BRIEF—Clarity around anti-kickback statute needed to promote innovative payment arrangements

Industry observers may have recently read about how biopharmaceutical companies and insurers are working together to implement new approaches to paying for medicines, including through results-based contracts (RBCs), which link reimbursement to real patient outcomes, writes Michelle Drozd, a deputy vice president in the policy and research department at Pharmaceutical Research and Manufacturers of America (PhRMA), on The Catalyst blog.

Yet despite growing interest and the promising benefits of RBCs, the number and scope of these types of innovative payment arrangements have been limited by several barriers, including a lack of clarity in the Anti-Kickback Statute (AKS) - a federal law that prohibits the offering of anything of value with the intent to induce the purchase of items or services paid for by federal health care programs.

While the statute’s goals are certainly important, its broad language and outdated safe harbors are hindering the uptake of RBCs, which can lower out-of-pocket costs for patients and have the potential to save money for the overall health care system.

In the past, Congress has recognized the ways in which the broad terms of the AKS might impede arrangements that are beneficial to the system and has created several legislative exceptions and regulatory safe harbors to protect certain warranties, discounts and other transactions.

But to date, no RBC-specific exception or safe harbor has been enacted. Providing clear safe harbor protection to RBCs can encourage the uptake of these innovative payment arrangements and help advance our movement toward a health care system that better recognizes value, says Ms Drozd.