Value-Based Contracting - Prime Therapeutics
Tie costs to outcomes with VBCs
See how we’re reinventing the current drug payment model in Medicaid.
Value-based outcomes
Value-based contracts (VBCs) are performance-based reimbursement agreements between health care payers and pharmaceutical manufacturers in which the price, amount or nature of reimbursement is tied to value-based outcomes.
For decades, the Centers for Medicare & Medicaid Services (CMS) has promoted value-based reimbursement for quality outcomes within the delivery system. Current CMS guidance advocates for states and drug manufacturers to contract on a metric other than price, by linking the cost of a drug to the value it provides.
For decades, the Centers for Medicare & Medicaid Services (CMS) has promoted value-based reimbursement for quality outcomes within the delivery system. Current CMS guidance advocates for states and drug manufacturers to contract on a metric other than price, by linking the cost of a drug to the value it provides.
The current landscape
With the dawn of multimillion dollar, potentially curative cell and gene therapies, the traditional rebate-per-unit model is no longer a viable solution for Medicaid payers.
One JAMA Pediatrics study found that if a $1.85M sickle cell gene therapy was administered to only 7% of eligible patients annually, the average one-year budget impact per state Medicaid program would be nearly $30M.¹
One JAMA Pediatrics study found that if a $1.85M sickle cell gene therapy was administered to only 7% of eligible patients annually, the average one-year budget impact per state Medicaid program would be nearly $30M.¹
25-30M
25-30M people in the U.S. are affected by rare diseases and conditions.
7,000
7,000 rare diseases have been identified.
7%
7% of rare diseases have currently approved treatments.
~2X
Forecasts predict PMPM spend to almost double by 2025 for Medicaid.
Our innovative solution
Historically, states have encountered a range of barriers to adopting VBCs. To address these challenges, Prime Therapeutics launched Value Plus, the first multistate VBC solution designed to help state Medicaid programs secure access to cell and gene therapies for patients while helping to ensure the cost of these therapies is linked to the value they provide.
C> support
State Medicaid programs secure access to cell and gene therapies (C>s) for patients while ensuring cost is linked to value.
Higher participation
Value Plus helps keep the cost of data aggregation services low to encourage higher state participation.
Measured outcomes
We pool state lives to achieve statistically measured outcomes for orphan drugs or rare diseases.
Efficiency
With Value Plus, we improve operational efficiency for the management of VBCs in state Medicaid programs.
Example program savings
Product X is a curative, single-dose cell and gene therapy drug with a one-time cost of $1 million.
The state estimates they will treat 10 patients with Product X over the next 12 months for a total spend of $10 million.
Product X
$1 MILLION
X
State estimate
10 PATIENTS
=
Total spend (12 months)
$10 MILLION
Product X successfully treats 70% of patients but fails to achieve clinical endpoints in 30% of patients.
Manufacturer Z offers a full, 100% refund on all treatment failures (3 out of 10 patients, or $3 million).
Product X unsuccessful treatment
3 PATIENTS
X
Manufacturer Z
100% REFUND
=
Manufacturer refund on failures
$3 MILLION
Under this VBC
The net cost to the state for Product X is $7 million total or $700,000 per patient.
Net cost
$7 MILLION
=
Per patient
$700,000
Footnotes
¹ DeMartino, P., Haag, M. B., Hersh, A. R., Caughey, A. B., & Roth, J. A. (2021). A budget impact analysis of gene therapy for sickle cell disease: The Medicaid perspective. JAMA Pediatrics, 175(6), 617. https://doi.org/10.1001/jamapediatrics.2020.7140
Login Portals
Compliance / Legal
Careers
© 2024 Prime Therapeutics LLC