ABSTRACT
In a pharmaceutical market environment with an increasing focus on “value” and long-term impact on patient outcomes, there is a natural opportunity to tie payment to performance through value-based agreements (VBAs). Seven types of VBAs are described and illustrated with case studies: pay-for-response, patient warranty, risk sharing, treatment cost capitation, budget capitation, Netflix model and mortgage model. Particularly in Europe and Australia, many deals have been made under the terms risk sharing, outcomes-based contracting, innovative contracting, patient access scheme, coverage with evidence development and managed entry agreement. Managed Entry Agreements often refer to deals made with payers as a way to address affordability and willingness-to-pay of lower- and middle-income countries in comparison with the US and Europe. An increased emphasis on providing “value,” demonstrating meaningful long-term patient outcomes and the emergence of value-based payment arrangements provide new opportunities for value-based agreements, which are often interchangeably referred to as risk sharing or innovative contracting.
