The uphill battle for value-based drug pricing agreements may be coming to an end
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The high-costs of newer drug treatments make the adoption of non-traditional, value-based drug purchasing arrangements a necessity for healthcare payers and administrators trying to manage their budgets, provide patients with quicker access to the most effective treatments, and reduce wasteful spending on treatments that don’t work. Recent regulatory changes and advanced AI contracting software options are making value-based drug pricing arrangements easier.
Even before the onset of the pandemic, annual budgets for public and private healthcare insurers were strained by the high and increasing costs of prescription drugs. Meanwhile, pharmaceutical manufacturers are bringing new and even more expensive drug treatments to market each year. According to Bloomberg, the median list price for a year’s supply of a new drug introduced to the U.S. market in 2021 was $180,007.
Thanks to COVID-19 vaccines and COVID-related treatments, pharmaceutical sales reached record levels in 2021. Sales in North America account for close to half of the total $7.3 billion global market revenue for that year. And since prescription drug prices are higher in the U.S. than anywhere else in the world, the increasing costs of drugs are a top concern for policy makers, healthcare payers, and consumers.
New, more expensive drug therapies are in development
A growing niche and focus for pharmaceutical companies is high-cost cell and gene therapy products. Market analysis by Grand View Research forecasts the global cell and gene therapy clinical trials market to reach a compound annual growth rate of close to 15% and an estimated market revenue of USD 24.5 billion by 2030.
While the U.S. Food and Drug Administration (FDA) has approved only a limited number of cell and gene therapies so far, expedited approvals of new drugs and favorable designations of new therapies as orphan drug or breakthrough therapies support increasing consumption of these new drug therapies in the U.S. market. The FDA predicts that by 2025, it will approve up to 20 cell and gene therapy products a year.
Healthcare payers and consumers feel the pain of higher drug prices
Even though payers are getting rebates and not paying drug manufacturers’ full list prices, they still have cause for concern as drug prices increase annually. Payers need to protect their annual budgets from outsized expenditures, especially for specialty drugs.
Both payers and patients suffer the effects of high and increasing drug prices. A study of 14.4 million pharmacy claims made from 2010 to 2016 revealed the median healthcare insurer payments for specialty medications rose by 116%; the median patient out-of-pocket costs increased by 85%. Drug list prices during the same 7-year period more than doubled, rising faster than inflation.
Drug manufacturers recognize the need for non-traditional, value-based payment arrangements
A new cell or gene therapy’s price tag may generate as much attention as the drug’s ability to treat disease. For example, one of the most expensive drug therapies in the world is Zolgensma, approved by the FDA in 2019. Novartis Gene Therapies (formerly AveXis) developed the drug to be a cure for around 500 infants born each year in the U.S. with spinal muscular atrophy (SMA). A full course of treatment is priced at $2.125 million.
Soon after Zolgensma received FDA approval, some of the top U.S. insurers quickly set up tight restrictions limiting coverage of the treatment. To help payers manage the impact of the cost and ensure patient access to Zolgensma, Novartis offers insurers the option of either a 5-year, pay-over-time contract or an outcome-based agreement.
The list price of Zyntelgo, the latest gene therapy to be approved by the FDA, surpassed Zolgensma as the world’s most expensive one-time drug therapy. Zyntelgo was developed by bluebird bio as a single-use treatment for an inherited blood disorder, beta thalassemia. According to bluebird, Zyntelgo’s price of $2.8 million is a good value when compared to the estimated $6.4 million worth of lifetime care costs for a patient living with beta thalassemia.
Estimates suggest that only around 850 patients in the U.S. will meet the criteria for treatment with Zyntelgo, and not all of those who are eligible will want the drug. Predictions of Zyntelgo’s annual sales revenue range from $64 million to $200 million.
The majority of patients eligible for Zyntelgo are covered by commercial health insurance, with most of the rest using Medicaid. Bluebird is offering payers a sizeable refund if the treatment underperforms or fails. If patients still need blood transfusions within two years after receiving Zyntelgo, bluebird will refund the payer up to 80% of the treatment’s costs.
Payers recognize the benefits of using value-based drug pricing agreements
Outcome-based agreements help payers address any uncertainty about the effectiveness of a new treatment, gain insight into a drug’s value to patient health outcomes, and reduce the risk of overpaying for a low-value treatment. The real-world evidence collected while managing value-based drug arrangements helps manufacturers justify their list price and reinforces refunds and rebates to the payer if the treatment doesn’t deliver results as expected. So why has there not been greater use of value-based drug agreements?
