Performance-Based Risk-Sharing Arrangements: U.S. Payer Experience.

BACKGROUND: As a result of global concern about rising drug costs, many U.S. payers and European agencies such as the National Health Service have partnered with pharmaceutical companies in performance-based risk-sharing arrangements (PBRSAs) by which manufacturers share financial risk with health care purchasing entities and authorities. However, PBRSAs present many administrative and legal challenges that have minimized successful contract experiences in the United States. OBJECTIVE: To (a) identify drug and disease characteristics and contract components that contribute to successful PBRSA experiences and the primary barriers to PBRSA execution and (b) explore solutions to facilitate contract negotiation and execution. METHODS: A 37-item, web-based survey instrument (Qualtrics), approximately 20 minutes in duration, was open during July and August 2016. The survey was emailed to 90 pharmacy and medical directors of various health care organizations. Statistical analysis included the Kruskal-Wallis test and chi-square tests to examine differences among payer responses. Survey responses were anonymized and data were aggregated. RESULTS: Twenty-seven individuals completed the survey (30% completion rate). The majority of respondents worked for regional health plans (52%, n = 14), covering at least 1 million lives (63%, n = 17), with at least 7 years of managed care experience (81%, n = 22). A total of 51 PBRSAs were active among respondents at the time of the survey. Easily obtainable and evaluable drug data and medical data were the most important drug and disease attributes for successful PBRSAs, respectively. Pharmacy claims and patient demographic data were assessed as "very easy and inexpensive" to collect. Type and amount of manufacturer payment for drug outcome performance failure, endpoint measurement, and necessary clinical data for drug performance measurement were all critical factors for successful PBRSAs. Standardized contract templates and transparent contract financial risk evaluation and modeling ranked highest among methods of manufacturer facilitation of PBRSAs. This study was limited by sample size and survey questions were limited to explanation of PBRSAs at the disease state level. CONCLUSIONS: On the basis of PBRSA experiences, respondents noted that drug use in chronic medical conditions and objective drug outcome performance measurements were favorable drug characteristics and serve as the primary source of satisfaction for these types of contracts. Third parties and manufacturers can facilitate the uptake and success of PBRSAs by developing standardized contracting templates in addition to other methods that increase their stake in the arrangement. Looking forward, mounting perceptions of success in this realm of contracting for pharmaceuticals may contribute in the quest for value-based payments in the U.S. health care system. DISCLOSURES: The construction of the survey and payment for survey respondents were supported by Charles River Associates. Parece is an employee of Charles River Associates. Goble and Ung are completing fellowship training sponsored by Novartis and Celgene, respectively, but do not have any conflicts of interest and did not receive any funding related to this study. Navarro reports consulting fees from Analysis Group, TEVA, and Amgen, unrelated to this study. Van Boemmel-Wegmann declares no conflict of interest. Study concept and design were contributed by Navarro, Goble, Ung, and Parece. Navarro took the lead in data collection, along with Goble and Ung, and data interpretation was performed by van Boemmel-Wegmann, Goble, and Ung. The manuscript was written by Goble, Ung, Navarro, and van Boemmel-Wegmann and revised by all of the authors.

Authorized generic drugs, price competition, and consumers' welfare.

The growing frequency of authorized generics has important implications for the welfare of prescription drug consumers. Authorized generic entry could affect the timing of generic entry, brand-name and generic prices, and generic penetration. We reviewed 1999-2003 data and found that generic entry in the absence of short-run exclusivity restrictions benefits consumers through lower short-run prices. We suggest that these benefits likely also result from authorized generics. We posit that long-run prices and shares are likely essentially unaffected by authorized generics and that potential costs to consumers from any delayed generic entry are likely small.

A retrospective claims database analysis to assess patterns of interstitial cystitis diagnosis.

