How Technology is Transforming Drug Rebate Management
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The complexity of drug rebate management has grown significantly in recent years. With multiple rebate structures, evolving regulations, and limited visibility across the process, pharmaceutical companies and payers face increasing challenges in tracking, optimizing, and ensuring compliance in rebate agreements.
Traditional rebate management often relies on manual processes, spreadsheets, and siloed data sources—leading to inefficiencies, errors, and revenue leakage. But technology is changing that. Automation, real-time analytics, and centralized platforms are transforming how pharma and payers approach rebate strategies.
Automation and AI
Advanced Analytics and Predictive Modeling
Improved Compliance & Transparency
The future of rebate management isn’t manual—it’s intelligent, automated, and built for scale. That’s exactly where Lyfegen comes in.
Our Rebate Analytics Platform is designed to help both payers and pharmaceutical companies take control of growing complexity. With automation, analytics, and real-time insights at its core, Lyfegen enables your team to:
Payers and pharma leaders around the world are already using Lyfegen to recover lost revenue and gain full visibility into their rebate performance.
Now it’s your turn. 👉 Book a demo and see how Lyfegen transforms rebate management—starting today.
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With price tags in the millions, gene therapies are redefining medicine—and reshaping how we negotiate access to it. For both payers and pharmaceutical companies, these breakthrough treatments present a shared challenge: how do you fund what feels priceless?
From Zolgensma to Hemgenix, gene therapies promise one-time cures for rare and life-threatening diseases. But the financial model behind them can’t follow the traditional playbook. These treatments call for a smarter, more collaborative approach to pricing—and that’s exactly what’s taking root.
Why Payers and Pharma Need a New Playbook
Unlike conventional drugs, gene therapies frontload their cost while delivering benefits over time. That disconnect forces a fundamental rethink of how pricing, reimbursement, and risk-sharing are handled.
According to the Lyfegen 2024 Drug Contracting Trends Report, health systems worldwide are moving toward innovative agreements: outcome guarantees, installment plans, and subscription-based models. These aren’t just experiments—they’re becoming essential tools to balance patient access with financial responsibility.
For payers, it’s about managing risk while maintaining equity. For pharma, it’s about demonstrating value in a way that aligns with clinical reality. Either way, the direction is clear: shared risk, shared benefit.
Global Shifts That Are Shaping the Market
The trends are global and accelerating. In the United States, payers like Blue Cross Blue Shield and Medicaid are embracing outcome-based models for sickle cell gene therapies like Casgevy and Lyfgenia. Brazil’s Ministry of Health uses installment payments for Zolgensma, spreading risk over five years while tying reimbursement to real-world outcomes.
In Europe, countries like Spain and Italy combine restricted coverage with annual reassessments, ensuring that high-cost therapies are only reimbursed if they continue to deliver results.
The message? Pricing innovation is no longer a nice-to-have—it’s the only way forward.
How Lyfegen Bridges the Gap
At Lyfegen, we help payers and pharma move beyond the negotiation table—and into action.
• Our Agreements Library, the world’s largest digital repository of value-based contracts, helps you understand what others are doing and where the benchmarks lie.
• Our pricing simulation engine lets both sides explore scenarios before committing—making deals smarter from day one.
• And our automated platform handles everything from contract setup to rebate tracking, saving time, reducing risk, and driving transparency.
A Smarter Way to Fund the Future of Medicine
Gene therapies will continue to challenge the limits of what we think healthcare can afford. But with the right models and tools, both payers and pharma can find common ground—ensuring that innovation reaches the patients who need it most.
Curious about what’s next in drug contracting?
Download the 2024 Drug Contracting Trends Report for exclusive insights, real-world examples, and global benchmarks.
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The UK government is taking a bold step toward modernizing public services by cutting red tape, integrating AI into operations, and bringing NHS England back under direct ministerial control. This reform signals a shift toward efficiency, innovation, and better patient care—one where AI-driven solutions like Lyfegen can play a pivotal role.
NHS England was originally established in 2012 as an arm’s-length organization to insulate the health service from political interference. Over time, however, bureaucracy accumulated, slowing decision-making and increasing costs. With Starmer’s decision to fold NHS England’s functions back into the Department of Health and Social Care (DHSC), the system is poised for a fresh start. This restructuring aims to eliminate redundant roles, reduce administrative waste, and reallocate resources to frontline care—ushering in a new era of efficient and accountable healthcare management.
A key takeaway from Starmer’s announcement is his strong push for automation. The government is aiming to cut administrative costs by 25%, ensuring that resources are directed where they matter most: patient care.
Some of the expected changes include:
By integrating NHS England’s functions into the DHSC, the government is positioned to strengthen and streamline negotiations with pharmaceutical companies. This shift could lead to:
One of the most promising aspects of this reform is the government’s commitment to leveraging AI to transform operations. For an AI-powered platform like Lyfegen, this presents a significant opportunity to deliver real-world benefits in healthcare management. Here’s how Lyfegen can help:
While AI promises to revolutionize healthcare efficiency, successful implementation will require overcoming hurdles such as:
Transforming the NHS is no small task. Beyond balancing innovation and cost, the government must manage vast amounts of healthcare data and navigate the complexities of implementing change at scale. However, Starmer’s announcement represents more than just another cycle of NHS reforms—it’s a meaningful step toward a future where efficiency and technology-driven innovation deliver real, lasting benefits to patients.
At Lyfegen, we’re ready to support this transformation by delivering AI-powered solutions that drive real savings and faster patient access. Let’s build a smarter, more efficient NHS together.
Want to see how our AI-powered solutions can support smarter drug pricing and better healthcare access? Let’s schedule a demo today.
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In an era of innovative therapies and escalating healthcare costs, drug contracting has become a cornerstone of sustainable healthcare delivery. Balancing the promise of cutting-edge treatments with financial realities poses a significant challenge for payers and pharmaceutical companies alike. In this blog, we’ll delve into how drug contracting is evolving to bridge the gap between value and cost and how Lyfegen’s solutions empower stakeholders to achieve this balance efficiently.
The healthcare industry faces a dual mandate: ensure patient access to life-saving treatments and maintain financial sustainability. This balance is particularly critical in the face of rising costs for innovative therapies such as gene and cell treatments, which can range from hundreds of thousands to millions of dollars per patient. For example, the average cost of some gene therapies exceeds $1 million per treatment, creating substantial financial pressure on healthcare systems and insurers.
