Bennet, Bipartisan Group Push for Outcome-Based Arrangements with Drug Manufacturers

Paying drug manufacturers for patient outcomes could help lower the costs of prescription drugs

Washington, D.C. - U.S. Senators Michael Bennet (D-CO), Mark Warner (D-VA), Bill Cassidy (R-LA), and Todd Young (R-IN) urged the Government Accountability Office (GAO) to look into private sector innovations related to outcome-based arrangements with drug manufacturers to determine how to help lower prescription drug costs for patients, providers, and payers. Over the past decade, the health care sector has begun shifting away from payments for the volume of services and moving towards payments based on value. More data can help lawmakers determine if this is a principle that can be applied more broadly to better contain prescription drug costs.

"In recent years, numerous private payers have moved towards outcomes-based arrangements with drug manufacturers, but to date federal policymakers have lacked the tools, resources, and information required to understand how such arrangements might be translated into Medicare and other programs," wrote the Senators in a bipartisan letter to GAO Comptroller General Gene Dodaro.

Outcome-based arrangements are risk-sharing agreements made between product manufacturers and payers that link the payment for a drug to patient outcomes, such as clinical measure (e.g., laboratory value) or an event (e.g., hospital readmission). Though some product manufacturers and commercial payers have implemented these arrangements in the United States and internationally, the results have been mixed and savings are not definite so more research is needed in this area to determine if this policy would be a viable tool to reduce costs and improve outcomes.

"As our country focuses on advancing a health care system that delivers better care and lowers cost for all Americans, pharmaceuticals should be held to a similar standard of demonstrating real, measurable outcomes to stakeholders," added the Senators.

The full letter text is below and can be found HERE.