Discussion 7: Value-Based Pricing: The Role of Outcomes Data in Pricing Models

Dr Cliff Goodman leads a discussion featuring panelists including The American Journal of Managed Care’s co-editor-in-chief, Dr Michael Chernew. Topics of the discussion include the impact of value-based pricing in the market, and how different pricing models such as bundled payments or accountable care organizations impact risk factors.

Dr Goodman specifically asks Kirby Eng, RPh, how CVS Caremark manages oncology care and pharmacy benefits. Mr Eng suggests while CVS has some leverage over costs, long drug patents and specialty drugs can make discounting difficult.

Dr Dunn relates his experiences at VRX pharmacy, a pharmacy services management company.

“This concept of value-based pricing or cost-effectiveness—whatever you call it—is not a new concept. I think part of the challenge is what the FDA requires of pharmaceutical companies is not what we, as payers, need and it’s not what providers need,” Dr Dunn says. “There’s a total disconnect there. So, if you look at the outcomes of a lot of different studies or a lot of different drugs, they may look very similar, but when you do put that price into the equation, the delta between these things is very, very different.“

The panelists also discuss appropriate utilization of drugs, the role of an engaged and informed patient, and what role healthcare reform might play in oncology drug costs.

Dr Chernew says, ”What I believe will probably happen, if we do things right, is through aspects of personalized medicine and some of the things we saw yesterday, we will see markets for some of these drugs shrink. That will necessitate higher prices for particular drugs, but the goal in economics is not to focus on the price per dose; it’s to focus on the value you get in your insurance premium.”