At the heart of this challenge is the need for value-based frameworks that link reimbursement to patient outcomes. Traditional models—which rely on fixed pricing or volume-based discounts—are no longer adequate to address the uncertainties associated with high-cost therapies. These uncertainties include the long-term effectiveness of treatments, variability in patient response, and potential complications that may arise over time.
Moreover, there is increasing pressure from governments and regulatory bodies to ensure affordability without compromising access. For instance, in Europe, innovative reimbursement models are gaining traction, with over 50% of countries exploring outcome-based agreements as a way to manage budgetary constraints. Similarly, in Asia, the growing adoption of health technology assessments (HTAs) underscores the focus on aligning drug pricing with real-world effectiveness.
For payers, these dynamics mean embracing tools that provide clarity on financial risks while ensuring that patients receive timely access to treatments. Pharmaceutical companies, on the other hand, face the challenge of justifying the high costs of their therapies through transparent data and measurable outcomes. Success in this evolving landscape requires collaboration between stakeholders, data-driven decision-making, and the adoption of technology platforms that streamline the contracting process.
Traditional pricing models often struggle to account for the long-term impacts of high-cost therapies. To address these challenges, stakeholders are increasingly adopting value-based contracting models that tie payment to outcomes. However, implementing these models requires sophisticated data analysis, scenario planning, and a commitment to shared goals.
Lyfegen’s suite of tools is designed to simplify and optimize the drug contracting process, enabling payers and pharmaceutical companies to achieve their objectives efficiently. Here’s how:
1. Lyfegen Agreements Library: This comprehensive digital repository offers access to over 6,000 public agreements and 20 unique pricing models.
2. Lyfegen Drug Contracting Simulator: This tool empowers users to simulate pricing scenarios and evaluate their financial implications in real-time.
3. Lyfegen Rebate Analytics Platform (ARA): Optimize rebate management with seamless automation and centralized processes.
Adopting innovative drug contracting strategies can make the difference between missed opportunities and successful outcomes. Lyfegen’s solutions, are here to help you design contracts that balance value and cost effectively. Book your demo today to see how these tools can support your goals.
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The first quarter of the year is a pivotal time for the pharmaceutical industry. As budgets are finalized and contracts renegotiated, Q1 sets the stage for how effectively organizations manage rebates, optimize costs, and deliver value.
For those navigating the complexities of pharma rebate management, Q1 offers unique opportunities to streamline workflows, review existing agreements, and ensure every rebate maximizes its potential. This period isn’t just about planning, it’s about implementing smarter processes to stay ahead in an increasingly dynamic healthcare landscape.
Why Rebate Management Deserves Q1 Attention
Q1 is the ideal time to evaluate rebate performance from the previous year. Were the agreements aligned with expectations? Did they deliver the promised value?
By assessing past performance, teams can identify underperforming agreements and opportunities for improvement. This ensures resources are allocated to agreements that drive measurable results.
Rebate workflows are often complex, requiring significant manual effort for tracking, reconciliation, and reporting. In Q1, organizations have the opportunity to implement systems that:
Streamlining workflows early in the year creates efficiencies that save time and resources throughout the year.
The first quarter is also critical for renegotiating rebate terms with manufacturers and payers. Updated contracts may include:
Teams equipped with data from previous agreements are better positioned to negotiate terms that align with strategic goals.
The Role of Technology in Pharma Rebate Management
Technology is transforming how organizations approach pharma rebate management. Tools like those offered by Lyfegen enable teams to:
For example, Lyfegen’s platform simplifies rebate tracking and provides actionable insights, ensuring organizations maximize their rebate potential while minimizing inefficiencies.
Start your year smarter!
Q1 is the time to rethink and refine your approach to pharma rebate management. With smarter workflows, clearer insights, and a focus on data-driven strategies, your team can unlock measurable savings and operational excellence.
Book a demo today to discover how Lyfegen’s solutions can simplify your rebate workflows and set you up for success in 2025.
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Die Vertragssoftware von Lyfegen wird von Kostenträgern im Gesundheitswesen und führenden Pharmaunternehmen eingesetzt, darunter Novartis, Roche, MSD, Bristol Myers Squibb (BMS) und Johnson & Johnson.
NEW YORK/BASEL, 20. September 2022 /PRNewswire/ – Lyfegen, ein globales Healthtech-SaaS-Unternehmen, das den Übergang von volume-zu value-based Healthcare für hochpreisige Medikamente vorantreibt, gab heute eine überzeichnete Serie-A-Finanzierungsrunde über 8 Millionen Dollar bekannt, die vom Investmentfonds aMoon mit zusätzlicher Beteiligung von APEX Ventures und weiteren Investoren angeführt wurde.
Derzeit sind weniger als 2 % der Krankenversicherten, die Spezialarzneimittel benötigen, für 51 % der Arzneimittelausgaben verantwortlich. Die Kosten für Spezialarzneimittel in den USA laufen aus dem Ruder: Sie stiegen allein von 2020 bis 2021 um 12 % – und es gibt keine Anzeichen für eine Verlangsamung, denn es kommen immer mehr Zell- und Gentherapien auf den Markt. Infolgedessen wird Value-Based Contracting, die Nutzung wertorientierter Verträge, für die Kostenträger des Gesundheitswesens zu der entscheidenden Alternative, um nur für Medikamente zu zahlen, die tatsächlich wirken.
Bis 2025 werden die Nettoausgaben für Medikamente in den USA voraussichtlich bis zu 400 Milliarden US-Dollar betragen. Darüber hinaus kommen regelmässig neue Medikamente auf den Markt. Es fällt Pharmaunternehmen immer schwerer, sich mit den Kostenträgern auf kommerzielle Bedingungen zu einigen. Damit steigt die Gefahr, dass Patienten keinen Zugang zu lebensrettenden Therapien erhalten. Lyfegen hilft Regulierungsbehörden, Pharmaunternehmen und Kostenträgern bei der Einführung wertorientierter Zahlungsmodelle, indem sie den gesamten Prozess der Datenerfassung, Anonymisierung und Vertragsverhandlungen für alle Parteien digitalisiert. So kann die Preisgestaltung und Kostenerstattung für Medikamente vereinfacht werden.