Regulatory barriers to value-based drug purchasing arrangements eliminated
This year, U.S. legislators have addressed most of the legislative hurdles that, in the past, hindered value-based drug purchasing arrangements. Policymakers updated two pieces of legislation to support increased adoption of value-based drug pricing agreements.
The Medicaid Best Price rule was changed in July, allowing pharmaceutical manufacturers taking part in Medicaid to report multiple best prices. This was followed by the passage of the the Inflation Reduction Act in August, which allows Medicare to negotiate directly with drug manufacturers over the prices of some of the most expensive drugs covered by the Medicare program.
Overcoming technological challenges to implementing value-based drug agreements
Another significant obstacle to increased adoption of value-based drug pricing arrangements has been the difficulty in operationalizing complex, data-driven, outcome-based contracts. These non-traditional agreements require a powerful, interoperable contracting software platform with extensive data collection and analysis capabilities to make real-world evidence both accessible and insightful.
To take on an outcome-based contract, an organization has two options. The first is to develop the IT framework in-house and devote management resources to monitor compliance and data security. This option is expensive, time-consuming, and beyond the current capabilities of many organizations.
The second option is to outsource the administrative burden of an outcome-based contract. In recent years, third-party vendors have developed comprehensive contracting software to bridge the gap and help manufacturers, payers, and providers transition from fee-for-service into value-based agreements.
The Lyfegen Solution
Lyfegen is an independent, global analytics company that offers a software-as-a-service platform for healthcare insurances, pharma, and medtech companies wanting to participate in value-based drug pricing agreements without making large investments in software upgrades. With extensive industry expertise and a vast library of resources, we can assess your current capabilities and advise and guide you through pre-implementation. Deployment of our customizable and scalable contracting platform is quick and integrates seamlessly into your existing workflow without compromising data security or compliance.
Lyfegen’s software platform includes three-fold functionality to implement value-based, data-driven agreements with greater efficiency and transparency: data ingestion, agreement execution, and insights generation. The Lyfegen Platform collects real-world data and uses intelligent algorithms to provide valuable information about drug performance and cost.
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.
To learn more about our services and the Lyfegen Platform, book a demo.
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Under value-based drug pricing, the cost of a prescription medication reflects the value of the health benefit patients receive from the drug. Patients gain better access to effective, high-priced prescription medications, while health insurers manage financial risk and reduce healthcare costs.
U.S. consumers are paying more for prescription drugs
Patients in the U.S. pay the highest prices in the world for prescription drugs. How much higher? Here’s an example:
According to a 2020 study by RAND Health Care, the manufacturer’s average price per standard unit of insulin in the U.S. is $98.70 compared to an average price of $8.81 in other industrialized countries.
Another 2020 study by the U.S. Government Accountability Office (GAO) shows that, even after discounts and rebates, American consumers and health insurers pay more than double for most prescription drugs when compared to patients and insurers in other industrialized countries. Estimates included in a recent report from the Department of Health and Human Services (DHS) to the White House reveal patients who use prescription medications spend an average of $1,567 per person on prescription drugs each year.
High drug costs affect patient health outcomes
Patients may forgo treatment when high drug prices make healthcare too expensive. A recent poll of 1,526 adults conducted by the Kaiser Family Foundation (KFF) revealed about 3 out of 10 survey respondents had not taken their medications as prescribed over the last 12 months because of the cost.
Twenty-five percent of those surveyed reported taking four or more prescription drugs—members of this group were more likely to report difficulty affording their prescriptions. Instead of taking their medications as prescribed, the KFF survey found patients who had trouble paying for their medications often did one or more of the following:
Value-based drug pricing improves health outcomes
Value-based pricing relates the cost of a drug to the clinical benefit patients receive from the drug. When executed correctly, value-based healthcare (VBHC) contracts give patients greater access to effective treatments to improve their health outcomes while insurers pay drug prices that are in line with the value of the health benefit the drug offers.
Determining which drugs produce the greatest positive impact on health outcomes relies on the enormous task of collecting and analyzing patient-level healthcare data. One of the important ways VBHC contributes to better patient outcomes is by providing reliable, actionable, real-world data about healthcare costs.
