Navigating Outcomes-Based Deals: Better Disease Management Starts With Better Measurement

Navigating Outcomes-Based Deals: Better Disease Management Starts With Better Measurement

Healthcare is at an inflection point. In the United States, value-based models continue to grow, with value-based contracts expected to account for 22% of insured lives by 2025 – up 7% from current figures.1 At the same time, rising healthcare costs and changing government incentives are contributing to shifts in provider and payer demand.

So, what does all of this mean for pharmaceutical and life sciences companies? 

Up to this point, the pharmaceutical industry has largely been able to sell their commercial products to buyers at flat, per-unit prices they’ve negotiated themselves. This is a markedly different model than payers and providers encounter in value-based contracts, and as the industry shifts more toward value-based pricing, payers are beginning to demand that pharmaceutical and life sciences companies mirror outcomes-based pricing models. 

In the respiratory space, AstraZeneca executed more than 35 outcomes-based agreements for its asthma and COPD inhaler medication, Symbicort. These agreements came just after AstraZeneca faced significant declines in Symbicort sales due to challenging market conditions. Considering the sustained market challenges and healthcare’s steady trajectory toward value-based care, other large pharmaceutical companies will likely follow suit. 

Outcomes-based deals between pharmaceutical companies and payers make sense in an industry increasingly focused on providing measurable improvements in patients’ health. How pharmaceutical companies prove these outcomes is critical, given the variety of factors that impact patient health in the real world, including how and if a patient is taking their medication as prescribed. If outcomes-based deals are based on efficacy as measured in clinical trials – a carefully-managed snapshot of time where enrolled patient behavior doesn’t always mimic real-world habits – pharmaceutical companies will have to do what they can to ensure patients are at least following prescribing information for their medication. 

Commercially-available digital health integrations like connected devices or integrated sensors can passively collect the objective data pharmaceutical companies need if they are to provide a truly complete picture of real-world outcomes, including medication usage trends. And when combined with a complete digital health platform, such as a mobile app and virtual coaching, the impact of connected drug delivery devices on patient outcomes becomes even greater, increasing the odds of driving higher patient engagement and motivating sustainable patient behavior change. 

Outcomes-based contracts between pharmaceutical companies, payers, and providers will only increase, and value-based care will become the primary payment model. As for pharmaceutical companies, the time to integrate digital solutions into their pipelines is now.

Discover how Propeller can help your organization integrate connected drug delivery. Email partnerships@propellerhealth.com

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1 McKinsey & Company, “The next frontier of care delivery in healthcare” (2022)