UPMC, AstraZeneca Enter Value-Based Pharmaceutical Contract

January 30, 2019 - UPMC Health Plan and AstraZeneca are taking on the challenge of a value-based pharmaceutical contract for one of the manufacturer’s cardiovascular medications.

Reimbursement for prescriptions of BRILINTA, a drug intended to help heart attack patients forestall or lessen the impact of subsequent events, will be connected to cardiovascular outcomes for targeted populations, the two organizations stated.

"In alignment with our commitment to ensuring patient access, lowering patient costs and sustaining innovation, AstraZeneca is pleased to collaborate with UPMC Health Plan on this novel agreement to lower out-of-pocket costs for UPMC for Life Medicare patients through dual-sided risk and proud to stand behind the value of BRILINTA® in improving patient outcomes," said Rick R. Suarez, senior vice president, US Market Access, AstraZeneca. 

The agreement builds on a new genre of value-based reimbursements slowly taking hold in the industry: tying payments for costly medications to how well they achieve stated goals.

The contract was developed by Value-Based Pharmacy Initiatives, the UPMC Insurance Services Division's nonprofit research group in collaboration with AstraZeneca and leaders from the UPMC health system. 

"This type of contract reflects the innovative work that we are leading at the Center for Value-Based Pharmacy Initiatives," said Chronis Manolis, RPh, chief pharmacy officer at UPMC Health Plan.

"For example, by incorporating two-sided risk into the reimbursement algorithm, we move further into true risk-based contracting that financially aligns key healthcare stakeholders. In addition, by offering BRILINTA® to patients at a generic tier copay, we improve access to BRILINTA® for our members and make progress toward removing cost as a barrier to medication adherence”

“Our goal at the Center for Value-Based Pharmacy Initiatives is to change the paradigm around how we pay for medicine while adding incentives in our member care model that improve our members' access to high quality medicines."

UPMC will develop a “wraparound” care model to optimize treatment and reduce barriers to care for BRILINTA patients with the goal of creating conditions to support long-term clinical success.

“The ultimate winner in this agreement is our members who stand to have greater access to an effective treatment option,” said Chester "Bernie" Good, MD, MPH, FACP, senior medical director for the Center for Value-Based Pharmacy Initiatives.

“The fact that UPMC Health Plan is willing to enter into a two-sided risk agreement underscores our commitment to leveraging the strengths of our academic clinical experts to improve clinical outcomes in a high-risk patient population."

UPMC Health Plan is taking a pioneering approach to value-based contracts for pharmaceuticals, but it isn’t the first payer to start moving pharmaceutical reimbursements out of the fee-for-service model.

In 2017, Massachusetts insurer Harvard Pilgrim Health Care announced an outcomes-based partnership with AstraZeneca for BRILINTA and Bydureon, a Type 2 diabetes medication.  The health plan also piloted pay-for-performance pharma contracts in 2015 with an arrangement involving Gilead Sciences and a hepatitis C medication.

“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 at the time.

Harvard Pilgrim also entered an agreement with Spark Therapeutrics for Luxturna, the $850,000 treatment for a rare form of vision problem, in 2018.

UPMC Health Plan and Harvard Pilgrim are among only a handful of health plans that have been able to convince pharmaceutical manufacturers to shoulder risk, however.

A 2017 survey by PwC revealed that just a quarter of pharma entities are even dabbling in the value-based environment, and more than half feel that these arrangements are not bringing total success. 

Pharmaceutical companies pointed to difficulties in setting quality measures as one of their key pain points when designing value-based contracts, and the report noted that payers seem reluctant to share data that could support more productive partnerships.

The concept of paying for a drug’s performance is still relatively new to payers and pharmaceutical companies, and working through the growing pains of value-based care will likely take some time.

However, with rising drug prices and skyrocketing out-of-pocket responsibilities for beneficiaries grabbing headlines across the country, both payers and pharmaceutical manufacturers could benefit from exploring how to fairly negotiate for high-quality, cost-effective outcomes.