The rising cost of specialty pharmaceuticals has motivated payers to implement tighter restrictions and seek both traditional and value-based contracts. As manufacturers are already contracting with GPOs, distribution networks and medical practices, most would prefer to avoid contracting with payers and PBMs for their medical benefit products.
Yet the data reveals that medical benefit contracting is currently robust across therapeutic areas, and is expected to grow. To better understand medical benefit trends, MMIT’s Index service surveyed payers from large national MCOs, regional MCOs, and PBMs encompassing 75% of commercial lives. In the following takeaways, all payer percentages are weighted to indicate the percentage of commercial lives covered.
- Increased contracting across all categories: At the close of 2022, payers representing 51% of commercial lives reported contracting is in place for at least some medical benefit products, while payers representing 28% of lives said that most of their medical benefit products have contracting. By the close of 2023, 19% of payers anticipate that all medical benefit products used to treat autoimmune, respiratory, and ophthalmic disorders, as well as rare diseases, will be under contract.
- Steady rise in value-based agreements: As payers become more capable of processing multiple metrics, there will be a growing demand for outcomes-based agreements for high-cost therapies. MMIT data indicates that the use of value-based agreements (VBA) across medical benefit categories is steadily increasing. Most payers (56%) report sometimes using VBA contracts for medical benefit products, and 28% of payers use them frequently.
- Variable site-of-care enforcement: Although the overwhelming majority (79%) of payers mandate the use of preferred sites of care (SOC) across all medical benefit categories, 85% of these payers sometimes cover treatment at a non-preferred site. These exceptions vary significantly by category, with oncology and rare diseases as outliers; a respective 73% and 70% of payers will sometimes cover treatment at a non-preferred SOC for these conditions.
Nationally, the PBM consolidation trend is likely to drive increased medical benefit contracting as PBMs merge with large national payers and assume purchasing and distribution responsibilities. Manufacturers must evaluate their current market access and reimbursement strategies to determine if contracting could protect their existing coverage or potentially improve their products’ positioning.