Joint Risk Agreements: Four Questions and Answers
Laura van der Werf Paintings
In objective 6 of the section “Health for all with quality and efficiency, sustainable by all” of the National Development Plan, it is established that the Ministry of Health “will strengthen policies that help the rational use of medicines and shared risk schemes”. But what are these schemes? what are their characteristics? what are your advantages and disadvantages?
What are joint risk schemes or agreements?
When a health technology obtains authorization to be commercialized, it is determined how the access to this technology will be by patients. Although this process is different according to the characteristics of the health system in each country, through this it is determined whether a technology is going to be part of a benefit plan or not. In Colombia, the benefits covered are determined by the Ministry of Health and are those procedures and technologies included in the Benefits Plan charged to the Capitation Payment Unit (PBSUPC) and those technologies that are not excluded and that, consequently, They can be formulated through the MIPRES application. (Watch: New POS, what was it that changed? and What is the MIPRES and how is its implementation going in the subsidized regime? )
Some time ago, the outcome of this process was thought of as a decision that could only lead to two outcomes: a decision to include the technology in the benefits plan, or a decision not to cover it. However, multiple types of agreements have developed between medical technology manufacturers and medical technology payers around the world. The term is often used joint venture agreement To refer in a general way to any type of agreement between manufacturers and payers, it is nevertheless important to differentiate the different types of existing agreements and their main characteristics (Figure 1).
What types of coverage agreements between payers and manufacturers exist?
Probably the most relevant among the types of agreements between payers and manufacturers is the performance-based risk-sharing agreement (PBRSA). This type of agreement is characterized by comprising a plan by which the performance of the product is tracked in a defined patient population during a specific period of time. From the results measured during this period, which may be clinical or cost-effectiveness outcomes, the payment or reimbursement that the payer will make to the manufacturer is determined (1). Although it is not a unique characteristic of these types of agreements, they are also characterized by making part of the risk taken by the payer due to the uncertainty that exists about the real effectiveness of recently developed technologies to be partially assumed by the manufacturer (1, 2). This characteristic is the reason for the name of joint venture agreements.
Within performance-based risk sharing agreements, there are two subtypes: agreements with evidence development (CED) and agreements to manage the use of technology in clinical practice (1).
Agreements with evidence development are those in which the coverage of the new technology is conditional on the production of new scientific evidence about the technology. In these agreements, the technology may be covered only for patients who are participating in research (Coverage only in research -only in research- OIR), or it can be covered in all patients for whom it is indicated, on the condition that it is develop new evidence to answer the doubts that exist about it (coverage only with research -coverage with research- OWR). (1,2)
The agreements to manage the use of technology in clinical practice are those in which information is obtained on the performance of the technology in each of the patients in terms of a previously established outcome. The payment made to the manufacturer is determined according to the performance of the technology for each patient. Among them are the reimbursement guarantee agreements, in which the manufacturer undertakes to reimburse the money to the payer in the event that the patient does not reach a previously established clinical objective. Also within this subtype are the conditional continuation of treatment agreements, in which it is agreed that the health system will continue to pay for the use of technology only in those patients who have reached a clinical objective. Finally, in this group are also the agreements in which the price of the technology is linked to the outcomes achieved by the patients who receive it (2).
Another form of agreements between medical technology manufacturers and payers is cost-sharing. These agreements are ways of reducing the price for the payer through a negotiation with the manufacturer, but without taking into account in this negotiation the clinical outcomes measured in the patients who receive the technology. Within these types of agreements there are, for example, agreements in which the manufacturer lowers the price of the technology for those patients who are starting treatment, agreements in which the prices per unit decrease when a greater quantity of the technology is purchased, or agreements in which a fixed price is determined for the treatment of each patient, regardless of the amount of treatment that each patient requires (2).
What are your advantages and disadvantages?
For payers, the main advantage of these agreements is to satisfy the demand for technologies that can improve diseases for which the available options are inadequate. This despite the uncertainty about its real effectiveness and in the local context. On the other hand, some of these agreements make it possible to influence the research carried out on the technologies included, making the research better respond to their needs. For patients, as well as for healthcare providers, these agreements allow early access to new technologies and have more treatment options available. Finally, for manufacturers, these agreements allow the adoption of technologies when the evidence that exists to support their use is not yet so clear (3).
Among the disadvantages of joint venture agreements are the risk of investing in technologies that, in the end, turn out to be not cost-effective. The loss related to this investment can also be exacerbated because once a technology has been introduced, and proves not to be cost-effective, there may be a lot of resistance from patients and healthcare providers to stop using the technology. Furthermore, the collection, review and monitoring of information in outcome-based risk sharing agreements is generally not fully covered by the manufacturer, which entails additional costs for the payer. For health service providers, it is possible that using technologies that have not been recommended in clinical practice guidelines expose them to medicolegal risks, while patients expose themselves to the risk of receiving treatments whose damages are more significant than their benefits (3).
What problems have there been with its implementation?
In 2002 in England, NICE concluded that the state should not pay for beta-interferons for multiple sclerosis due to uncertainty regarding the long-term cost-effectiveness of these drugs. Multiple pharmaceutical companies that make multiple sclerosis drugs formulated an agreement in which a study would be conducted following a group of patients for 10 years. In this study, the effectiveness would be monitored by the state, while the manufacturers would decrease their price with the condition of subsequently adjusting the price according to the observed effectiveness. Despite the fact that in the first analysis of the information it was observed that the effectiveness was insufficient to increase the price of the drugs, these were adjusted due to problems regarding the way in which the information had been analyzed and difficulties regarding the measurement of the effects of drugs on disease. In addition, long-term follow-up of patients generated a great administrative burden for the state, in charge of monitoring its effectiveness (4). This case shows some of the problems that can arise for both parties in a joint venture agreement, because if the conditions under which the agreement operates are not clearly established, they can end in unacceptable and unacceptable harmful consequences.
For the Colombian health system, coverage agreements between payers and manufacturers can be a way to allow early access to promising health technologies for patients who need them. These agreements are undoubtedly a mechanism that favors companies that develop health technologies, since they allow them to commercialize technologies earlier, but they are also a mechanism to encourage them to invest in the development of new technologies and in producing appropriate research for the local context. However, these agreements must be clearly stated, taking into account that it should be avoided that they lead to situations that could harm patients, or that produce an excessive increase in health expenses without producing benefits commensurate with them.
- 4 characteristics of a good JV arrangement
1. Garrison LP, Towse A, Briggs A, de Pouvourville G, Grueger J, Mohr PE, et al. Performance-Based Risk-Sharing Arrangements — Good Practices for Design, Implementation, and Evaluation: Report of the ISPOR Good Practices for Performance-Based Risk-Sharing Arrangements Task Force. Value Heal [Internet]. 2013 Jul 1 [cited 2019 Jun 24]; 16 (5): 703–19.
2. Walker S, Sculpher M, Claxton K, Palmer S. Coverage with Evidence Development, Only in Research, Risk Sharing, or Patient Access Scheme? A Framework for Coverage Decisions. Value Heal [Internet]. 2012 May [cited 2019 Jun 24]; 15 (3): 570–9.
3. Hutton J, Trueman P, Henshall C. Coverage with Evidence Development: An examination of conceptual and policy issues. Int J Technol Assess Health Care [Internet]. 2019 [cited 2019 Jun 24]; 23: 425–35.
4. Neumann PJ, Chambers JD, Simon F, Meckley LM. Risk-Sharing Arrangements That Link Payment For Drugs To Health Outcomes Are Proving Hard To Implement. [cited 2019 Jun 24];