Vantage Point: Finding a balance in pay for performace agreements

Pay for performance is not a new concept between health plan payers and providers, but very recently new risk/performance-based agreements between pharmas and payers have emerged. Different from traditional negotiated rebates and discounts to payers relative to preferred formulary status, these new agreements have provisions that mutually benefit the payers and manufacturers for keeping patients healthy.

In one agreement, Merck has negotiated with Cigna to provide their diabetes medication Januvia and Janumet on preferred formulary access (low patient copay), while Cigna provides compliance programs to improve patient adherence. Cigna in return would monitor their compliant patients on Januvia and their ability to control their diabetes. Merck will offer discounts to Cigna on those patients that are compliant and getting to goal, an incentive for Cigna.

Proctor & Gamble together with sanofi-aventis have negotiated an arrangement with a regional health plan in the midwest, Health Alliance, for the osteoporosis medication Actonel. Health Alliance will place Actonel on a preferred formulary position as compared to other osteoperosis meds, such as Boniva. Health Alliance will receive reimbursement for the cost of a fracture if the patient suffering it is compliant on Actonel. 

Although other countries over the past few years have negotiated performance-based arrangements for their healthcare systems, this is clearly a ground breaking phenomena here in the US. Given the natural contention between payers and manufacturers, it will be interesting to watch whether the current financial conditions driving these new agreements will persist.

Dea Belazi, PharmD, MPH is consulting practice leader, managed markets at Wolters Kluwer Health

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