Managed entry agreements (MEAs) are arrangements made between manufacturers and payers which are being implemented for innovative treatments as a means of reducing payer uncertainty and as a potential solution to address payer’s restricted healthcare budgets. MEAS (also known as risk-sharing schemes) can broadly be categorised as finance-based or outcomes-based.
Finance-based arrangements aim to address payer concerns on budget impact through reducing the net price of a product. These arrangements can include:
- Drug-utilization caps
- Budget-caps
- Fixed-costs per patient
- Price-volume agreements
- Patient access schemes involving confidential discounts (frequently implemented by NICE and the SMC in England and Scotland, respectively).
Outcomes-based arrangements aim to address payer concerns on the clinical value of a product. These can be particularly beneficial for products which have been through accelerated regulatory pathways. In these cases, Phase II data may have been enough to gain regulatory approval but is associated with high payer uncertainty and questions over the potential price. Outcomes-based MEAs can include:
- Result-based agreements, which can involve reimbursement being dependent on pre-specified treatment outcomes
- Conditional treatment continuations, whereby treatment is stopped after a specified period of time if outcomes have not been met
- Coverage with evidence development agreements (i.e. agreements to collect further data for a specified time after which a final reimbursement decision could be made).
Both finance-based and outcomes-based MEAs can help to reduce payer uncertainty, aid patient access and form an important part of pricing and market access launch strategy. Finance-based agreements are generally easier to implement, are less complex and are implemented more widely. Outcomes-based arrangements are less common and typically have greater complexity due to data collection or administrative issues. The Cancer Drugs Fund in England is a recent example where a government has proactively provided funding whilst additional evidence is being developed. When implementing MEAs as part of their pharmaceutical pricing and reimbursement strategy, manufacturers must ensure the type of MEA is appropriate for the product and competitive environment. In addition, it is important to ensure that the appropriate national or regional healthcare infrastructure is in place to support implementation of a MEA. More information on MEAs and how they can be incorporated into pharma product launch strategy can be found in our newsletter article here.