Optum and Merck Collaborate to Advance Value-Based Contracting of Pharmaceuticals

May 25, 2017
  • Companies will use real world data to develop and simulate models linking payment for prescription medicines to patient health outcomes

Optum, the health services business of UnitedHealth Group (NYSE: UNH), and Merck (NYSE: MRK, known as MSD outside the U.S. and Canada), will collaborate to develop and simulate the performance of contractual reimbursement models in which payment for prescription drugs is aligned more closely with patient health outcomes.

Through a multi-year collaboration on a shared “Learning Laboratory,” the companies will explore value-based and pay-for-performance models, known as Outcomes-Based Risk Sharing Agreements (OBRSAs), and their potential for broad adoption among health insurance companies, pharmacy benefit managers (PBMs), and pharmaceutical companies. The initiative will involve the use of real world data to co-develop and test advanced predictive models and co-design OBRSAs to reduce clinical and financial uncertainty with respect to payment for prescription drugs.

Under OBRSAs, health plans and other payers reimburse drug manufacturers on the basis of clinical outcomes achieved. Prices can fall or rise if the results succeed or fail to meet expectations outlined in the agreement. Increasingly, OBRSAs have become part of the conversation across the health care system due to the desire by health plans, care providers, PBMs, and pharmaceutical companies to base reimbursements on evidence-based outcomes.

Because the measuring and monitoring of clinical outcomes is crucial to the viability and applicability of these models, Optum’s integrated claims and clinical records will be used to provide data reflective of real world patient care and outcomes in the United States. These data assets will enable the companies to assess OBRSA models across different patient populations, clinical settings, and therapeutic areas aligned with Merck’s product portfolio.

“Ensuring that health care dollars are spent on interventions that improve patient care and health outcomes is a shared goal for all stakeholders,” said Curt Medeiros, president of Optum Life Sciences. “This collaboration offers an opportunity to leverage our collective strengths to increase knowledge about the design and implementation of outcomes-based contracts in the U.S. health system.”

Optum and Merck plan to publicly share analytic insights, findings and recommendations to help inform and facilitate the understanding and use of pragmatic approaches to OBRSAs in the health care system.

“Our collaboration will create a unique data-driven platform to enable modeling and analysis of innovative contracts that are needed to move to a value-based health care model,” said Susan Shiff, senior vice president, Center for Observational and Real-world Evidence, Merck. “The collaboration between Merck and Optum will help advance both organizations’ common goals of improving patient health outcomes, expanding access to innovative therapies, and ensuring the best use of health care spending.”

Optum provides expertise in pharmaceutical contracting, health economic and outcomes research, actuarial analytics, and health policy and regulation, as well as access to data required for exploration of these new models. Merck provides data science and outcomes research expertise, a deep understanding of the pharmaceuticals marketplace, and years of experience working with large private and public customers to create flexible pricing models across multiple therapy areas.

About Optum

Optum is a leading information and technology-enabled health services business dedicated to helping make the health system work better for everyone. With more than 115,000 people worldwide, Optum delivers intelligent, integrated solutions that help to modernize the health system and improve overall population health. Optum is part of UnitedHealth Group (NYSE:UNH). For more information, visit