Pharma backs its products in new contracting deals

August 1, 2009
Mari Edlin
Mari Edlin

Mari Edlin is a frequent contributor to Managed Healthcare Executive. She is based in Sonoma, California.

Outcomes-based contracting enables risk sharing between plans and manufacturers while also allowing better patient adherence to regimens

We're putting money where our mouth is," says Dan Hecht, general manager, North American pharmaceutical business for Cincinnati-based Procter & Gamble. "We are so confident of the clinical efficacy of Actonel that we are willing to stand behind the medication."

Procter & Gamble and sanofi-aventis, which jointly sell the osteoporosis drug, Actonel, have agreed that they will cover the cost of average medical expenses for any non-spinal fractures occurring among Health Alliance Medical Plans members taking Actonel in its new Fracture Protection Program. The deal is among a new breed of contracting between manufacturers and health plans.

The Actonel pilot targets 1,151 women, 35 to 64 years old, who have taken the bisphosphonate Actonel for at least six out of nine months; are either surgically menopausal or of menopausal age; and have osteoporosis. (Anyone with a prior fracture or suffering from a comorbidity putting them at risk for a fracture is not eligible.)

"I have been relentless in pursuing manufacturers who will stand behind their products, prove they are superior and share the risk with us," Barrington says. "It's a win-win for everybody-better outcomes and cost savings for the insurer and its members and more marketshare for the manufacturer. In addition, we can tell our members that Actonel is a superior product and give them peace of mind that if they incur a fracture, the out-of-pocket costs will be covered."

Lisa Yurchak, vice president of marketing for sanofi-aventis, doesn't necessarily anticipate cost savings for Health Alliance, but says the insurer will promote appropriate use and adherence.

"The contract is a good way for us to show how confident we are about Actonel, while improving adherence and patient outcomes," she says.

CIGNA and Merck have an outcomes-based pilot in which the insurer pays reduced prices for Janumet and Januvia-two diabetes drugs-based on how well its members control their blood sugar. The drug company will escalate rebates for the two medications as long as CIGNA members show improvement in adherence and in A1c levels. Individual commercial CIGNA members who have diabetes are eligible for the program even if they use other manufacturers' diabetes drugs.

"These value-based contracts remove barriers and change behavior to match the goals of the organization," says Cyndy Nayer, founder and president of the Center for Health Value Innovation in St. Louis. She says the match between the two companies makes sense, combining CIGNA's disease management expertise and Merck's goal of improving adherence.

It is not a product guarantee, however, according to Patrick Counihan, vice president, healthcare systems for Merck, Whitehouse Station, N.J.

"The discounts are an incentive to align quality care," he says. "It would be naive to just use price when there is the opportunity to work together for appropriate use."

He says Merck is not stepping in to treat diabetes, but instead, to work with plans like CIGNA that already have adherence procedures in place. He says the company wants to find new approaches to demonstrate the value of its products to patients, physicians and payers. The CIGNA opportunity will help those with type 2 diabetes stay on the drugs and achieve their blood sugar goals.