„Wir freuen uns, diese Finanzierungsrunde bekannt zu geben und dieses Vertrauensvotum von aMoon, APEX und weiteren Investoren zu haben, die den Wandel im Gesundheitswesen verstehen und unser Bestreben um den Ausbau der Lyfegen-Plattform unterstützen", sagte Girisha Fernando, CEO und Gründer von Lyfegen. „Wir arbeiten derzeit mit führenden staatlichen Kostenträgern, Krankenversicherungen in Europa, den USA und dem Nahen Osten sowie mit einigen der weltweit grössten Pharmaunternehmen zusammen. Wir beabsichtigen nun, unsere Präsenz in den USA weiter auszubauen und Partnerschaften mit privaten und öffentlichen Krankenversicherungen einzugehen. Die Abkehr von der volumenbasierten Gesundheitsversorgung war noch nie so notwendig wie heute, und wir freuen uns, dass wir eine wichtige Rolle bei der Umstellung auf Value-Based Contracting spielen können."
„Lyfegen adressiert einen bedeutenden Marktbedarf in einer Branche, die sich dramatisch und schnell verändert, und wir sind begeistert, dass wir mit unserer Investition dazu beitragen können, ihre Anstrengungen zu unterstützen", erläuterte Moshic Mor, General Partner bei aMoon und ehemaliger Partner bei Greylock and Greylock Israel. „In Zeiten von Budgetdruck und Rezession im Gesundheitswesen braucht die Welt Lösungen wie die von Lyfegen mehr denn je. Wir sind stolz mit diesem erfahrenen Führungsteam zusammenzuarbeiten, das weiterhin den Zugang zu neuen Medikamenten verbessert, während es die wertorientierte Gesundheitsversorgung immer mehr zum Mainstream macht."
Informationen zu Lyfegen
Lyfegen ist ein unabhängiges, globales Softwareanalyseunternehmen, das eine wert- und ergebnisbasierte Vertragsplattform für Krankenversicherungen, Pharma- und Medizintechnikunternehmen sowie Krankenhäuser auf der ganzen Welt bietet. Die sichere Plattform identifiziert und operationalisiert wertbasierte Zahlungsmodelle kostengünstig und macht diese mit einer Vielzahl von realen Daten und maschinellem Lernen skalierbar. Mit der zum Patent angemeldeten Plattform von Lyfegen können Krankenversicherungen und Krankenhäuser eine wertorientierte Gesundheitsversorgung einführen und skalieren und so den Zugang zu Behandlungen, die Gesundheitsergebnisse der Patienten und die Kostenersparnis verbessern.
Lyfegen hat seinen Sitz in den USA und der Schweiz und wurde von Persönlichkeiten mit jahrzehntelanger Erfahrung im Gesundheitswesen, in der Pharmaindustrie und im Technologiebereich gegründet, um den Übergang von der volumenbasierten und kostenpflichtigen Gesundheitsversorgung zur wertorientierten Gesundheitsversorgung zu ermöglichen. Weitere Informationen finden Sie auf www.lyfegen.com.
Verwandte Links:
Linkedin: https://www.linkedin.com/company/lyfegenhealth
Pressekontakt: yael@gkpr.com
Ansprechpartner für Investoren: investors@lyfegen.com
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Read the Press Release on PR Newswire
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We are thrilled to welcome Ina Hasani to our team at Lyfegen as Director of Sales & Business Development for Canada. Ina brings nearly a decade of experience in the life sciences sector, specializing in healthcare strategy, market access, and health economics. We sat down with Ina to learn more about her background, her vision for transforming healthcare in Canada, and what excites her most about joining Lyfegen.
Can you tell us a bit about your background and what led you to your role as Director, Sales &Business Development for Canada at Lyfegen?
I have spent close to a decade in the life sciences sector, working with companies like Novartis and Pfizer, where I gained deep expertise in healthcare strategy, market access, and health economics. My passion has always been focused on improving patient outcomes and the healthcare system. This led me to Lyfegen, a company at the forefront of transforming healthcare through innovative solutions. The opportunity to work with payers and drug manufacturers to ensure better and sustainable access to innovative treatments for patients was a natural fit for me, both professionally and personally.
What are the biggest challenges facing the healthcare market in Canada, particularly in terms of drug pricing and access?
The Canadian healthcare system is highly complex! The biggest challenge that we are facing is how to accelerate access to innovative therapies without compromising the sustainability of the healthcare system. Payors, including both public and private insurers, are struggling to balance their budgets with the rising costs of therapies, particularly for specialty drugs. Outcome based agreements are a potential solution to enable timely access to breakthrough therapies. However, payors and pharmaceuticals don’t have the infrastructure in place to efficiently implement and operationalize such agreements.
What opportunities do you see for growth in Lyfegen’s sales efforts in Canada? How can we better support health insurers and government bodies?
There is tremendous potential for growth. Currently, payors and pharmaceuticals adjudicate their product listing agreements (PLAs) manually through Excel spreadsheets. It is resource intensive, leaves room for errors and is a barrier to potential innovative contracting. In addition, as Canada increasingly looks towards value-based healthcare models, Lyfegen is an enabler by providing the digital infrastructure for payor and manufacturers.
From your perspective, what key actions need to be taken in the next 12 months to drive success for Lyfegen in the Canadian market?
In the next 12 months, we need to focus on deepening our relationships with key stakeholders and demonstrate the value of our digital solutions for payors, manufacturers, healthcare system and, ultimately, the patients.
How do you see your role influencing the implementation of value-based solutions in Canada, and what impact do you hope to have?
Lyfegen has extensive experience in OBA implementation and operationalization in many countries. In my role, I hope to bridge the gap from theory to practice in the implementation of value-based healthcare in Canada.
In your opinion, what’s the most important aspect of building strong client relationships in the healthcare industry? How do you approach this in your role?
Trust and communication are at the core of any strong client relationship in healthcare. Given the complexity and sensitivity of the industry, clients need to know that you understand their unique challenges and are committed to solving them. In my role, I prioritize open and ongoing communication, ensuring that clients feel heard and that their feedback is integrated into our solutions. I also work hard to build trust by delivering results and being transparent about what we can achieve together.
Looking ahead, what excites you most about the future of sales and business development at Lyfegen in Canada?