OBJECTIVE: Interstitial cystitis (IC) is often misdiagnosed as one of several other conditions manifesting similar symptoms. This analysis assesses the potential extent of IC misdiagnosis while considering concomitant conditions in a managed care population and identifies predictors of IC diagnosis. RESEARCH DESIGN AND METHODS: Administrative insurance claims data covering 1.7 million lives (1999-2003) were analyzed. Insurance enrollees with >or= 1 IC diagnosis (ICD-9-CM of 595.1x) were identified as IC patients. A random sample of non-IC controls was selected using a 10:1 matching ratio. Six-month incidence rates of 'commonly misdiagnosed conditions', (overactive bladder, urinary tract infection, chronic pelvic pain, endometriosis, prostatitis) were compared before and after patients' initial IC diagnosis and the reduction in incidence rate of commonly misdiagnosed conditions was used as a suggestive measure of the extent of IC misdiagnosis. The Kaplan-Meier method was used to assess the extent that commonly misdiagnosed conditions were predictors of subsequent IC. A Cox Proportional Hazards regression model (that adjusts for patient demographics, concomitant and misdiagnosed conditions) was used to estimate the hazard ratio (HR) of these conditions. Similar analyses were performed for the 'commonly concomitant conditions' (fibromyalgia, irritable bowel syndrome, vulvodynia). RESULTS: There were 992 IC patients and 9920 controls identified. The reduced incidence of commonly misdiagnosed conditions after initial IC diagnosis suggests that the misdiagnosis rate could be as high as 38% within the 6-month period before initial IC diagnosis. CONCLUSIONS: Diagnoses of commonly misdiagnosed conditions are significant predictors of future IC diagnosis. When overlooked, potential misdiagnosis of IC can lead to underestimation of the true prevalence of IC. Similarly, diagnoses of commonly concomitant conditions are significant predictors of future IC diagnosis. These initial findings based on claims data suggest hypotheses for further investigation with clinical data. These results suggest more consideration of IC as a diagnosis is warranted, especially when certain diagnoses are repeatedly made and the resulting treatments do not alleviate the patient's symptoms.

Interstitial Cystitis: Cost, treatment and co-morbidities in an employed population.

INTRODUCTION: Recent literature indicates that interstitial cystitis (IC) may affect 20% of women and a smaller proportion of men, although many individuals with IC may be misdiagnosed or remain undiagnosed. Factors that can contribute to the cost of IC include medical and drug utilisation related to treatment and diagnosis of IC and associated conditions (e.g. depression), as well as employee work loss. This study assesses the direct medical cost and indirect cost of work loss for IC patients in the first year after diagnosis, and evaluates IC treatment patterns and prevalence of co-morbidities. METHODS: Data for patients under the age of 65 years with at least one diagnosis of IC (n = 749) were drawn from a de-identified, administrative database of approximately 2 million beneficiaries that included medical, drug and disability claims for 1999-2002. A 2 : 1 matched control sample of patients without an IC diagnosis (non-IC sample) was randomly selected based on patient characteristics. Indirect costs were calculated from a subgroup of 152 IC patients (plus their matched controls) who had disability information available. Costs incurred in the first year after IC diagnosis and co-morbidities were compared between IC patients and the non-IC sample, with the difference in costs defined as 'excess costs' of IC patients. Treatment patterns were profiled in the 2 months following initial diagnosis of IC. Descriptive statistics are presented. A multivariate two-part model was applied to estimate the IC direct medical cost, indirect cost and total cost to adjust for observed patient demographics and co-morbidities. Statistical significance was evaluated by the bootstrap method. RESULTS: The average IC patient had 130% higher direct costs (p < 0.05) and the average IC employee patient had 84% higher indirect costs than the average non-IC control individual. IC patients also had a higher diagnostic prevalence of prostatitis (relative risk [RR] = 40.0), endometriosis (RR = 7.4), vulvodynia (RR = 6.9), chronic pelvic pain (RR = 5.8) and urinary tract infections (RR = 5.1) [all p < 0.05]. IC patients were also more likely to report depression (RR = 2.8) and anxiety (RR = 4.5 ) than non-IC controls (all p < 0.05). Seventeen percent of IC patients received pentosan polysulfate therapy, the only US FDA-approved oral drug therapy indicated for treating IC, within the first 2 months after diagnosis. Of these patients, 69% received at least one 'other' drug from the non-approved oral medications studied. Approximately one-third of IC patients received only 'other' drug therapies, and almost half of IC patients received no drug treatment within the first 2 months after the initial diagnosis. CONCLUSIONS: IC is a costly disease associated with co-morbidities. Following diagnosis, patients with IC are commonly untreated or treated with non-approved drug therapies. It is possible that more accurate diagnosis and earlier and more appropriate treatment of IC would lead to better management (or even prevention) of co-morbidities and reduce healthcare costs, and this should be investigated in future studies.