AstraZeneca is no stranger to value-based pricing agreements, even for heart drug Brilinta, but its latest is different.
The company has struck a deal with UPMC Health Plan that links reimbursement for the blood thinner, which is approved to cut the risk of death or a second heart attack in people who have already had one, to patients’ cardiovascular outcomes—the usual trade-off for a value-based deal.
But the deal, which applies to the payer's Medicare plan, does a couple of other things, too. First, it slashes out-of-pocket costs for UPMC’s members by serving up Brilinta at generic-like prices that “could save a member hundreds of dollars over a year,” said the insurer, which is affiliated with the University of Pittsburgh Medical Center.
“We believe today this has not been done in the U.S. market,” Rick Suarez, AstraZeneca's SVP of U.S. market access, said in an interview, adding that patients would pay between $7 and $10 for a 30-day supply.
Second, the agreement includes what the partners call “two-sided financial risk.” UPMC will pay more or less for Brilinta based on the value the drug brings to its health plan; if a patient’s outcome is better, its discount will be lower, and if the value is less than expected, it’ll be higher.
“By having shared accountability, both the insurer and the pharmaceutical company come together to deliver on the promise of the medicine,” Suarez said.
While that kind of dual risk has been part of other value-based arrangements across the industry, “we have never seen one to date that tackles patients’ out-of-pocket costs in Medicare,” Suarez said. AstraZeneca believes the arrangement is “groundbreaking” because it’s “bringing both of those pieces together.”
It’s not the first value-based agreement that the British drugmaker has struck for Brilinta, which recorded $945 million in sales through the first nine months of 2018. The company also boasts outcomes-based agreements with Harvard Pilgrim for both Brilinta and fellow cardiometabolic drug Bydureon, which treats diabetes. Under those pacts, Harvard Pilgrim will pay less if the drugs fall short of established outcomes benchmarks.
Outcomes-based accords have proliferated in recent years as payers look for ways to curb soaring drug prices—and pharma companies look for ways to show the public that they’re doing something about the issue. Particularly, industry players that develop drugs have sought to distance themselves from those that have snapped up products through M&A and subsequently jacked up costs—the so-called bad actors that they blame for casting pharma in a negative light.
Right now, there’s a hyperfocus on cost, Suarez said. But “we believe it’s time for a hyperfocus on value.”