Risk-Based Pharmaceutical Contracting

Harvard Pilgrim Health Care has apparently struck a deal with Amgen for a risk-based contract for Repatha, the new cholesterol-lowering drug.  Amgen provides a discount but also assumes financial risk if the HPHC members who take Repatha do not experience the cholesterol-lowering effects touted in the clinical trials.  It has been observed that this adds a interesting layer of pay for performance to the roll out of this drug. 

HPHC, which moves about 1.2 million lives, is old hat at negotiating discounts on pharmaceutical pricing, known for using the leverage of preferential formulary placement to play competing therapeutically equivalent drugs off of each other.  Repatha and other drugs in the category of PCSK9 are targeted toward  a sub-population of those with high cholesterol but they are spendy.

The real challenge is the prescribing protocol that HPHC will have to implement, reserving Repatha for only those enrollees who meet strict eligibility requirements, most likely including the requirements that step therapy with older cholesterol reducing drugs having failed and the beneficiary's willingness to accept an injectable format.  As intriguing as risk-based pharmaceutical contracting is, it has not been invented by this contract but, rather, has been in use for some time in the U.K. 

Will American-style health care (even tightly managed American-style vertically integrated HMO health care ) be able to constrain use?  That's one risk I am pretty sure Amgen was not willing to bet the farm on, although the contract is reported to contain language accelerating increased rebates to HPHC the larger its enrollee pool using Repatha.

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