I’m excited about the potential to be a catalyst for significant change in the Canadian healthcare landscape. Lyfegen is in a unique position to lead this transformation. The combination of increasing demand for cost-effective healthcare solutions and our innovative approach makes this an incredibly exciting time to be in sales and business development.
Outside of work, what are some of your favorite things to do in your free time?
Outside of work, I enjoy spending quality time with my family and friends. I also prioritize my health by being active on a daily basis. I also enjoy learning. Now that I have completed my MBA, I’m on a mission to learn Spanish.
We are excited to see Ina grow and thrive in her role at Lyfegen. Welcome to the team, Ina!
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Once upon a time, In a whimsical forest, there lived a smart and creative blue bird. This bird, known for its brilliance in the world of tiny forest biotech, had concocted a magical potion.
This potion was a wonder, a gene therapy to cure the forest creatures of a troublesome disease called sickle cell. Perched thoughtfully on a branch, the blue bird faced a whimsical yet vital challenge. The potion, potent in its healing, needed to be more than just a marvel of science – it had to be reachable and affordable for all in the forest. Additionally, this magical creation was still unnamed, a name that should echo its life-affirming qualities and the journey from a mere idea to a beacon of hope in the forest.
Amidst this puzzlement, the blue bird heard tales of the wise owls of Lyfegen, far beyond the forest. These owls were not just wise; they were masters of a different kind of magic – the magic of numbers and agreements that made health solutions reachable to all. Intrigued, the blue bird fluttered over to learn more.
As it learned about Lyfegen's remarkable ability to navigate the complex world of potion pricing and access, inspiration struck. "Ah-ha!" chirped blue bird, "If Lyfegen can make health solutions accessible, why not name my potion in honor of their work? Lyfgenia – a name that sings of life, hope, and the ingenuity of Lyfegen!"
And so, the potion was christened Lyfgenia, a nod to the owls of Lyfegen whose wisdom ensured that such medical marvels reached every nook and cranny of the forest without burdening its inhabitants.
With its new name, Lyfgenia became more than just a potion; it symbolized a harmonious blend of medical genius and financial savvy. The blue bird turned Lyfgenia into a symbol of hope and healing in the whimsical world of the forest.
Disclaimer: "A Fable of the Blue Bird and Lyfegen's Wise Owls" is a work of fiction, created solely for entertainment and illustrative purposes. This fable does not represent any real-life strategies, decisions, or actions of these entities, nor should it be interpreted as an endorsement or representation of their values, capabilities, or business practices.
Using Lyfegen's solutions can streamline the financial management of advanced therapies like Lyfgenia, leading to more effective pricing strategies and improved access for patients. Learn more about how our solutions enable value-based contracting for gene therapies: lyfegen.com
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Amid the buzz of innovation at Lyfegen, we sat down with Simon, our newest team member, whose journey has brought a fresh perspective to our mission.
Quick introduction – tell us a bit about yourself!
I'm based out of the UK. I studied Law at University but soon realized that a career as a Solicitor wasn’t my calling. Post-university, I ventured into Software Sales, initially focusing on Cloud Solutions and then transitioning into the Life Sciences realm. Most of my career has been dedicated to building startups and introducing new ideas and products to the market.
What excites you about your job?
What really thrills me about joining Lyfegen is the potential impact I can have on those needing life-saving treatments. The core goal of the pharma industry is to enhance the health and wellbeing of society, and at Lyfegen, we're crafting solutions that make medications more accessible, allowing us to treat more people. It's also incredibly rewarding to collaborate with some of the world's leading pharma companies, supporting them as they launch new assets.
Why did you decide to join Lyfegen?
It was the founders' vision that drew me to Lyfegen. Their passion was evident right from our initial conversations. Joining Lyfegen is an incredible opportunity for me to contribute my experience to another startup, and together, we can continue to thrive on this exciting journey.
What is something you want to learn or improve in the next 12 months?
Over the next year, I aim to deepen my understanding of the market access space within the pharma industry. Launching assets is intricate, with many layers involved, and there's a wealth of knowledge I'm eager to absorb. It's fascinating to learn about the different approaches of various companies and how they navigate the market.
How will your know-how help improve our customers’ experience of Lyfegen solutions?
With my background in launching new solutions for startups, I'm well-acquainted with the challenges that can arise. We can be proactive in addressing these before they occur. As Lyfegen is growing rapidly, it’s crucial that we adapt while maintaining our high standards and always remembering that our customers are our biggest priority. My experience with Global enterprises has also given me insight into the ongoing support they need and the importance of fostering great relationships based on trust and understanding.
Let’s get personal: What are your favorite things to do in your free time?
In my free time, I love to travel as much as I can, exploring different cultures and places, with my next plans to delve into more of Asia. When I'm in the UK, I spend time with my German Shepherd, Max, or playing water polo.
Is there anything else you are looking forward to outside of work in the next few months?
As we near the end of Q4, it's a busy period, but I'm looking forward to a well-deserved break over Christmas with friends and family, indulging in good food. It's the perfect time to recharge and gear up for a significant 2024 for Lyfegen, where we'll continue to serve our customers, engage with new ones, and grow as a company.
Our conversation with Simon ends on a high note, filled with anticipation for the contributions he will bring to Lyfegen. In the words of Girisha Fernando, our CEO, "we are very excited about Simon joining us. His experience is a valuable addition to our team, and we are confident he'll make a significant contribution to our mission. It's a pleasure to welcome him to Lyfegen."
Here’s to new beginnings and transformative journeys!
Welcome to our crew, Simon.
Amid the buzz of innovation at Lyfegen, we sat down with Simon, our newest team member, whose journey has brought a fresh...
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At this years World Evidence, Pricing and Access event, Girisha Fernando, the CEO of Lyfegen, expressed excitement as he spoke about the company’s latest launched offering - the Lyfegen Model & Agreement Library. This unique learning resource is a true game-changer that builds upon the company’s existing product. It expands our horizons by allowing payers and market access & pricing professionals to explore over 2’500 real-life public agreements, and 18 drug pricing models from around the world. The library provides an unparalleled understanding of drug reimbursement models that help users make better informed choices like never before.