When real-world data about a high-priced drug shows limited health benefits—or the same benefit as a similar, lower-priced drug—insurers can restrict access to the high-priced drug by requiring strict prior authorizations or increasing patient cost-sharing. When real-world data show a drug is effective, safe, and cost-effective relative to other treatments on the market, both healthcare providers and insurers work to facilitate access to that drug for patients who need it.
The Lyfegen Platform supports the transition to value-based healthcare
Lyfegen has developed a software platform that helps health insurance companies, hospitals, pharmaceutical companies, and medical device manufacturers manage value-based drug pricing contracts with greater efficiency and transparency. The Lyfegen platform uses machine learning to collect and analyze patient-level drug cost data to execute complex pay-for-performance agreements.
If your organization is considering the transformation from fee-for-service to value-based healthcare, Lyfegen can help. Contact us to learn more and to arrange a free demonstration of our platform.
Under value-based drug pricing, the cost of a prescription medication reflects the value of the health benefit patients receive from the...
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On Friday, President Donald Trump signed four executive orders aimed at lowering the high cost of prescription drugs in the United States. Our COO, Nico Mros, dives into the four executive orders.
“The four orders I’m signing today will completely restructure the prescription drug market in terms of pricing and everything else to make these medications affordable and accessible for all Americans,” Trump said at the White House last Friday.
Trump goes on to state that Americans often pay up to 80% higher prices for prescription drugs than countries like Germany and Canada.
And while the timing seems anything but coincidental, Lyfegen does not intend to discuss political views but rather understand what this could mean specifically for healthcare innovation, value-based contracting and the patients whose life depend on access to innovative therapies.
Let us briefly and in simple terms dissect the four executive orders, which are subject to the regulatory review process post Friday’s signature:
The first order targets high insulin prices and EpiPens, requiring federal community health centers to pass discounts they receive directly to patients.
The second order would allow states, pharmacies and wholesalers to import drugs from Canada, where prices are drastically lower. Importing drugs would increase competition and cause drug prices in the United States to decrease. Up until now, prices were maintained high because importing medications from other countries for personal use was illegal according to the Food and Drug Administration.
The third order is aimed at preventing “middlemen,” more commonly known in healthcare as health plan sponsors and pharmacy benefit managers (PBMs), to pocket “significant discounts” negotiated — these being “up to 50 percent of the cost of the drug” while retailing them without a discount.
The fourth order, which has been signed but is being held back until Aug. 24 to give the healthcare industry time to “come up with something” to reduce drug prices, would allow Medicare to purchase drugs at the same price as other countries by implementing a “international pricing index”.
The international pricing index would align U.S. prices to those of other countries, such as Britain, France and Canada – countries where the cost of the same drugs are substantially lower because Governments cap drug prices.
So what does this mean for pharmaceutical innovation?
Simply aligning prices to countries where governments cap drug prices (in the case of the fourth executive order) or opening the import of prescription drugs from neighboring countries (in the case of the second executive order) will result in billion dollar losses for pharmaceutical companies within the next decade, increasing the risk of losing the funds necessary to drive innovation substantially (specifically the Research & Development of cutting edge innovative therapies).
“We pay for all of the resources and all of the development and foreign countries pay absolutely nothing,” Trump said. “Americans are funding the enormous cost of drug resource for the entire planet.”
But could this mean that pharmaceutical companies, trying to compensate their losses, would (or better said, should) be forced to focus on the root problems of healthcare pricing and come up with more wide-spread innovative pricing models for a more sustainable future.
Value-based contracting and technological solutions, such as those of Lyfegen, could support such a future.
In a world where value-based pricing is the norm, world leaders would not only look over to neighboring countries for pricing levels but rather would have to focus on the value of drugs and how they improve patient health outcomes.
Pharmaceutical company executives were scheduled to meet at the White House today to discuss the executive orders but the meeting was cancelled. Moving forward, one can only hope that healthcare innovation can start coexisting with sustainable expenditure and patient access.
https://www.nytimes.com/reuters/2020/07/27/us/27reuters-usa-trump-drugprices-explainer.html/
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Lyfegen’s CFO, Michel Mohler, enlightens us on the recent measures presented by Switerland's Interior Minister Alain Berset against rising healthcare costs in Switzerland and what this means for Lyfegen.
In recent months it is difficult to ignore that various countries, also greatly due to the current pandemic, are challenging and revising their healthcare systems.
End of June, Nico reported on the Trump administration’s signed executive orders towards improving the healthcare system in the United States.
