EMD Serono enters into a pay-for-performance contract for multiple-sclerosis drug

More common in Europe than the US, a pay-for-performance contract is a essentially a bet by a pharma company that it can beneficially improve patient outcomes, relative to competing products, and is willing to either be more richly rewarded if it is correct, or penalized if it is not. Traditionally, pharmacy benefit managers (PBMs) simply want to get the best deal possible on drug price, which can generate heavy discounting that goes up as volume rises; but with Prime Therapeutics (St. Paul, MN), the PBM that offered its “CareCentered Contract” to EMD, Prime wants to see lower overall healthcare costs for its plan members.

Under the terms of the deal, EMD Serono will pay rebates to Prime on the utilization of Rebif (interferon beta-1a) if patients who are on the drug have a higher overall total cost to their plans than patients on a different MS drug, or if the medication adherence rate remains above a certain level. Prime, a captive PBM owned by Blue Cross/Blue Shield plans in a variety of states, will monitor health outcomes and adherence rates to determine total cost of care, including medical and pharmacy costs. “Our innovative contract with Prime will bring greater focus to patient adherence, which we expect will help keep hospitalization and emergency visits to a minimum and maximize cost effectiveness,” said Mike Dezelan, SVP of managed markets at EMD Serono, in a press release.

Peter Wickersham, who has the actual job title, “SVP of cost of care” at Prime, says that this is not the first CareCentered Contract (a Prime trademark) that Prime has entered into, but it is the first with a health outcomes component. “What we’re trying to do is align the interests of all of the stakeholders involved here—the manufacturer, the PBM and the plan—to better outcomes and lower total cost of care.” He says that conventional rebate contracts, with rebates rising as consumption goes up, don’t necessarily result in lower overall healthcare costs. Making all this work implies very close coordination among the stakeholders, which is probably benefitted by Prime’s close relationship with its plan clients. With more, and more comprehensive, electronic health-record systems coming into healthcare, more of these might be possible in the future.