04.08.19 | STAT News
By Steve Brozak
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On Tuesday, the Senate Finance Committee will hold its second hearing in a series on drug pricing. Led by chairman Senator Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Oregon), this hearing is a follow-up of the widely publicized grilling in February of CEOs and senior executives of seven major pharmaceutical companies.
This time around, five executives from major pharmacy benefit managers (PBMs) will be in the hot seat.
The February meeting took a surprising turn when Pascal Soriot, CEO of AstraZeneca, raised the concept of value-based agreements (VBAs), in which the price of a medicine is directly linked to the value it provides to patients, payers, and the health care system. “Value-based agreements have the potential to transform how medicines are priced and reimbursed in the U.S.,” Soriot told the committee.
Value-based medicine isn’t a new concept, but it has made the leap from white paper to working construct in a matter of years, and value-based agreements continue to evolve rapidly in an industry known for its conservative approach. These agreements have the potential to disrupt the entire health care reimbursement system, including free-standing PBMs that aren’t able to evolve as quickly as reimbursement plans.
Cell and gene therapies nudging the rise of value-based agreements
At a recent conference in Washington, D.C., hosted by MIT’s NEWDIGS think tank, Gigi Hirsch, executive director of MIT’s Center for Biomedical Innovation, told the crowd that the drug reimbursement system “needs to catch up to the science.” (The organization has published an exemplary report detailing the issues surrounding value-based agreements.)