Outcomes-Based Contracting in Lung Cancer

John Fox, MD, MHA: There has been a lot of interest and buzz around outcomes-based contracting in the last several years. As a health plan, we entered into an agreement with a manufacturer in the non—small cell lung space with an outcomes-based contract. We did it not because we thought there were large dollars at stake, but because we wanted to understand how we could operationalize and execute an outcomes-based contract. And there were several interesting factors that came into play. The first was, could we agree on an outcome that was clinically relevant and consistently measured? Second, could we measure it in a reasonable timeframe? And third, was there sufficient volume to be able to measure that, credibly, over time?

We agreed on an outcome. It was progression-free survival because that was in the manufacturer’s label. The progression-free survival in the clinical studies was fixed, and we agreed that for patients who had a progression-free survival that was shorter than that, that the manufacturer would reimburse us if it was longer.

It was a real challenge to implement, and it taught us a lot of things. As opposed to overall survival, where you just have to know whether or not the patient was dead or alive, for progression-free survival, you need to understand why the patient switched therapy or why they stopped. In our system, we have access to a health information exchange (including radiology records), so we could tell from the record whether or not a patient had progressed. But if we couldn’t tell from the imaging study, then we’d have to go back to the EMR (electronic medical record). So, we learned a lot in that study, not only about how to structure this clinically, but also the legal and contractual issues associated with that.

The important message is that it can be done. It’s not easy, but I think in the future, that’s going to become the requisite for working with the manufacturer. It’s clear that as a health plan, payers around the country are trying to move providers toward at-risk contracts. And providers, likewise, are looking for partners who are willing to be accountable. So, health plans are trying to make physicians and delivery systems more accountable, and likewise, physicians, as well as plans, are looking for partners, or manufacturers, who are willing to be accountable for those outcomes, too. I think this is the start of an interesting era where manufacturers not only produce drugs, but also take accountability for their outcomes.

In many cancers, and certainly in non—small cell lung cancer, there are now a plethora of different agents or drug combinations that can be used. In the immunotherapy space, we have 3 therapies on the market, but there will be many more. And the question, I think, for health plans and for provider groups is, do we have a preferred agent in that space? Certainly, groups or manufacturers who are willing to take risk for their outcomes will be, maybe, in a preferred position, especially given the extraordinary cost to some of these therapies and even more extraordinary cost when they’re used in combination.