More companies are investing in showing actual drug effectiveness so that patients can see the real value of the product. As the trend shifts from volume to value, these value-based contracts (VBC) provide a way to demonstrate the value your product brings to patients by tying access to outcomes. Although pricing and contracts come together eventually, these contracts are not the same as value-based pricing, which is an alignment of the product’s price to its efficacy. 

Watch how McKesson increases quality control of data required for error rate reduction

These types of contracts require trust, collaboration and ability to work through new pricing models. The goal is that by paying for only what works, payers can lower total costs and move those resources to funding future ground-breaking therapies.

Why are there so few of these contracts?
Not one element leading to the signature line is easy to negotiate in value or outcome-based contract where the deals are complicated, and the infrastructure requirements are extensive and rely heavily on trust. How do you track, develop transparency and gain that trust if your infrastructure consists of manual methodologies?