Lawmakers Hear the Down Side of Outcomes-Based Pricing

Outcomes-based contracting may not help reduce drug prices, one witness cautioned lawmakers in a House Ways and Means subcommittee hearing on Thursday.

The pharmaceutical industry “has championed outcomes-based contracting, yet such contracts often offer illusory savings,” said Ameet Sarpatwari, assistant director of the Harvard Medical School’s Program on Regulation, Therapeutics and Law.

For example, a manufacturer can promise a refund in the event a patient does not respond to a drug, but “price the drug such that the refund would be largely symbolic” because it is built into the pricing structure. Outcomes-based contracts don’t necessarily mean that the initial list price mirrors the drug’s value, he told members of the Ways and Means health subcommittee.