Trends for Performance-based Risk-sharing Arrangements

Author: Shuxian Chen

Chen_Shuxian
CHOICE Student Shuxian Chen

When considering the approval of new drugs, devices and diagnostic products, there’s always a tension between making the product’s benefits available to more people and collecting more information in trials. The restrictive design of randomized-controlled trials (RCTs) mean that their indications of effectiveness don’t always hold in the real world. They’re also unlikely to detect long-term adverse events. This uncertainty and risk make it hard for payers to make coverage decisions for new interventions.

Performance-based risk-sharing arrangements (PBRSAs), also known as patient access schemes (PAS), managed entry arrangements, and coverage with evidence development (CED), help to reduce such risk. These are arrangements between a payer and a pharmaceutical, device, or diagnostic manufacturer where the price level and/or nature of reimbursement is related to the actual future performance of the product in either the research or ‘real world’ environment rather than the expected future performance [1].

I recently developed a review paper with CHOICE faculty Josh Carlson and Lou Garrison that gave an update of the trends in PBRSAs both in the US and globally. Using the University of Washington Performance-Based Risk-Sharing Database, we have identified 437 eligible cases between 1993 and 2016 from that contains information obtained by searching Google, PubMed, and government websites. Eighteen cases have been added to the database in 2017 and 2018. Seventy-two cases are from the US.

Figure 1. Eligible cases between 1993-2016 by country

Chen_Bar Graph_March16_2018

Australia, Italy, the US, Sweden and the UK are the five countries that have the largest number of PBRSAs. (Distribution of cases from different countries can be seen in Graph 1.) Except for the US, cases from the other four countries are identified from their government programs: the Pharmaceutical Benefits Scheme (PBS) in Australia, the Italian Medicines Agency (AIFA) in Italy, the Swedish Dental and Pharmaceutical Benefits Agency (TLV) in Sweden, and the National Institute for Health and Care Excellence (NICE) in the UK. These single-payer systems have more power in negotiating drug price with the manufacturer than we do in the US.

Cases in the US are more heterogeneous, with both public (federal/state-level) and private payers involved. The US Centers for Medicare and Medicaid Services (CMS) contributes to 25 (37%) of the 72 US cases. Among these, most arrangements involve medical devices and diagnostic products and originate in the CED program at CMS [2]. This program is used to generate additional data to support national coverage decisions for potentially innovative medical technologies and procedures, as coverage for patients is provided only in the context of approved clinical studies [3]. For pharmaceuticals, there have been few PBRSAs between CMS and manufacturers – no cases established between 2006 and 2016. However, in August 2017, Novartis announced that a first-of-its-kind collaboration with the CMS has been made: a PBRSA for Kymriah™ (tisagenlecleucel), their novel cancer treatment for B-cell acute lymphoblastic leukemia that uses the body’s own T cells to fight cancer [4]. The arrangement allows for payment only when participants respond to Kymriah™ by the end of the first month. It can be categorized as performance-linked reimbursement (PLR), as reimbursement is only provided to the manufacturer if the patient meets the pre-specified measure of clinical outcomes. This recent collaboration may lead to a larger number and more variety of PBRSAs between pharmaceutic manufacturers and the CMS.

Please refer to our article for more detailed analyses regarding the trends in PBRSAs.

References:

[1] Carlson JJ, Sullivan SD, Garrison LP, Neumann PJ, Veenstra DL. Linking payment to health outcomes: a taxonomy and examination of performance-based reimbursement schemes between healthcare payers and manufacturers. Health Policy. 2010;96(3): 179–90. doi:10.1016/j.healthpol.2010.02.005.

[2] CMS. Coverage with Evidence Development. Available at: https://www.cms.gov/Medicare/Coverage/Coverage-with-Evidence-Development/

[3] Neumann PJ, Chambers J. Medicare’s reset on ‘coverage with evidence development’. Health Affairs Blog. 2013 Apr 1. http://healthaffairs.org/blog/2013/04/01/medicares-reset-on-coverage- with-evidence-development/

[4] Novatis. Novartis receives first ever FDA approval for a CAR-T cell therapy, Kymriah(TM) (CTL019), for children and young adults with B-cell ALL that is refractory or has relapsed at least twice. 2017. Available at: https://www.novartis.com/news/media-releases/novartis-receives-first-ever-fda-approval-car-t-cell-therapy-kymriahtm-ctl019

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