However, the wind is changing also in Switzerland as healthcare costs continue to rise. On August 19th, Switzerland’s Interior Minister Alain Berset (who also has healthcare under his responsibility) proposed a package of measures which would save the country approximately 1 Billion Swiss Francs (CHF), whilst boosting efficiency and the quality of health services.
The proposed plan includes the following measures:
1) Specialist care will only be covered if the patient first consults a general practitioner, HMO practice or a telemedical center. This will increase transparency and cost awareness throughout the entire process, ensuring that the patient only gets the treatment he/she needs from the right healthcare professional.
2) Networks of experts for coordinated care of chronic diseases are to be created on national level in order to improve the quality and efficiency of treatments, minimizing error in treatment.
3) Access to innovative but costly medication is improved through the legal consolidation of pricing-models. Pharma companies have to reimburse part of the costs to insurance companies however, until now, these were not regulated by the government. The legally set pricing models for Switzerland will be defined for reimbursement on price, sales volume, or pay-for-performance.
Overall, Berset aims at a closer cooperation between different players in the healthcare industry, increasing transparency and cost awareness.
What does this mean for Lyfegen?
Pay-for-performance is getting national recognition and legal regulation in the Swiss system. The proposed measures are now sent to cantons, political parties, institutions and organisations for consultation before the government presents its bill to parliament.
That said, this is a big step in the right direction for Lyfegen. Pay-for-performance would become a nationally recognized pricing model, meaning that Insurances will be more likely to adopt this model going forward – making the solutions of Lyfegen a necessity. Lyfeapp would allow for a facilitated methodology to collect data necessary for the value-based contracts on our Lyfevalue contracting solution. Lyfegen being the key pillar between pharma companies, insurance companies, and patients.
While we wait to see if this proposal is passed in parliament, we can now state with absolute confidence that Minister Berset’s clarity on pricing models goes hand in hand with Lyfegen’s mission: Doing what’s right for patients!
To find out more about our solutions:
Sources:https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen.msg-id-80111.html
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Through the eyes of Simon Amstutz, briefly dive into the history of Michael Porter’s value-based healthcare theory.
For those who follow Lyfegen and our blog, chances are that you already fully grasp the concept of value-based healthcare (VBHC). That said, I came to Lyfegen from a completely different field, banking, and was intrigued by the history of how this theory came to be. While my intention is not to bore you with a history class, for all future posts it is important to have a common knowledge of the framework that lies behind VBHC.
In 2006, Harvard Professor Michael Porter and his fellow academic Elizabeth Teisberg published the book Redefining Health Care: Creating Value-Based Competition on Results . This book set the fundament of VBHC.
In this book they argue that competition in healthcare should be occurring in diagnosis, treatment (outcomes), and prevention of certain health conditions rather than between insurance plans and hospitals. They propose that the healthcare system should be restructured by having competition focus clearly on improved patient outcomes. The proposed model focuses on the value (yes, hence the name) that the medication or care brings to the patient. In other words, value is measured by the best outcome for the patient per dollar spent.
This being a monumental change from the current healthcare model, which operates on a fee-for-service/product basis. Under the conventional model, drugs and therapies have to be paid for regardless of whether they actually helped the patient. .
In order to achieve such a change, Porter argues that the healthcare system needs to be able to quantify health-care processes, outcomes, patient’s experiences, and organizational systems to evaluate the effectiveness of delivered care/medication as it benefits for the patient – this seeming like the greatest challenge back in 2006. But since then, technology and processes have evolved. This is where Lyfegen comes in: the challenges that our system was faced with 14 years ago now have a clear solution: Lyfeapp and Lyfevalue.
While Porter is most definitely not the only thought leader in the VBHC sector, his book shook and rattled the healthcare industry, identifying a clear need for solutions like those proposed by Lyfegen.
To find out more about our solutions:
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Basel, Switzerland / Boston, USA – December 11, 2024
Lyfegen, a global leader in drug rebate management technology, today announced the successful close of its additional CHF 5 million Series A funding round. The round was led by TX Ventures, a leading European fintech investor, with additional participation from aMoon, a global health-tech venture capital firm, and other institutional investors. This funding represents a significant milestone for Lyfegen, enabling the company to accelerate its global expansion and innovation efforts, with a focus on extending its reach beyond Europe into new markets worldwide.
