New Consortium to Advance Value-Based Payment for Medical Products

The Robert J. Margolis, MD, Center for Health Policy at Duke University announced today that it is forming a first-of-its-kind consortium to address key practical issues in advancing value-based payment arrangements for pharmaceuticals, medical devices, and innovative gene technologies. The consortium—composed of patient advocates, payers, manufacturers, and providers, as well as experts on regulatory affairs, law, and policy—will develop approaches to payment reform that support better outcomes for patients and better value across the system.

The consortium, “Developing a Path to Value-Based Payment for Medical Products,” was formed to address rising concerns over a rapidly maturing medical product pipeline with many innovative--yet costly—therapies. By identifying opportunities to improve patient care and reduce barriers to adoption of innovative therapies, the consortium will work to identify solutions that address competing demands of complex healthcare systems with the aim of better health outcomes and lower cost of care.

Value-based payment arrangements can support alignment of payment for medical products with provider payment reforms that reflect the value and link to outcomes, which can include clinical measurements, patient-reported outcomes, overall utilization, or other performance measures. For example, payers, providers, and manufacturers participating in value-based payment arrangements could share risk by having a direct financial stake in the performance of the medical product, aligning their payments with success in achieving high-value care.

“Moving from payment arrangements based on volume to those based on value is not easy,” said Duke-Margolis director Mark McClellan, MD, PhD, “Our consortium members represent a wide range of perspectives but share a common goal of payment models that encourage innovation, resulting in better outcomes for patients at a sustainable cost.”

Gregory Daniel, PhD, MPH, the Center’s deputy director, said, “We have the technical and methodological tools to incorporate real-world evidence into measures of value, but need to advance the discussion about how and where it is used and address its application to emerging biomedical products.”

The consortium will seek to overcome current barriers to value-based payment arrangements by identifying and developing solutions to legal and regulatory issues, and by addressing operational challenges such as fragmented and difficult-to-track patient outcome data. Additionally, the group will develop conceptual frameworks for structuring value-based payment arrangements, facilitate stakeholder input and support, and explore other innovative approaches leading to greater value. Individual working groups will focus on supporting payment model innovations specific to medical devices, gene technologies, and pharmaceuticals used for chronic conditions.

About Duke-Margolis

The Robert J. Margolis, MD, Center for Health Policy at Duke University brings together expertise from the Washington, DC policy community, Duke University and Duke Health to address the most pressing issues in health policy.

The Center’s mission is to improve health and the value of health care by developing and implementing evidence-based policy solutions locally, nationally, and globally. For more information, visit healthpolicy.duke.edu.

Participation of private or non-profit organizations in Center activities does not imply an endorsement by Duke University or associated entities. As part of Duke University, Duke-Margolis honors the tradition of academic independence on the part of its faculty and scholars. Neither Duke nor the Margolis Center take partisan positions, but the individual members are free to speak their minds and express their opinions regarding important issues. For more details on relevant institutional policies on research independence and conflict of interest, please visit our web site.