Financing a Cure for Diabetes in a Multipayer Environment

Value-Based Pricing for Patent-Protected Medicines Over the Product Life Cycle: Pricing Anomalies in the "Age of Cures" and Their Implications for Dynamic Efficiency

OBJECTIVES

Conventional cost-effectiveness analysis (CEA) for the value-based pricing of new medicines largely ignores the implications of limited market exclusivity (ie, patent-protection periods plus any exclusivity granted by regulators). This paper explores the implications of this methodological shortcoming, which produces several pricing anomalies with potentially unintended effects on research and development (R&D) incentives.

METHODS

We illustrate these implications by comparing 4 stylized examples of increasing complexity, from short-term cures for acute conditions to long-term cures for rare, health-catastrophic conditions.

RESULTS

(1) Conventional-CEA will project a different result than an adjusted CEA that considers generic or biosimilar entry; (2) free and flexible pricing of long-term treatments (eg, statins for hypercholesterolemia) or repeated-dose cures (eg, insulin for type 1 diabetes) for chronic conditions will likely result in predictable price increases at the end of the exclusivity period that may be perceived as unjustified or unsupported; and (3) one-time administration "cures" (eg, gene therapy for spinal muscular atrophy) have the potential to allocate a large share of the social surplus to the manufacturer over the product lifetime, which may or may not be dynamically efficient per se, but may also inadvertently disadvantage the development of valuable long-term treatments or repeated-dose cures for chronic conditions.

CONCLUSIONS

We highlight the need for additional research on long-term solutions to these issues that would aim to promote dynamically efficient global R&D. More work is needed on the following: (1) relationships between social surplus allocation and the amount and composition of global R&D, as we may be as likely to be encouraging excessive R&D in some areas as to be undersupplying it in others; and (2) relating the size of the surplus reward to R&D cost and, thus, the return on investment.

Financing and Reimbursement Models for Personalised Medicine: A Systematic Review to Identify Current Models and Future Options

BACKGROUND

The number of healthcare interventions described as 'personalised medicine' (PM) is increasing rapidly. As healthcare systems struggle to decide whether to fund PM innovations, it is unclear what models for financing and reimbursement are appropriate to apply in this context.

OBJECTIVE

To review financing and reimbursement models for PM, summarise their key characteristics, and describe whether they can influence the development and uptake of PM.

METHODS

A literature review was conducted in Medline, Embase, Web of Science, and Econlit to identify studies published in English between 2009 and 2021, and reviews published before 2009. Grey literature was identified through Google Scholar, Google and subject-specific webpages. Articles that described financing and reimbursement of PM, and financing of non-PM were included. Data were extracted and synthesised narratively to report on the models, as well as facilitators, incentives, barriers and disincentives that could influence PM development and uptake.

RESULTS

One hundred and fifty-three papers were included. Research and development of PM was financed through both public and private sources and reimbursed largely through traditional models such as single fees, Diagnosis-Related Groups, and bundled payments. Financial-based reimbursement, including rebates and price-volume agreements, was mainly applied to targeted therapies. Performance-based reimbursement was identified mainly for gene and targeted therapies, and some companion diagnostics. Gene therapy manufacturers offered outcome-based rebates for treatment failure for interventions including Luxturna®, Kymriah®, Yescarta®, Zynteglo®, Zolgensma® and Strimvelis®, and coverage with evidence development for Kymriah® and Yescarta®. Targeted testing with OncotypeDX® was granted value-based reimbursement through initial coverage with evidence development. The main barriers and disincentives to PM financing and reimbursement were the lack of strong links between stakeholders and the lack of demonstrable benefit and value of PM.

CONCLUSIONS

Public-private financing agreements and performance-based reimbursement models could help facilitate the development and uptake of PM interventions with proven clinical benefit.

Market access of gene therapies across Europe, USA, and Canada: challenges, trends, and solutions

This review can inform gene therapy developers on challenges that can be encountered when seeking market access. Moreover, it provides an overview of trends among challenges and potential solutions.

