Posted on October 24, 2017

NEHI Urges Prompt Action to Enable Value-based Contracts for Innovative, High Cost Cancer Therapies 

October 24, 2017, WASHINGTON, DC—NEHI (the Network for Excellence in Health Innovation) called today for a series of regulatory steps and other actions to enable new payment arrangements for high cost cancer drugs.  Known as “value-based” or “outcomes-based” contracts, such arrangements tie payments to measurable results in patients, in contrast to prevailing arrangements that tie prices and discounts to the volume of drugs purchased.

At present, relatively few such arrangements exist or have been disclosed publicly, although the U.S. government has apparently reached the outlines of such a deal with the biopharmaceutical company Novartis over its recently approved cell therapy drug, Kymriah. Although value-based contracting itself isn’t a total solution to the challenge of high-cost drugs, NEHI argues that it is an “important arrow in the quiver” as health insurers and other payers confront a growing number of these medications.

In a white paper published today, NEHI synthesized perspectives from a group of experts across multiple sectors: biopharmaceutical companies, health insurers, pharmacy benefit managers, and patient groups. The paper recommends a number of changes to support thoughtful experimentation in value-based contracting, as follows: 

  • Various stakeholders, including the oncology community, payers, and biopharmaceutical manufacturers, should expedite efforts to improve collection of data and should develop patient-reported outcomes measures for cancer care.

  • The U.S. Food and Drug Administration should finalize guidance on the exchange of health care economic information on new, not-yet-approved products. NEHI also recommends that the FDA consider publishing specific guidance to allow communication about off-label uses for cancer drugs, given the likelihood that drugs approved for use in one type of cancer are likely to be used for other cancer indications.

  • The Inspector General of the U.S. Department of Health and Human Services should create new safe harbors to the federal Anti-Kickback Statute to allow for various activities that can support value-based contracting. These activities, such as when biopharmaceutical companies help to ensure that patients adhere to medication, should not be construed as illegal inducements and should be allowed through value-based contracts without threat of legal sanction.  

  • The Centers for Medicare and Medicaid Services should make appropriate exemptions under Government Best Price and related federal health program rules to allow for value-based contracting without triggering other price cuts and unreasonable losses for biopharmaceutical manufacturers. If CMS cannot achieve a regulatory solution, Congress should step in and revise the law accordingly.

  • Congress should direct the National Academy of Medicine to investigate new, long-term approaches to financing high-cost therapies for cancer and other diseases, as value-based contracting by itself will not address that the challenges that high-cost drugs pose for the financial sustainability of health care.

“We are in the midst of a revolution in cancer care in which new, more personalized drugs will help many patients, but at high cost,” said Susan Dentzer, NEHI’s president and chief executive officer.

Pointing to an estimate from QuintilesIMS that more than 600 unique molecules are now in late-phase cancer drug development, she said, “Value-based contracting constitutes one approach that will help to ensure that we as a nation obtain better value for the money that may be expended on these drugs.”

NEHI’s new white paper builds on recommendations made in a March 2017 white paper on operational and policy barriers to value-based contracting in the United States. Read the paper or access other resources on Value-Based Contracting at

During a webinar at 10 AM ET on October 26, NEHI will explore prospects for value-based purchasing in oncology. Dentzer will moderate a discussion with Claire Brunken, Executive Director of Outcomes Projects for Novartis, and Dr. Michael Sherman, Chief Medical Officer and Senior Vice President of Harvard Pilgrim Healthcare.

Register for the webinar at


View more news

NEHI Member Spotlight

See our full member directory

Back to Top