This year, we spoke to dozens of health plan pharmacy executives to ask how they assess a drug’s “value” when reimbursing for drugs or choosing which drugs to put on their formularies. Traditionally, plans evaluate drugs following a strict rubric of safety, efficacy, and unit cost. They often curate internal expertise and make decisions independently within the plan, then notify providers about drug coverage preferences.

But disruptive forces—such as the high upfront cost of new treatments and the lack of comparators for first-in-class and orphan drugs—require plans to change their evaluation techniques. Progressive plans are adopting these four emerging best practices:

1. Deploy integrated value assessment teams: Form multidisciplinary teams which include representatives from pharmacy, medical, utilization management, and behavioral health to bust internal plan siloes (see page 3).
2. Consult a broader range of experts: Expand plan assessments of definitions of value by using reports from third-party health technology assessments (see page 6).
3. Expand value frameworks: Systematically broaden internal criteria for value to account for more member and population health considerations (see page 10).
4. Prioritize within local ecosystems: Work with providers, purchasers, and patients in each local “ecosystem” to prioritize and act on different aspects of value (see page 14).

Download the Research Report