Today’s guest blog comes from Ramin Kazemi, director, Lilly Oncology payer marketing.
Value-based arrangements (VBAs) are a hot topic in health policy, in part because they’re such a departure from the traditional fee-for-service model we’re used to. For prescription drugs, including oncology medicines, a VBA usually means manufacturers provide rebates based on how well a medicine performs compared to a predefined performance-based metric, not based on utilization alone.
I see VBAs as another way for Lilly to stand behind its medicines. If our product doesn’t meet the health outcome agreed upon between Lilly and our customer, then we agree to provide a rebate to the institution or the payer who purchased it.
Of course, value-based arrangements aren’t the same as guaranteeing everyday goods and services. Establishing these arrangements in a cancer care setting depends on reaching specific, appropriate patients, and they require collaboration with strong partners willing to work at what is still a new process within a complex health care system.
The rewards, however, are great. Lilly believes these arrangements have the potential to address health care system costs, improve long-term outcomes and help patients get more personalized medicine – driving forces for the company because of their importance to patients, particularly those living with cancer. And health policy experts agree.
According to a Morning Consult poll conducted on behalf of Lilly Oncology, 84 percent of health policy experts consider VBAs important to reducing cancer care costs and 71 percent say they can improve the long-term health of people living with cancer.
It’s an exciting time for oncology treatment, with VBAs offering opportunities to affect change in how medicines are priced or reimbursed. Lilly is structuring arrangements to show that we stand behind the value of our medicines. We have agreements in development with large national payers, hospitals and clinics, and we’re exploring agreements with group purchasing organizations (GPOs), which help hospitals and similar institutions negotiate discounts with manufacturers and distributors.
What’s most meaningful to me about these partnerships is what’s behind them, though – the confidence in the innovation and value of our medicines and their potential positive impact on patients.