Transitioning to Value Based Medical Care Payments

Five Best Practices for Health Plans




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One Response

  1. Value Based Rx Contracting Tactics and Techniques: Navigating Legal and Regulatory Complexities

    Value-based pharmaceutical contracts, sometimes referred to as risk sharing agreements between pharmaceutical manufacturers and health plans or other purchasers are critical in today’s very complex and costly healthcare marketplace. These agreements allow placement of high-risk, high-cost and often times specialty pharmaceutical products onto purchaser formularies through basing payment on outcomes as opposed to volume metrics. The concept has become popular in single payor systems, and is beginning to take flight in the U.S. as evidenced by several high profile value based contracts between pharmaceutical manufacturers and health plans. However, as with every new concept in the U.S. health care arena, there are growing pains, fear and uncertainty.

    In order to establish a value-based contract, pharmaceutical manufacturers as well as purchasers must understand the complexity of these agreements and the legal implications associated with it. Manufacturers will need to ensure safe harbor protection under the Anti-Kickback Statute to enter qualified value based contracts. As there is a greater exchange of more data between stakeholders, manufacturers must mitigate HIPAA risks including reporting of adverse events and sharing of patient data. They must also understand the legal regulations necessary to take into account within value based contracts.

    Special concerns must be addressed in pharmaceutical value based agreements with non-traditional purchasers such as hospitals, hospital systems, integrated delivery networks (IDNs) and ACOs. These challenges include rebates and government programs, and incorporating provisions in regard to these agreements to compliantly address best price calculations.

    Sidley Austin
    William A. Sarraille

    via Ann Miller RN MHA


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