Value-based agreements are becoming increasingly important in the biopharmaceutical reimbursement space, particularly as new advanced therapeutic modalities and prospective cures for diseases which previously had no comparable treatments enter the market. Yet the departure from more traditional volume-based reimbursement models poses unique difficulties for biopharmaceutical companies, payers, patients, providers, and investors in planning for a new therapy’s rollout and the breadth of patient access to it.
This evolving landscape was the subject of a lively and informative discussion on the first day of the 2019 BIO CEO and Investor Conference. Moderated by Yasmeen Rahimi, managing mirector and senior research analyst for biotechnology at ROTH Capital Partners, the panel included:
- R. John Glasspool, Research Affiliate and Senior Advisor, FoCUS Center for Biomedical Innovation: NEWDIGS, Massachusetts Institute of Technology
- Roger Longman, Founder and Chairman, Real Endpoints
- Ron Philip, Chief Commercial Officer, Spark Therapeutics
Spark Therapeutics’ Ron Philip helped kick things off by providing an overview of the key ingredients in Spark’s launch of the first gene therapy product in the United States, Luxturna, a launch that was also pioneering in its use of value-based agreements with payers and providers. Luxturna is a one-time treatment that addresses a mutation in a single gene which causes progressive blindness over time.
“With anything that involves gene therapies or curative therapies that are basically infused or injected one time… payers naturally have the question, ‘OK, you want us to pay X amount of dollars for this particular product, and you just want us to trust [you] on whether it’s going to work or not?’” said Philip. “So as a default, when you bring forward these one-time therapies, it’s an added responsibility that you’re going to have to have creative mechanisms that prove out that the value that you’ve attributed to this therapy is actually received, not only for the patient but for the ultimate payer that’s paying for that product.”
He said that getting the right infrastructure in place to ensure a successful launch with their VBAs required a “complete rethinking” of previous frameworks. “Initially all of us started to put everything into the frame or the checklist that we previously had, and we had to pause and say that’s not going to work here.” He also noted that when talking with payers, they had to accept that just because they were being pioneering and innovative in their approach to crafting VBAs for Luxturna, it did not necessarily mean that each payer would be ready for it on day one. That reality necessitated “true strategic account management” and forming connections with high-level decision makers for payers to come to agreement and alignment on the goals and objectives of potential VBAs. Once those relationships and alignments were formed, they purposefully asked for connections into the middle and operational layers at the institutions – the folks who would be working on the nuts and bolts of crafting and negotiating the VBA. Having previously secured that initial high-level alignment and agreement, the subsequent conversations went much more smoothly.
Lastly, he noted that on the internal side, they had to create a highly-matrixed organization that involved staff spanning across patient services, market access and sales, legal, etc. They needed a point person to make sure that all of the elements from the treatment center to the payer to the patient and even the referring physician (who may have been far away in the community setting) were done well.
MIT’s John Glasspool stressed that developers need to be thinking about ways to measure and demonstrate value to payers very early in their development process, which may involve changing the design of clinical trials to capture data that may not necessarily be useful for regulators, but which could prove to be an important endpoint for payers or down the road when expanding a treatment to additional indications.
Real Endpoints’ Roger Longman echoed the point about the importance of finding the right endpoints to tie VBAs to. “Right now there’s one deal we’re involved with where the payers are saying ‘the endpoint that the manufacturer is saying is important, is in fact important, but we’re going to be spending a ton of money, even if it does achieve that endpoint, but doesn’t achieve these other endpoints which save us all the money!’ and so this notion of what that value definition is becomes extraordinarily contentious.”
There’s no question that value-based agreements will continue to play an increasingly important role in reimbursement negotiations for forthcoming biopharmaceutical products. In order to better facilitate such agreements, policymakers reforms that will make it easier for both payers and manufacturers to develop creative reimbursement models. To that end, BIO is a member of the Council for Affordable Health Coverage, a coalition of a broad group of health care stakeholders, which has put forth a set of proposals to facilitate such agreements. You may view the CAHC’s plan here: https://www.cahc.net/prescription-drugs/
For more coverage of BIOtech-NOW’s coverage of the 2019 BIO CEO & Investor Conference, please visithttp://www.biotech-now.org/tag/bioceo19