The emergence of expensive hepatitis C drugs with a high cure rate has led to a rash of formulary exclusions by U.S. healthcare payers, forcing the first significant price wars in the specialty drug space. But now, pharmacy benefit managers and health plans appear to be turning their attention to contracts that put drug companies on the hook for reimbursing payers if those high-priced drugs do not live up to their promised results.

In fact, one senior official of a national PBM told attendees at the recent Managed Markets Summit that the PBM would rather not exclude a drug from coverage ever again, preferring instead to pursue outcomes-based or other contracting terms that would bring payers some form of predictability in their drug costs.

Innovation in pharmaceutical contracting as a way to inject predictability into management of the rising drug spend was a persistent theme at the conference in New Orleans March 4-6, sponsored by Decision Resources Group. The forum gave health plan executives a chance to air their concerns about expected financial pressures they will face from expensive new drug therapies currently in the pipeline, and to ask for pharma's assistance in helping them plan for these eventualities.

The MMS conference comes at a time when health insurance exchange plans, as well as Medicare Advantage plans, have gone through open enrollment and will be setting premiums for 2016. Exchange plans face uncertainty about whether the government will deliver on the Affordable Care Act's promises of two important risk-protection programs (risk corridors and reinsurance) for payers in the exchanges. It's a good time, some speakers said, to approach payers.

Many from the payer side said they are open to working with pharma and hearing ideas particularly strategies that will help them better plan for therapies that represent significant budget challenges. Health plan officials don't want to be surprised, as they were with the convergence of high demand for Sovaldi and its $84,000 price tag for a course of treatment.

PBMs and health plans with large market clout have been able to extract large discounts from Gilead Sciences for its Sovaldi and Harvoni drugs, and from AbbVie for its Viekira Pak therapy, by signing exclusive drug deals. Because of the large savings, it's safe to assume that payers will apply their formulary strategy to other drug categories presenting a significant future expense. Some of the categories representing hot topics of conversation during the conference were oncology and dyslipidemia, which is seeing the emergence of high-priced injectable humanized monoclonal antibodies known as PCSK9 inhibitors.

The Sovaldi experience has health plans looking for pharma's help, not only by reducing prices but by keeping payers informed before drugs hit the market. They want to know how many of their members will be affected, the ins and outs of the disease states, the likely price at launch, and any downstream medical savings that will result from and offset the cost of therapy.

Increasingly, payers are asking for data that go beyond the typical clinical trial. Manufacturer support is needed with health-outcomes research, comparative effectiveness data on drugs in the real-world setting, and head-to-head clinical trials that have an active control instead of a placebo.

On several occasions throughout the conference, representatives from health plans, PBMs, and consulting firms hyped the importance of outcomes-based contracts and other agreements that take some of the financial risk off payers by guaranteeing that a drug will work in the real world.

One national PBM has embedded an outcome guarantee in its preferred drug contract with a hep C drug manufacturer that calls for patients to fill the drug through the PBM's specialty pharmacy and for the PBM to monitor and document the patient's adherence. If the patient completes a full course of treatment and the drug fails, the PBM is reimbursed by the drug company.

Another PBM official said that multiple sclerosis is a good example of a disease ripe for outcomes-based contracting, given the availability of several expensive therapies. The concept is to tie the contract to the patient's compliance with the drug regimen for a specific time period. After that, if the patient relapses and ends up in the hospital, the drug marketer would be responsible for the costs of the treatment, such as the hospital visit.

The message to pharma was clear: Put your money where your mouth is when touting the claims of expensive wonder drugs.

Follow Chris Lewis on Twitter @ChrisLewisDRG

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