Selecting a drug reimbursement model is very complex, as manufacturers want quick market access, while payers may have many concerns, such as a drug’s efficacy and affordability. Fernando emphasized that the library bridges the gap by assisting payers and market access professionals in finding specific models that address each stakeholder’s concerns, and key real-life agreement examples, resulting in better-informed decision-making, and ultimately more efficient reimbursement processes.
“Because of rising healthcare costs and the increase of medical innovations, the thirst for knowledge and need for value-based healthcare capabilities has surged among healthcare payers and pharma companies across the world”, said Fernando, “That is why we are excited about launching the world’s largest database of real-world value-based agreements. It gives payers and pharma a unique insight into how to structure value-based agreements.”
But that’s not all – Fernando explained that the database is constantly evolving, being updated weekly with new public agreements, allowing stakeholders to be up to date on public agreements.
Overall, it is clear that the Lyfegen Model & Agreement Library is an invaluable groundbreaking tool, that is becoming indispensable in increasing the knowledge on drug and Cell & Gene Therapy reimbursement.
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He’s analytical, a techie and has a fantastic gift for music! Yes, we are talking about the latest addition to our team, our very own “Technical Business Analyst” and Ukrainian superstar: Pavlo Lupandin!
Just last month we announced the arrival of our Lead Developer, Daniel, and now more great news follows as Lyfegen continues to lay focus on the technical team: we have our very own Technical Business Analyst, Pavlo!
“Pavlo’s sharpness and problem-solving skills just made it clear that we needed him in our team! His drive and commitment will bring great value to our patients, our customers and Lyfegen as we continue to sharpen our platform” says Lyfegen’s CEO, Girisha Fernando.
We are proud to have him as part of the team and sat down with him to give you a little more insight behind the musical talent and witty “Technical Business Analyst”:
Hi Pavlo! Tell us a little about yourself: where are you from and what is your work experience background?
Hello! I was born in the east of Ukraine, got the Master’s Degree in Economics in Kyiv, worked at one of the Big 4 companies for 3 years as an Auditor, following one year in the role of Business Analyst. After this experience, I found myself being a fresh ACCA Member, who wanted to dive into something not that accounting related. Business analysis has proven to be an interesting area where I can develop further capitalizing on my previous experience.
It’s interesting, that back in my audit days I’ve had some big healthcare-related projects. Who knew that it was only the beginning of working in this promising domain…
This is your first experience in the Health Tech industry – what triggered this move?
Pace of development. The Healthcare & IT industries are developing in overwhelming waves, and to ride the peak of those waves is a challenge – formidable, but a tempting one. As soon as this opportunity presented itself, I decided to chase it. We’ll see, where this decision will bring me in a couple of years.
You are joining Lyfegen as Technical Business Analyst. In simple terms: what will you be working on?
I would be occupied mainly with gathering, documenting and communicating the requirements of our customers. Ever heard of different communication barriers? Those I would try to eliminate, trying to grasp the very core of what has to be done for the maximum customer satisfaction and making sure the development team implements requirements as close as possible to the ideal.
What are your next personal goals with Lyfegen?
There are several of them. First, I strive for development as a professional, and I think Lyfegen will provide me with opportunities to do that. Second, I want to embrace that spirit of a high-growth startup – after working for a massive and complex company, the flexibility and freedom of Lyfegen is a breath of fresh air. And finally, I want to know new talented people. I already know, that the Lyfegen team has a great diversity, and I can’t wait to learn some interesting things from people of other countries and cultures.
What motivated you to join?
Purpose and value. As simple as that. I can see the purpose and value of what I’m doing. Obviously, we are at the beginning of this journey, and it’s a bit early to speak about “value-based pricing for everybody” or “pay only for what is really working” but…the concept is huge, and it will become the question of life and death for some patients. And I’ll do my best to make it as close to life as possible.
Enough about work! What passions do you have outside of Lyfegen?
Oh, you don’t want to hear a full list, I assure you. Let me try to sum it up quickly…Music, videogames and tabletop games – I play them all. A small collection of musical instruments – some of them are quite exotic, especially for my home country (banjo and djembe, for example). A bigger collection of tabletop games in different genres – the Lyfegen team can definitely expect a session or two in the nearest future. And a vast collection of videogames on different platforms…without much details let’s just agree there are a lot.
There are some other hobbies of mine, but I’d prefer to keep a couple of surprises up my sleeve!
We are proud to have the Lyfegen team continue to grow with such fantastic team-members!
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In June, the U.S. Federal Trade Commission (FTC) voted unanimously (5-0) to examine rising list prices of insulin, but also to probe possible anti-competitive practices by pharmacy benefit managers (PBMs) with respect to the use of rebate arrangements. Rebates are payments from drug manufacturers to PBMs in exchange for moving market share towards so-called preferred products on the formulary.
The FTC has specifically cited instances in which cheaper generics and biosimilars are excluded from PBM formularies, as this may violate competition and consumer protection laws.
The FTC inquiry into pharmacy benefit manager (PBM) practices could lead to legal action prohibiting certain rebate practices. In turn, this could induce major changes in the U.S. rebate system. Formulary management could become increasingly value- or outcomes-based, rather than simply a function of a financial power play between drug makers and PBMs. Or, rebates could fall by the wayside altogether, to be replaced by a combination of upfront discounts in lieu of rebates and value-based pricing arrangements. Partnering with Lyfegen may be the solution for manufacturers and payers alike, as its platform can put users on the right track towards successful implementation of value-based pricing arrangements.
The FTC has warned of legal action against PBMs if its inquiries find proof of anti-competitive practices. Here, the agency raised the stakes when it included terms like “commercial bribery” in its statements to describe what it perceives as anti-competitive rebates in the insulin market.
The latest FTC inquiries follow a recent investigation by Senators Grassley (R-Iowa) and Wyden (D-Oregon), which blamed rebate schemes for much of what ails the prescription drug market. Furthermore, nearly two years ago, Senator Klobuchar (D-Minnesota) and colleagues commissioned the General Accounting Office (GAO) to examine rebates. The GAO report is due out this fall.
PBMs receive rebates from drug manufacturers in exchange for preferred positioning on the formulary, which in turn drives market share. Experts have criticized rebates for the fact that payers often don’t base their decisions to include a drug on comparative clinical- and cost-effectiveness. Rather, decisions are strictly based on financial terms, namely which manufacturer offers a higher rebate payment to the PBM; a financial power play in which PBMs may threaten not to cover certain drugs if they don’t get the rebate they want. This applies to insulin as well as numerous other therapeutic categories.
