Multiple Sclerosis Treatment is Focus of New Value-Based Payment Pilot

AUGUST 15, 2017
Jared Kaltwasser
A new multiple sclerosis-focused reimbursement agreement could be the first step toward a major shift in the way high-cost drugs are paid for in America.

Abarca Health last month announced a value-based payment contract with Biogen Inc. covering a select group of multiple sclerosis (MS) drugs manufactured by Biogen. The pilot agreement means that payments for the therapies included in the deal will be tied to real-world patient outcomes.

Javier GonzalezAbarca is a pharmacy benefits manager based in San Juan, Puerto Rico. It serves more than 2 million patients. Massachusetts-based Biogen’s MS portfolio includes drugs Tecfidera, Tysabri, and Pegridy, among others.

The deal is likely to be closely watched within the healthcare industry. It comes amid something of a paradoxical time for drug companies. Scientific advances are paving the way for a number of major breakthroughs in the treatment of conditions like MS, but many of those drugs come with steep price tags at a time when many Americans are deeply concerned about rising healthcare costs. 

For instance, Genentech’s Ocrevus was highly effective at slowing MS progression in clinical trials, but it comes at a cost of $65,000 per year. And while that price tag raised eyebrows, it also garnered praise from many MS advocates, because it’s actually significantly lower than the prices of other similar new drugs.

Biogen itself has come under fire for recent increases in the prices of some of its MS drugs.

Javier Gonzalez (pictured), Abarca’s chief operating officer, said the high cost of MS therapies made it an attractive target for a value-based contract.

“Today, therapies for the treatment of MS in our book of business rank as the fourth-most expensive specialty drug class and represent 11% of all specialty costs,” Gonzalez said.  “Thus, when our partner Biogen came with an innovative idea to pilot an outcome-based approach, we accepted the opportunity to collaborate with them to implement a data-driven pricing program for MS drug therapies.”

Biogen Executive Vice President Jean-Paul Kress said he sees the deal as a big win for patients.

"We believe that contracting approaches like this will help expand access for patients,” Kress said. “We are excited to work with an innovative partner like Abarca Health and lead the way for MS care.”

Essentially, the value-based model puts pressure on drug companies to prove that their drugs are worth the price.

“Ultimately, those manufacturers and therapies that are not able to deliver reliable outcomes will become less costly to payors and will lose access to competing therapies that can demonstrate higher clinical value and results,” Gonzalez said.

Gonzalez expects this data-backed approach to help lower the overall cost of healthcare in the long run.

“Over time, if Biogen products can deliver the expected substantial clinical value and outcomes, we would expect to see increases in patient’s quality of care and reductions in the total cost of care as patients achieve clinical stabilization of their MS symptoms,” Gonzalez said.

It’s also possible the value-based data could one day be used when creating lists of “preferred” and “non-preferred” specialty drugs, as a means to encourage patients to choose drugs with higher efficacy.

More broadly, Gonzalez believes this deal will be the first of many value-based endeavors within the pharmacy benefit management industry. Abarca itself is in talks with drug companies for “5 or 6” more similar agreements.

“We are on a mission to deliver better ways to guide patients and payers down the path to value,” Gonzalez said.

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