Paying for Cures: How Can We Afford It? Managed Care Pharmacy Stakeholder Perceptions of Policy Options to Address Affordability of Prescription Drugs

BACKGROUND

High-priced medications with curative potential, such as the newer hepatitis C therapies, have contributed to the recent growth in pharmaceutical expenditure. Despite the obvious benefits, health care decision makers are just beginning to grapple with questions of how to value and pay for curative therapies that may feature large upfront cost, followed by health benefits that are reaped over a patient's lifespan. Alternative policy options have been proposed to promote high value and financially sustainable use of these therapies. It is unclear which policy options would be most acceptable to health care payer and biomedical manufacturer stakeholders.

OBJECTIVES

To (a) briefly review pharmaceutical policy options to address health system affordability and (b) assess the acceptability of alternative policy options to health care payers and biomedical manufacturers before and after an Academy of Managed Care Pharmacy (AMCP) continuing pharmacy education (CPE) session.

METHODS

We searched MEDLINE and Cochran databases for pharmaceutical policy options addressing affordability. With input from a focus group of managed care professionals, we developed CPE session content and an 8-question survey focusing on the most promising policy options. We fielded the survey before and after the CPE session, which occurred as part of the 2016 AMCP Annual Meeting. We first conducted a chi-squared goodness-of-fit test to assess response distributions. Next, we tested how responses differed before and after by using an ordered logit and a multinomial logit to model Likert scale and unordered responses, respectively.

RESULTS

Although risk-sharing payments over time remained the most favorable choice before (37%) and after (35%) the CPE session, this choice was closely followed by HealthCoin after the session, which increased in favorability from 4% to 33% of responses (P = 0.001). About half of the respondents (54%) indicated that legislative change is the most significant barrier to the implementation of any policy.

CONCLUSIONS

As high-cost curative drugs reach the market, managed care stakeholders need information from a balanced education source regarding alternative policies to address affordability. We found that after the AMCP CPE session, risk-sharing payments over time and HealthCoin were the most favorable options.

DISCLOSURES

No funding was provided for this research. Carlson reports consulting fees from Genentech, Pfizer, and Seattle Genetics. The other authors have nothing to disclose. Study concept and design were contributed by Yeung, Garrison, and Carlson. Yeung collected the data, which were interpreted by Yeung and Basu. The manuscript was written by Yeung, Suh, and Bansal and revised by Yeung. A portion of this research was presented at the Academy of Managed Care & Specialty Pharmacy Annual Meeting as a continuing education session entitled "Paying for Cures: How Can We Afford It?" on April 20, 2016, in San Francisco, California.

Paying for Cures: Perspectives on Solutions to the "Affordability Issue"

Curative therapies and other medicines considered "game-changing" in terms of health gain can be accompanied by high demand and high list prices that pose budget challenges to public and private payers and health systems-the so-called affordability issue. These challenges are exacerbated when longer term effectiveness, and thus value for money, is uncertain, but they can arise even when treatments are proven to be highly cost-effective at the time of launch. This commentary reviews innovative payment solutions proposed in the literature to address the affordability issue, including the use of credit markets and of staged payments linked to patient outcomes, and draws on discussions with payers in the United States and Europe on the feasibility or desirability of operationalizing any of the alternative financing and payment strategies that appear in the literature. This included a small number of semistructured interviews. We conclude that there is a mismatch between the enthusiasm in the academic literature for developing new approaches and the scepticism of payers that they can work or are necessary. For the foreseeable future, affordability pressures will continue to be handled by aggressive price bargaining, high co-pays (in systems in which this is possible), and restricting access to subgroups of patients. Of the mechanisms we explored, outcomes-based payments were of most interest to payers, but the costs associated with operating such schemes, together with implementation challenges, did not make them an attractive option for managing affordability.