What’s worse is when rebate traps or walls are involved. Branded manufacturers leverage their position as market leaders by offering financial incentives to PBMs and health insurers in the form of “all or nothing” conditional volume-based rebates, in exchange for (virtually) exclusive positioning on the formulary. This can mean keeping competitors off the formulary entirely, or severely limiting formulary access to a competing drug with drug utilization management tools like step edits. Here, a patient must use a preferred drug and fail on it (a so-called “fail-first” policy) before “stepping up” to a non-preferred drug.
Because the portion of the rebate retained by PBMs is often calculated as a percentage of a drug’s list price, PBMs can have incentives to establish formularies that favor branded drugs with higher list prices and larger rebates over lower priced biosimilars, specialty generics, or even branded competitors. Rival drugs entering the market lack sufficient sales volume to be able to offer the same level of rebates to PBMs that originator firms can provide.
Proof of the establishment of anti-competitive practices could lead to legal action being taken against PBMs. The question then becomes what would replace rebates? Payers may establish an entirely different formulary management system that is more value-based. Surely, it would be a system that’s less contingent on the role of the financial power play between drug makers and PBMs.
In areas such as immunotherapy targeting certain cancers, cell and gene therapy, and rheumatology, there are already a growing number of value-based agreements.
Girisha Fernando, CEO and Founder of Lyfegen, which offers a platform to track value-based agreements with real-world data, said that many outcomes-based deals are kept secret and therefore under the radar, so to speak. Commercial payers generally don’t share publicly what types of value-based deals they have with drug companies to maintain their competitive advantage. Yet, in an interview with Endpoints News Fernando stated that he’s observed at least a 300% increase in value-based agreements over the last five years. The Lyfegen Platform enables more efficient and transparent management of value-based drug pricing contracts by using intelligent algorithms to capture and analyze patient-level drug cost data.
Fallout from the FTC inquiry – should rebates be identified as anti-competitive - may entail further increases in value-based dealmaking.
About the author
Cohen is a health economist with more than 25 years of experience analyzing, publishing, and presenting on drug and diagnostic pricing and reimbursement, as well as healthcare policy reform initiatives. For 21 years, Cohen was an academic at Tufts University, the University of Pennsylvania, and the University of Amsterdam. Currently, and for the past five years, Cohen is an independent healthcare analyst n a variety of research, teaching, speaking, editing, and writing projects.
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CMS may want to consider value-based purchasing arrangements for Alzheimer’s Disease drugs
The Alzheimer’s Disease biologic Aduhelm (aducanumab) – a beta amyloid-directed monoclonal antibody - has experienced a tremendous amount of controversy regarding its safety and efficacy, both before and after its approval by the Food and Drug Administration (FDA) in June 2021.
A decision in April of this year by the Centers for Medicare and Medicaid Services (CMS) to place severe limitations on coverage of Aduhelm has all but killed the drug’s chances of success. And, even after Aduhelm’s original wholesale acquisition cost (WAC) of $56,000 was cut in half, there were very few takers in both the public and commercial payer spaces. Aduhelm’s “failure” to this point is partly to blame for the departure of Biogen’s CEO, Michel Vounatsos.
Could Biogen’s Aduhelm have been saved by a value-based purchasing agreement with CMS, in which Medicare Administrative Contractors and Medicare Advantage Plans only pay for Aduhelm if it provides clinical benefits to patients? Possibly. Moreover, and perhaps more importantly, such an arrangement could still be used for other beta amyloid-directed monoclonal antibodies that are currently in late stages of development and are less controversial than Aduhelm.
Under the final national coverage determination (NCD) issued in April by CMS, Medicare will severely restrict coverage of Aduhelm. Concretely, the decision implies that only Medicare beneficiaries who have enrolled in CMS-authorized randomized controlled clinical trials will get coverage of Aduhelm.
In addition, under the NCD, CMS states that, if approved by FDA, the entire class of beta amyloid-directed monoclonal antibodies will be subject to restricted reimbursement. For example, all accelerated approvals must undergo post-marketing clinical trials, analogous to the stringent requirements imposed on Aduhelm. And even beta amyloid-directed Alzheimer’s Disease drugs that go through the regular approval process must enter a coverage with evidence development protocol, which implies that post-approval collection of data in patient registries will be mandatory.
In its NCD decision, CMS did not mention a value-based purchasing agreement. Nor did it reference Aduhelm’s WAC. Given that CMS is not permitted to take cost or cost-effectiveness into account, it perhaps makes sense that Aduhelm’s WAC wasn’t mentioned.
Nevertheless, at a regional level, a value-based purchasing agreement is something Medicare Administrative Contractors and Medicare Advantage Plans could have pursued. In addition, nationally, the Center for Medicare and Medicaid Innovation has the authority to test models which modify Medicare payments for certain high-priced drugs. These models are designed to introduce a value-based approach for drugs that have been approved with limited evidence. Certainly, the class of beta amyloid-directed monoclonal antibodies fit this description.
Here, a linkage between pay and performance would need to be established, along with the proper timing of the measurement of cognitive decline in Alzheimer’s Disease patients. Performance measures could include the kinds of validated cognitive assessments outlined in the NCD.
Last year, the Institute for Clinical and Economic Review conducted a preliminary analysis of Aduhelm, extrapolating from Phase 3 data. ICER concluded that Aduhelm was not cost-effective, given the drug’s WAC, and that a cost-effective price benchmark range for would be between $3,000 and $8,400 per year for early-stage Alzheimer’s Disease patients, which is much lower than the current WAC of $28,000.
ICER’s assessment was not based on real world evidence, however. In any CMS-initiated value-based purchasing arrangement, there would be real world evidence, and accordingly adjustments could be made to the acceptable price range of the product. This could have applied to Aduhelm, but may still be relevant in future with respect to other beta amyloid-directed monoclonal antibodies, which are presently in Phase 3. These include Biogen/Eisai’s lecanemab, Roche’s donanemab, and Roche’s gantenerumab.
Aduhelm’s ship has perhaps sailed, with the baggage of the FDA approval controversy and the requirement of a randomized controlled clinical trial for any coverage at all. Nevertheless, value-based arrangements could very much be in play for other beta amyloid-directed monoclonal antibodies.
