Barriers to Value-Based Contracting in Oncology

December 2019, Vol 10, No 6
From left: Roger Longman; Gerry Gleeson; Ira Klein; Scott Jauch; Joe Vandigo; John DoyleFrom left: Roger Longman; Gerry Gleeson; Ira Klein; Scott Jauch; Joe Vandigo; John Doyle

New York, NY—With drug-pricing legislations currently before the House and the Senate, the issue of demonstrating value in high-cost drug therapies has become the front and center of the healthcare conversation. Moderator Roger Longman, MA, Co-Founder and Chairman, Real Endpoints LLC, a reimbursement-focused analytics and advisory firm, engaged an expert panel on the topic of value-based agreements during the 2019 AVBCC Summit.

“We’ve rarely seen any value-based agreements in oncology,” Mr Longman said, citing payers’ lack of control in oncology drug pricing as one reason for this. In addition, he said, oncologists are in the unique position of receiving incentives for prescribing expensive drugs and are dependent on the buy-and-bill system of physician-administered medicines.


John Doyle, MPH, DrPH, Vice President, Global Healthcare Innovation Lead, Pfizer, said that it comes down to a lack of real-world data on the performance of cancer drugs in the real world.

“When is the last time you measured progress with a code in oncology?” Dr Doyle asked, noting that utilization management is not common in oncology.

Ira Klein, MD, MBA, FACP, Senior Director, Healthcare Quality Strategy, Strategic Customer Group, Johnson & Johnson Health Care Systems, agreed, saying that outcomes measures and utilization management are lacking with regard to cancer drugs. Dr Klein pointed out, however, that it would be challenging to add these measures to the already heavy load that oncologists bear.

“It’s [oncology] not the ideal environment to launch a value-based agreement,” Dr Klein said.

Part of the reason for this is that the pace of change in oncology is so rapid, suggested Scott Jauch, MS, Senior Director of Market Access, AstraZeneca.

“In some ways, we’re a victim of our own success,” Mr Jauch said, adding that the various stakeholders in healthcare would be more amenable to risk-sharing agreements if they had a better idea of how a drug would perform. “As a group, we have to figure out how we make those data points easily accessible.”

The very nature of oncology is in some ways antithetical to value-based contracting, said Gerry Gleeson, MBA, Vice President & US Head of Market Access, Sanofi. Drugs that are approved based on biomarkers instead of clinical end points do not lend themselves to outcomes-based payment, he pointed out. In addition, the complexity of cancer and its ability to become resistant to a given treatment make it difficult to strike an equitable balance when it comes to risk-sharing agreements. Off-label prescribing poses another obstacle to value-based agreements in oncology.

Still, Dr Doyle said that he saw a positive trend toward stakeholder collaboration to devise value-based agreements that apply to oncology. Mr Gleeson agreed.

“I ultimately think we will get there,” Mr Gleeson said. “It does come down to being able to get those [real-world] data.”

Think of the Patient

An oncology nurse in attendance told the panel that it was not enough to say it is difficult to make value-based agreements happen in oncology. “Patients are taking a chance every time they take one of these drugs. They’re filing for bankruptcy to take these drugs and hoping they’re going to work,” she said. “We need you to really dig in and make this happen. You guys have the power to do it.”

Mr Gleeson acknowledged her point, saying that in the end, it is all about the patients.

“There is tremendous innovation out in the marketplace, and we have to do whatever we can to make sure that innovation makes its way to the patient,” Mr Gleeson emphasized.

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