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T-33: Assessing the Implementation of Value-Based Payments for Oncology Treatment Within the Existing Care Structure

Poster Presenter

      Monika Schneider

      • Director, Global Antimicrobial Resistance Policy
      • Shionogi Inc.
        United States


Identify steps to enhance the success of value-based payment (VBP) models for cancer care, with an emphasis on payments to drug manufacturers that better align with provider alternative payment approaches, aiming to improve outcomes and avoid inefficient and low-value spending for cancer patients.


Reviewed publicly available literature and news sources on value-based or alternative payment pilots or models implemented for oncology in the US to date, identified common themes and challenges, and assessed experiences and perspectives from key stakeholders in the field through a private workshop.


The types of value-based oncology payment and reimbursement models that are currently being tested in the US are diverse. Our study assessed both provider and drug-specific payment models, finding that stakeholders combine different approaches when designing programs. These programs include different stakeholder arrangements, with most including a health plan payer and provider or manufacturer. Most of these models were focused on care delivery, with agreements between providers and payers that included implementation of clinical care pathways, patient-centered medical homes, accountable care organizations, alternative payment models, and physician-developed, value-based care models. There were fewer agreements between drug manufacturers and payers, which included outcomes-based and indication-based pricing. To understand the challenges associated with these models, and how drug payment and care might be better integrated, we identified key barriers to implementation for the manufacturing, provider, and payer fields. The first includes legal and regulatory issues. According to the available literature and discussions with manufacturers, Medicaid Best Price, which limits rebate amounts that can be provided to payers, and the anti-kickback statute, which limits the provider’s ability to receive rebates for ineffective treatment, are barriers to effective negotiation of VBP contracts. The second category is scalability; it is often difficult to build upon small pilot contracts for broader use. The amount of time and effort that goes into developing VBP contracts is extensive. Without a way to scale or standardize these efforts, the value of drug payment reform does not outweigh the administrative burden of implementation. The third category is operational and infrastructure challenges, primarily focused around the resources needed for data collection and sharing.


Our analysis indicated that the majority of value-based and alternative payment model contracts were developed on the provider/delivery side of care, and many of these programs are well established. One caveat to our analysis is that many organizations do not publicize the type of VBP contracts that they establish with one another for drug payments. If contracts are announced, there are often few details, and results (success or no success) are rarely published. A key take away was that while payers and manufacturers have directly negotiated drug contracts, there is a need to incorporate providers into these VBP arrangements to allow for more equal distribution of benefit and risk. In order to optimally integrate oncology drugs into VBP models, stakeholders must begin to define the approaches and evidence that could be used to support these new arrangements. While clinicians are being held more accountable for the performance of their patients, in many cases, the drug manufacturer is not. VBP arrangements represent an opportunity to shift some of the risk from clinicians to manufacturers. Important next steps will include determining how to make arrangements more scalable, securing the commitment of all stakeholders to work together, and developing meaningful quality and outcome measures that can be broadly applied to determine the effectiveness of treatment and care.