Undoubtedly this would be a major undertaking, particularly logistically. And, getting CMS to buy in won’t be easy. But, there’s precedent for CMS wanting to pursue value-based agreements. To illustrate, at the time of FDA’s approval of the CAR-T therapy Kymriah (tisagenlecleucel) in 2017 – indicated for acute lymphoblastic leukemia - it was accompanied by the announcement of a novel outcomes-based agreement with CMS, in which CMS would pay for Kymriah only if patients had responded to it by the end of the first month. Without disclosing why, CMS quietly backed away from that agreement.
Maybe the substantial unmet need in Alzheimer’s Disease will trigger CMS to consider alternative approaches to reimbursement. And, if any of the beta-amyloid directed monoclonal antibodies are approved in Europe or the U.K., similar value-based arrangements may be an option for payers.
Partnering with Lyfegen may be the solution for manufacturers and payers alike, as its platform can put users on the right track towards successful implementation of value-based purchasing agreements. The Lyfegen platform identifies and operationalizes value-based payment models in a cost-effective manner.
About the author
Cohen is a health economist with more than 25 years of experience analyzing, publishing, and presenting on drug and diagnostic pricing and reimbursement, as well as healthcare policy reform initiatives. For 21 years, Cohen was an academic at Tufts University, the University of Pennsylvania, and the University of Amsterdam. Currently, and for the past five years, Cohen is an independent healthcare analyst and consultant on a variety of research, teaching, speaking, editing, and writing projects.
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Pharma says they want greater competition within the industry and more incentives for pharmaceutical innovation; value-based purchasing agreements can provide both.
Value-based purchasing arrangements first appeared in the European markets in the 1990s, while U.S. healthcare markets did little with value-based contracts for pharmaceuticals until the 2000s. The high cost of new drugs coming to market, large annual increases in existing drug prices, and political pressure from lawmakers on payers to address the high cost of healthcare have encouraged stakeholders to make greater use of value-based purchasing arrangements.
It's easy to understand the appeal of value-based purchasing agreements for private and public payers. Value-based purchasing is one way both U.S. and European payers are using to reduce overall healthcare spending.
For drug companies, value-based purchasing puts an end to their unencumbered pricing strategy. But pharmaceutical manufacturers realize value-based purchasing agreements are the best way, and maybe the only way, to get their new, higher-priced products covered by payers and into the treatment plans of patients.
How do pharmaceutical companies determine their drug prices?
Pharmaceutical companies are in business to generate as much revenue as possible without jeopardizing patients’ access to their treatments. In the U.S., where drug pricing is unregulated, pharmaceutical manufacturers can charge any price they want for their products. In the EU, member states use regulations such as direct control over pricing, referencing the average price of a drug among all EU members to set a national price, or regulating the drug manufacturers’ profit.
When deciding on a new drug’s retail price, the manufacturer considers several areas of concern such as the drug’s competition, government-granted exclusivity, patents in force, and a drug’s clinical effectiveness and benefit to patient outcomes.
Pricing a drug incorrectly can have severe consequences for the manufacturer’s bottom line. Private and public payers in the U.S. have ways of restricting patients’ access to drugs that they consider overpriced. In European countries, drug manufacturers risk being fined by authorities for unfair prices and excessive price hikes.
Value-based purchasing promotes competition in the pharmaceutical market
In the U.S., there are economic policies and legal loopholes that manipulate competition in the drug industry. The Biden administration considers this one of the key problems to address to support drug pricing reform. The president’s Executive Order 14036, the Competition Executive Order, calls for increased transparency, innovation, and competition.
Even though manufacturers take advantage of U.S. government protections that create temporary monopolies for some drugs, the large industry trade group PhRMA has joined the call for reforms that fix the current distortions in the market that stifle competition.
Manufacturers producing new drugs with in-class competition from other manufacturers—such as generics, biosimilars, or new uses or combinations of older drugs—use the real-world evidence gathered from value-based purchasing agreements to demonstrate the greater clinical value of their treatments compared to their competitors’ products. Data that show a drug’s uniqueness and effectiveness may be used to justify a manufacturer’s higher-than-average price.
In addition, manufacturers hope aligning a drug’s price to its clinical value will shift payers’ focus away from approving treatments based solely on the lowest price to covering similar treatments that might be more expensive but produce better health outcomes for patients.
Value-based purchasing incentivizes research and development (R&D) of new drugs
The post-market clinical data gathered under value-based purchasing can facilitate data-driven drug development. For example, the drug company Novartis published a position paper in which they stated they use real-world evidence to support the development of customized interventions and to invest in research in areas of the highest value for patients.
In the U.S.market in recent years, the number of clinical trials and an overall increase in spending on brand-name prescription drugs suggest that pharmaceutical manufacturers have been concentrating their research and development dollars on new high-cost specialty drugs for complex, chronic, or rare conditions they expect will be the most profitable.
New treatments like these, where the drug’s value is yet to be established for payers, are good candidates for value-based purchasing arrangements. The successful implementation of value-based purchasing contracts—with better health outcomes for patients, cost controls for payers, and fair prices for manufacturers—encourages even more data-driven drug development.
The Lyfegen Platform
Value-based purchasing agreements are a complex but necessary part of doing business for pharmaceutical manufacturers. They provide a framework for assessing a drug’s value using shared outcome measures and provide real-world evidence of the benefits of their products for patient health outcomes. Manufacturers who are unwilling to enter into value-based purchasing contracts with payers may find themselves at a disadvantage in negotiations with other stakeholders.
Lyfegen’s software platform helps healthcare insurances, pharma, and medtech companies implement and scale value-based purchasing contracts with greater efficiency and transparency. The Lyfegen Platform collects real-world data and uses intelligent algorithms to provide valuable insights on drug performance and cost in value-based contracts. By enabling the shift away from volume-based and fee-for-service healthcare to value-based healthcare, Lyfegen increases access to healthcare treatments and their affordability.
