risk sharing and managed entry agreements really are something that applies mostly to
breakthrough technology innovations, and can be a make or break in terms of the success
of those innovations.
So the pharmaceutical and biotech industry really has broken ground in this area over
the last decade in negotiating a variety of very innovative agreements with payers and
governments, where the clinical value of the technology in clinical trials was somewhat
understood, but there were often unresolved questions about the economic value of the
technology or about the real world clinical comparative effectiveness of the technology,
such that payers were willing to adopt but unwilling to bear the full financial burden
of the new technology and wanted to go at risk in order to provide incremental reimbursement
or access to the new therapies.
What often has been negotiated is – is additional data collection, real world data collection
that would happen to track the clinical and the financial outcomes, and that there was
a linkage of the payment to the outcomes in the real world practice.
And this could happen at a variety of different levels through essentially negotiated contractual
arrangements, such that if the manufacturer hit particular end points, then it triggered
the payout, either prospectively or retrospectively.
And in other cases, then the payments were dependent on individual patient outcomes.
So that if a patient underwent a trial of a new drug for 30 days and they achieved the
benefit for long term use of the drug, then the payer would be paid at – or the manufacturer
would be paid at list price.
But if the trial was unsuccessful, then the manufacturer would have to refund the costs
of the payment.
So in the medical technology space, what we’re seeing is that that is starting to be experimented
with, as well.
some of the examples in the medical technology space of risk sharing and managed entry agreements
have started with transcatheter valves and ventricular assist devices.
And an example is Medicare coverage with evidence development programs.
So increasingly, CMS in the United States has worked together with national specialty
societies, with the FDA, and with industry to provide national coverage in exchange for
additional data collection that often took form of participation in a national society
sponsored registry.
And as the payer continued to track the outcomes in the real world, then they would look to
see if the outcomes matched the original clinical trials, and if so, then coverage was expanded
and made permanent and relaxed, in terms of the restrictions.
Similarly, there are new technology payment mechanisms, such that if a promising technology
is approved by the FDA, that CMS would provide temporary incremental reimbursement for a
time period based on the initial clinical evidence, and then reevaluated two to three
years downstream, after there was real world experience with the technology at which point
they would decide whether to provide permanent reimbursement at a higher level, or retired
into the existing payment category.
And some examples of where this has been used is with – with the transcatheter mitral
valve device called the Mitraclip device, that was just approved by the FDA.