Value-Based Payment for Medical Products

Value-Based Payment for Medical Products


Overview

Amidst the broader shift from a fee-for-service (FFS) payment structure to a value-based U.S. healthcare marketplace, significant concerns have arisen over a medical product pipeline that is full of innovative - but also high-cost - therapies. These concerns have led to increased interest in developing new payment and alternative financing models for health care that strive to ensure better outcomes for the dollars spent, and thus higher value. Some limited but growing experience exists with these models, broadly referred to as Value-Based Payment (VBP) arrangements, but key regulatory, operational, and infrastructure challenges remain.

 

Our Approach

Duke-Margolis has formed a Value-Based Payment Consortium to address these challenges and to better align policies for VBP implementation. The Consortium—composed of patient advocates, payers, manufacturers, and providers, as well as experts on regulatory affairs, law, and policy—is developing approaches to payment reform that support better outcomes for patients and better value across the system. The Consortium seeks to overcome current barriers to VBP 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 VBP arrangements, facilitate stakeholder input and support, and explore other novel approaches leading to greater value.

In addition to the Consortium, the Margolis Center is undertaking complimentary work to further support advancement of value based payment. These activities have included workshops dedicated to advancing payment reforms for Alzheimer’s therapies and within the oncology space, as well as a survey with the National Pharmaceutical Council to better understand the negotiation process for Value-Based Payment arrangements. Additionally, Duke-Margolis has been engaging stakeholders to develop and refine a proposal that would provide developers with a return of investment for Antimicrobial Innovation while also supporting stewardship.

 

Background on the Issue

Duke-Margolis has produced a white paper to provide background on value-based reimbursement for medical products, which can be downloaded.

Value Based Payment Background Paper

 

Transformative Therapies

Duke-Margolis, with guidance from its Value-Based Payment for Medical Products Consortium outlines novel value-based payment models and how they can expand access for patients to transformative therapies. By constructing risk-sharing between payers and manufacturers for these potentially life changing therapies, these models offer an important option to the strictly volume-based, fee-for-service environment.

Advancing Value-Based Payment for Transformative Therapies

 

Legal and Regulatory Issues

Duke-Margolis and members of the consortium have released a white paper providing recommendations for overcoming legal and regulatory barriers to value-based payment for medical products, which can be downloaded.

Overcoming Legal and Regulatory Hurdles to Value-Based Payment Arrangements for Medical Products

Clarifying Medicaid Best Price Regulations In the Context of Value-Based Payment Arrangements

Research Independence and Conflict of Interest

Duke-Margolis Research Team

Mark McClellan

Mark McClellan, MD, PhD

Director of Margolis Center
Robert J. Margolis, MD, Professor of Business, Medicine and Policy
Margolis Executive Core Faculty

MHL

Marianne Hamilton Lopez, PhD, MPA

Senior Research Director, Biomedical Innovation
Adjunct Associate Professor
Senior Team Member
Margolis Core Faculty

Adrian Hernandez

Adrian Hernandez, MD, MHS

Vice Dean and Executive Director of the Duke Clinical Research Institute
Vice Dean for Clinical Research, School of Medicine
Margolis Exective Core Faculty

Arti Rai

Arti K. Rai, JD

Elvin R. Latty Professor of Law
Margolis Core Faculty

silcox

Christina Silcox, PhD

Digital Health Policy Fellow
Adjunct Assistant Professor
Senior Team Member
Margolis Core Faculty

Gillian Schmidler

Gillian Sanders Schmidler, PhD

Deputy Director, Margolis Center
Professor of Population Health Sciences, School of Medicine
Margolis Executive Core Faculty
Anti-Racism and Equity Committee Member

Corinna Sorenson

Corinna Sorenson, PhD

Director of Graduate Education Initiatives and the Margolis Scholars Program
Assistant Professor in Population Health Sciences
Margolis Core Faculty
Anti-Racism and Equity Committee Member

Advisory Group

Alan Balch, Chief Executive Officer, Patient Advocate Foundation

Thomas Barker, Partner and Co-Chair, Healthcare Practice, Foley Hoag

Amy Bassano, Deputy Director of the Center for Medicare and Medicaid Innovation, Centers for Medicare and Medicaid Services

Jonathan Blum, Independent Consultant

Marc Boutin, Chief Executive Officer, National Health Council

Perry Bridger, Vice President, Global Value, Payer Access and Public Policy, Edwards Lifesciences

Chuck Bucklar, Vice President, North America Commercial Operations, BioMarin

Tanisha Carino, Executive Director, FasterCures

Alexandra Clyde, Corporate Vice President of Global Health Policy, Reimbursement and Health Economics, Medtronic

Gregory Daniel, PhD, MPH, Head, U. S. Healthcare Policy, Edwards Lifesciences

David Macarios, Vice President Global Evidence and Value Development, Allergan

Patrick Courneya, Executive Vice President and Chief Medical Officer, Hospitals, Quality and Care Delivery Excellence, Kaiser Permanente

Darin Gordon, President and CEO, Gordon & Associates, LLC

Tim Hunt, Senior Vice President, Corporate Affairs, Editas Medicine

Doug Ingram, Chief Executive Officer, Sarepta

Alex Krikorian, Vice President, Pharmaceutical Strategy and Contracting, Anthem

Leigh Anne Leas, Vice President and US Country Head, Health Policy, Novartis

Nick Leschly, Chief Executive Officer, bluebird bio

Paul Levesque, Global President, Rare Disease Group, Pfizer Innovative Health, Pfizer Inc.

Jeff Marrazzo, Co-Founder and Chief Executive Officer, Spark Therapeutics

Steve Miller, Senior Vice President & Chief Medical Officer, Express Scripts

Bruce Nash, Chief Physician Executive and Senior VP for Health and Medical Management, Blue Cross Blue Shield of Massachusetts

Joshua Ofman, Senior Vice President, Global Value, Access & Policy, Amgen

Jonathan Perlin, President of Clinical Services and Chief Medical Officer, Hospital Corporation of America

Rekha Ramesh, Executive Director, Head of Policy, Gilead Sciences

Jill Ehrlich Robinson,  Senior Director, Advocacy Relations, Verastem Oncology

Lewis Sandy, Executive Vice President, Clinical Advancement, UnitedHealth Group

Michael Sherman, Chief Medical Officer and Senior Vice President, Harvard Pilgrim Health Care

Reka Shinkle, Vice President, Commercial and Portfolio Planning, Regenxbio

Surya Singh, President, Singh Healthcare Advisors

Maria Stewart, Global Vice President, Health Economics and Market Access, Boston Scientific

Susan Winckler, Chief Risk Management Officer, Leavitt Partners/President, Leavitt​ Partners Consulting

Funding

This project is made possible through the generosity of the Margolis Family Foundation, which provides core resources for the Center, as well as a combination of financial and in-kind contributions from consortium members including Allergan, Amgen, BioMarin, bluebird bio, Boston Scientific, Editas Medicine, Edwards Lifesciences, Gilead, Medtronic, Novartis, Pfizer, REGENXBIO, Sarepta, Spark Therapeutics, and Verastem.

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. Duke Margolis adheres to all institutional policies on research independence and conflict of interest.