Can alternative payment models work for pharmaceutical manufacturers?

Alternative payment models (APMs) have transformed the way healthcare providers and insurers do business. APMs are risk-sharing agreements that incentivize high-quality, cost-effective care. These agreements continue to increase in popularity among providers and insurers. Now the idea of using APMs as a payment mechanism between pharmaceutical manufacturers and insurers is warming up.

While it’s unlikely that APMs will become the dominant contracting strategy for pharmaceuticals any time soon, the status quo in not tenable. In this article, Milliman’s Maggie Alston and Bruce Pyenson consider several issues that must be addressed for pharmaceutical manufacturers to widely embrace APMs.