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Beginning July 1, 2022, according to a final rule released by the U.S. Centers for Medicare and Medicaid Services (CMS), drug manufacturers will be able to report varying “best price” points (that is, multiple best prices) for a covered drug to the Medicaid Drug Rebate Program, provided they’re pursuing a value-based purchasing (VBP) arrangement that aligns pricing with outcomes-based clinical and economic measures, such as positive clinical benefits, improved quality of life, fewer physician visits, and reduced hospitalizations. Partnering with Lyfegen may be the solution for manufacturers and payers alike, as its platform can put users on the right track towards successful implementation of VBPs.
Since 1990, the statutory Medicaid rebate has ensured that states obtain lower net prices for pharmaceuticals. For brand name drugs, the rebate is 23.1% of Average Manufacturer Price (AMP) or the difference between AMP and “best price,” whichever is greater. Here, best price is defined as the lowest available price to any wholesaler, retailer, or provider, excluding certain government programs, such as the Department of Veteran Affairs program. The AMP is the average price paid to drug manufacturers by wholesalers and retail pharmacies. It is proprietary and therefore not publicly available.
The best price stipulation can, however, hamper manufacturers and payers who wish to experiment with value-based arrangements. Suppose a drug manufacturer offers a payer a 100% money-back guarantee for a treatment it is launching. Then, in case the treatment being sold is ineffective, this would imply the possibility of a Medicaid best price of zero dollars. In turn, this would require that the drug be given away free of charge to every state Medicaid program.
The new rule allows manufacturers to report multiple “best prices” for a single dosage form and strength of a therapeutic, provided the prices are tied to one or more VBPs. Further bolstering the rule is proposed bipartisan legislation – Medicaid VBPs for Patients Act – which, if passed, would codify the best price rule. Importantly, the reporting of multiple best prices under different VBPs does not impact the best price for sales outside of the VBPs.
Drug manufacturers and health insurers have long considered linking reimbursement of certain treatments, particularly cell and gene therapies, to health outcomes. Here, VBPs tie reimbursement to the actual benefits that patients receive. Accordingly, VBPs alleviate the significant risk payers take on when they reimburse the high upfront costs of cell and gene therapies; treatments which still need to demonstrate durability over time. However, drug makers and insurers have been stymied by the Medicaid best price rules. The CMS rule change aims to encourage insurers to negotiate value-based outcome deals with drug makers.
For the sake of illustration, suppose a manufacturer has a $2,000,000 gene therapy to treat a rare disease, and is willing to sign a contract which stipulates that the treatment will have its intended therapeutic effect in 80% of the patients who take it. In the VBP, the manufacturer agrees to provide a payer with an 80% rebate if a patient or subgroup of patients does not respond positively to the therapy.
In the event of treatment failure, as a signatory to the Medicaid Drug Rebate Program subject to the best price requirement, the manufacturer would be forced to extend the 80% discount – the best price of the therapy in this case is $400,000 - to the entire Medicaid program, nationwide, because it represents the best price offered to all relevant U.S. purchasers.
Under the new approach in which multiple best prices can be used, as the manufacturer of a $2,000,000 gene therapy, it can structure a VBP with a payer that promises an 80% rebate in the event a patient or subgroup of patients fails to meet pre-specified clinical outcomes. But, for the drug maker the good news is that the 80% discount will not trigger an 80% best price across all Medicaid programs.
It’s hoped that beginning in July 2022 manufacturers in the U.S. will be more willing to negotiate VBPs with payers, including Medicaid. When the rule goes into effect this summer, Lyfegen will be ready to assist companies establish successful VBPs.
About the Author
Cohen is a health economist with more than 25 years of experience analyzing, publishing, and presenting on drug and diagnostic pricing and reimbursement, as well as healthcare policy reform initiatives. For 21 years, Cohen was an academic at Tufts University, the University of Pennsylvania, and the University of Amsterdam. Currently, and for the past five years, Cohen is an independent healthcare analyst and consultant on a variety of research, teaching, speaking, editing, and writing projects.
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Each year, the NAMD (National Association of Medicaid Directors) Conference in Washington D.C. brings together the nation's Medicaid directors, leaders in the industry, and key decision-makers for a one-of-a-kind conference. With the global public health emergency, the Medicaid system and the work of Medicaid directors and their staff has never been more important. While COVID-19 has disrupted health care at all levels, it has shown the importance of more innovative payment models and the need for broader access to treatments. The shift towards value-based healthcare has become one of Medicaid’s hottest topics, with CMA and Lyfegen joining forces to present the latest value-based contracting technology at this year’s NAMD Conference.
We sat down for a brief interview with CMA’s President, Ken Romanski, and Lyfegen’s CEO, Girisha Fernando, to gain more insights into the importance of this partnership:
Thanks for joining us, Ken and Girisha. Can you tell us why this partnership is an important milestone, both for CMA and Lyfegen?
Ken: Our partnership with Lyfegen is a key milestone for CMA as we expand and complement our portfolio of technology-based solutions with extremely high-value business analytics products. Our utmost priority is to support Medicaid programs by lowering costs, while at the same time improving health outcomes for vulnerable citizens.
Girisha: This partnership sets the basis to create enormous value for our state healthcare payers and pharma. By partnering together, we enable our customers to implement value-based pharmacy agreements, actively managing the budget impact of new treatments and aligning existing formulary spending with value for beneficiaries.
For Lyfegen, this is a market entry into the U.S. – why CMA?
Girisha: CMA’s experience and technical expertise are unique. CMA is a highly recognized technology partner for State Healthcare Payers across the nation, with over 20 years of experience. Lyfegen has made a conscious decision to combine its capabilities with CMA to enable our customers to leverage the potential of value-based agreements for their pharmacy programs.
What is the value of this partnership for healthcare payers?
Ken: CMA is very excited to work with Lyfegen and our clients to deliver tens of millions of dollars in savings per year by leveraging our experience in Medicaid data management to implement this robust value-based analytics platform.
Girisha: Our customers benefit from the combined years of experience and unique expertise in data and value-based healthcare solutions. We focus on providing the first proven, scalable, highly secure value-based agreement platform for State Medicaid that allows our customers on average to avoid 54 million dollars in treatment costs that do not work and gain 7 million dollars in efficiency due to the fully automated end-to-end process. We are extremely excited to present all aspects of our partnership and present the value and opportunities our platform can bring to State Medicaid programs at NAMD.
Join CMA and Lyfegen at NAMD and understand first-hand how they can support you to realize savings for your pharmacy programs, improving patient health outcomes with their unique value-based agreement platform.
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