I've always found it hard to write about the push for "value-based" payments — not because the idea isn't important, but because it's so abstract and dry as dust. But here's the general idea: Drug companies would be paid for their drugs based on how well they work on specific diseases and patients. So if, for example, there's a drug that works really well on lung cancer but not on other kinds, the insurer would pay more when it's used for lung cancer.
Why we're talking about it: The Pharmaceutical Research and Manufacturers of America, the main drug industry trade group, wants to move to those kinds of payments and is pushing for legislative and regulatory changes to make them more common. The group held a "Value Collaborative" panel discussion yesterday to promote the idea, and its leaders are more optimistic about getting help from the Trump administration and Congress after their meeting with President Trump, as I wrote yesterday.
Yes, but: If the idea is to pay more for the drugs that work the best, does that mean the patients would pay more, too? Actually, PhRMA president and CEO Steven Ubl told a group of reporters that the patient would probably pay less — because the drug would get a "preferred formulary" status, meaning the insurer would give them lower copayments to steer them toward that drug. "In all likelihood they'll have lower out of pocket costs … because it will be in the payer's interest to ensure that patients get those treatments," Ubl said.