Exploring value-based contracting in rare diseases

Katie Necas: Before I became a fellow at Cencora, I explored value-based contracting in Medicaid programs. Due to the proprietary nature of these contracts, I noticed a lack of publicly available data and standardized information regarding the contracts and their outcomes. The scarcity of data sparked my interest in conducting exploratory research to understand how value-based contracts are implemented in the rare disease market. Additionally, with the evolution and use of artificial intelligence in multiple industries, I aimed to explore the role of AI in these contracts.

Katie Necas: My research was exploratory, focusing on understanding value-based contracting in rare diseases. A key takeaway is that every payer surveyed has engaged in value-based contract negotiations, with ninety-five percent having at least one active contract and about half of these contracts being renewed. With respect to rare disease products, all payers engage in negotiations and almost all payers executed at least one value-based contract. Another key takeaway is that outcome-based agreements are the most common and impactful type of value-based contracting for controlling costs and improving outcomes in rare diseases. Additionally, there is limited adoption of artificial intelligence in these contracts, despite discussions about its potential use. While AI is not widely adopted, those who use it primarily utilize it for data collection and analysis related to contract outcomes. Most payers prefer to collect and review outcomes data internally, likely due to the smaller population sizes typical in rare diseases.

Katie Necas: I found the data collected during my research insightful given the limited information on the outcomes of value-based contracts. The research found that all surveyed payers have a pending contract for a rare disease product and almost all have at least one executed contract, indicating payer appetite to engage in value-based contracts for rare disease products. Additionally, I discovered that most payers prefer to collect and review outcomes data internally rather than using third-party services. This preference for internal management may be attributed to the smaller population sizes typical in rare diseases and the desire to maintain control over data integrity.

Katie Necas: I plan to present my findings at the AMCP meeting in March and April, with no immediate plans for further research. However, I’m interested in conducting the Managed Care Network (MCN) Forum survey continuously to monitor trends and changes in the market over the coming years.