufacturer.

“Our goal in structuring the outcomes-based contracts is to link the ultimate cost of these medicines to their real-world clinical effectiveness so that patients are the focus,” said Harvard Pilgrim Healthcare in a statement to

“If the medicines fail to meet agreed upon outcomes in real patients, the drug company is paid less.”

AstraZeneca’s Brilanta, a medication that treats acute coronary disease by lowering a patient’s chance of having a repeat heart attack or suffering a fatality from one, is part of the arrangement.

Harvard Pilgrim will monitor the number of return hospitalizations for patients treated with Brilanta after they are discharged from the hospital.  Any reduction in return visits achieved for acute coronary syndrome will be measured against patients receiving an oral antiplatelet therapy.   If a reduction in visits is recorded, that will factor into the price paid for the drug.

A second contract is for Bydureon, a medication to treat type 2 diabetes by controlling blood glucose levels. Harvard Pilgrim will monitor how well the drug helps patients stay within established HbA1c parameters.

Harvard Pilgrim began this innovative approach to establishing drug costs in 2015, as the first regional health plan in New England to negotiate both outcomes-based contracts as well as value-based and pay-for-performance contracts with drug companies.

The first contract implemented was in 2015 with Gilead Sciences for Harvoni, a new Hepatitis C medication.   This experimental arrangement resulted “in millions of dollars in savings for its customers and help to slow the growth of escalating healthcare costs,” according to a statement from Harvard Pilgrim. 

AstraZeneca (Brilanta, Bydureon), will join fellow drug makers Eli Lilly (Forteo, Trulicity), Amgen (Repatha, Enbrel), and Novartis (Entresto) with having pay-for-performance discounts or outcomes-based contracts with the insurer for specific medications.

“Real world performance may differ from what is observed in well-controlled clinical trials, and the willingness of pharmaceutical companies like AstraZeneca to go at risk for delivering on these outcomes sends a positive message to health plans, prescribing physicians, and patients,” said Harvard Pilgrim Chief Medical Officer Michael Sherman

Harvard Pilgrim Healthcare added that it plans to expand its outcome-based contracts, and other innovative payment arrangements, to other drugs and procedures in the future. 


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