How are Value-Based Arrangements Different?

When a patient seeks medical care, the health care system’s top goal should be improving the patient’s health – and industry should be evaluated based on how well the patient’s health improves.

This seems obvious – but it’s not how our current payment system works.

Under the existing fee-for-service model, payments are based on the number of treatments or services provided, not whether a patient actually sees improvements in their health. Innovative value-based arrangements could be a part of the solution.

In the past five years, Lilly’s piloted nearly 20 of these programs. We believe that value-based arrangements have the potential to improve patient outcomes while lowering costs for the entire health care system. And we think this is one of the most important changes, long term, we can make as an industry.

At Lilly, we stand behind our medicines in an ever-changing environment and support value-based arrangements that align incentives in the health care system and promote patient access.

“Through innovative approaches to paying for new medicines that recognize improvements in care, we can deliver better outcomes for patients,” Erin Huntington, senior director, Lilly Payer Strategy & Marketing, said during a recent Eye for Pharma conference.

Each value-based agreement we participate in becomes an opportunity to get better at predicting the kind of meaningful real-world data we need.

An outcomes-based agreement includes predefined patient health outcomes metrics based on an observed impact of the person taking a medicine – such as test results or reducing re-hospitalization rates. The agreement is based on what will bring value to both the patient and the health care system.

Value-based arrangements are a promising development. We strongly believe that outdated policies and regulations should not prevent the development of new, better ways to pay for medicines.

We want to create a system in the United States where pharmaceutical innovators are rewarded - not for the number of products they sell - but for the value their products deliver.

By achieving appropriate, updated public policies, we can encourage innovative solutions that provide patients with affordable access to new medicines, and we stand alongside other industry leaders in encouraging new regulations that could help value-based arrangements flourish. After learning more about them, we hope you’ll agree.

 Interested in learning even more about value-based arrangements? Read Lilly and Anthem’s report, “Promoting Value Based Contracting Arrangements.”