It’s no secret that pharmaceutical drug prices continue to soar, however recent news reports have revealed that some of the major health insurance companies are choosing to pay drug makers per negotiated contracts based on patients’ outcomes, as value-based care becomes more prominent in the pharmaceutical industry.

Some of the major players using the value-based model include Cigna, Aetna, Blue Cross and Blue Shield, Anthem, and UnitedHealth Group. According to reports, approximately a third of health plans are negotiating at least one outcome-based contract with pharmaceutical manufacturers, while a quarter of health plans presently have at least one outcome-based contract with a drug maker. Essentially, whether the health plan decides to pay for a drug is determined by the health outcome for the patient.

David Cordani, CEO at Cigna, told analysts that over the past two years his company has created seven arrangements or contracts that base reimbursement not solely on the volume or consumption of the drug, but its efficacy. Doctors, hospitals, and even a growing number of drug makers are being reimbursed according to the value-based model, based on the quality of care provided to the patient instead of volume of care, regardless of the patient’s outcome.

Pharmaceutical company Merck partnered with Aetna last fall on a deal with the drug maker’s diabetes drugs, and also announced a partnership with UnitedHealth Group’s Optum health service unit in late May.

How will this new value-based model among a growing number of health insurance companies impact pharmaceutical drug prices? Only time will tell.

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