Harvard Pilgrim Health Care has reached a deal with Novartis and Eli Lilly to secure discounts on two congestive heart failure and diabetes drugs based on patient outcomes.
Wellesley, Mass.-based Harvard Pilgrim will receive discounts on Novartis' congestive heart failure drug Entresto if the drug doesn't reach an agreed-upon reduction in hospitalizations. Under the Lilly agreement, Harvard Pilgrim has made the drugmaker's type 2 diabetes drug Trulicity a preferred drug in exchange for a discount if the drug performs better than competing drugs.
“Harvard Pilgrim is excited about its ability to show leadership in creating innovative contracts that pay not for pills but for patient outcomes,” said Harvard Pilgrim's Chief Medical Officer Michael Sherman. “We believe that working with pharmaceutical companies that are willing to engage in these kinds of innovative, outcomes-based contracts will bring value to the members we serve.”
The insurer and drugmakers did not reveal the extent of the discounts on Entresto and Trulicity, but Lilly spokesman Greg Kueterman said the deal has upsides for patients, the insurer and the drugmaker alike.
“We view an agreement like this one with Harvard Pilgrim as a win-win-win situation,” Kueterman said. “Hopefully patients will be getting treatment that benefits them in the most optimal way. The payer will have members who are getting better treatments, and Lilly has contract terms that are better than they otherwise would be.”
Trulicity normally costs $574.80 for a 28-day regimen, according to Lilly. Novartis has priced Entresto at $12.50 per day.
Harvard Pilgrim is one of the largest not-for-profit health insurers in New England and has developed similar arrangements with other drugmakers in the past. In November 2015, the insurer entered a risk-based contract with Amgen for the cholesterol-lowering drug Repatha. In January 2015, it negotiated a discount on Gilead Sciences' hepatitis C drug Harvoni in exchange for a preferred drug distinction.
“Our goal is to bring value to our members by finding creative and effective ways of negotiating contracts based on actual patient outcomes,” Sherman said. “Executing these types of agreements can make it easier for payers to provide access to newer therapies since they tie payment for the drugs to meaningful endpoints.”