Addressing Rising Drug Costs with Intelligent Drug Pricing and Rebate Solutions
The healthcare industry faces increasing challenges with rising drug costs and the complexity of managing growing volumes of rebate agreements. For payers and pharmaceutical companies, manual processes often lead to inefficiencies, compliance risks, and operational delays. Lyfegen is transforming this process with its fully automated platform that ensures secure, real-time tracking, compliance, and operational efficiency at scale.
Today, 50+ leading healthcare organizations across 8 geographical markets rely on Lyfegen’s solutions to streamline 4'000+ rebate agreements while tracking over $1 billion in pharmaceutical revenue and managing over $0.5 billion in rebates annually. These solutions enable healthcare organizations to improve pricing strategies, accelerate access to modern treatments, and better manage rebate complexities.
Learn more about Retrospective Payment System
Scaling Globally with a Leading Rebate Management Platform
Already used by healthcare payers and pharmaceutical companies in Europe, North America, and the Middle East, Lyfegen’s platform is poised for broader global deployment. By automating rebate management, the platform enables healthcare organizations to simplify complex agreements, save time, reduce errors, and enhance financial performance.
“The market for innovative and personalized treatments is expanding rapidly, but with that comes increasingly complex and costly pricing models,” says Girisha Fernando, CEO of Lyfegen. “Lyfegen’s automated solution simplifies this complexity, helping payers and pharmaceutical companies unlock the full potential of rebates while improving patient access to modern treatments. With this funding and our new partners, we’re ideally positioned to accelerate our growth and make a meaningful impact globally.”
Jens Schleuniger, Partner at TX Ventures, adds: “Lyfegen is at the forefront of innovation, offering payers and pharmaceutical companies a powerful solution to address the rising complexities of pharma rebates. We’re proud to lead this funding round and support Lyfegen’s mission to bring greater efficiency and cost savings to healthcare systems worldwide.”
About Lyfegen
Lyfegen is an independent provider of rebate management software designed for the healthcare industry. Lyfegen solutions are used by health insurances, governments, hospital payers, and pharmaceutical companies around the globe to dramatically reduce the administrative burden of managing complex drug pricing agreements and to optimize rebates and get better value from those agreements. Lyfegen maintains the world’s largest digital repository of innovative drug pricing models and public agreements and offers access to a robust drug pricing simulator designed to dynamically simulate complex drug pricing scenarios to understand the full financial impact. Headquartered in Basel, Switzerland, the company was founded in 2018 and has a market presence in Europe, North America, and the Middle East. Learn more at Lyfegen.com.
About TX Ventures
TX Ventures is one of Europe’s emerging leaders in early-stage fintech investing. The venture capital fund invests predominantly in B2B Fintech across Europe - preferably in seed to series A stage.
For more information about Lyfegen’s solutions or to schedule an interview, please contact:
marketing@lyfegen.com
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In an industry often characterized by incremental changes, Girisha Fernando, the CEO and founder of Lyfegen, is making leaps. We sat down with Fernando to discuss the recent landmark partnership between Lyfegen and Newfoundland and Labrador Health Services—a collaboration that heralds a significant shift in the Canadian healthcare landscape.
Your partnership with Newfoundland and Labrador Health Services is quite a milestone. Can you share with us what this means for the current state of rebate management in Newfoundland?
Girisha Fernando (GF): Absolutely. This partnership is a transformative step for rebate management in Newfoundland. The current system, largely manual and complex, is ripe for innovation. With our digital platform, we're bringing a level of automation and accuracy that was previously unattainable. This means more efficient processing, less room for error, and a better allocation of resources, which is critical in healthcare.
That’s quite an advancement. And how does this impact the management of drug products, especially in areas like oncology?
GF: It’s a game-changer, especially for critical areas like oncology. Newfoundland and Labrador, as the first in Canada to use our platform, sets a precedent. The region, through the pan-Canadian Pharmaceutical Alliance, has been managing complex product listing agreements for drugs, including those for oncology. These agreements are vital for making treatments affordable. Our platform simplifies this, managing the various terms of these agreements efficiently, which is crucial for timely and affordable access to treatments.
It seems like a significant step forward for healthcare management. How does this align with the broader goals of Lyfegen?
GF: This partnership aligns perfectly with our goal to make healthcare more accessible and efficient. Automating the rebate process in Newfoundland and Labrador, especially for critical treatments in oncology, directly contributes to the sustainability and accessibility of healthcare treatments.
Looking to the future, what does this partnership mean for Lyfegen and healthcare systems globally?
GF: This is just the beginning. We're looking to extend our platform to healthcare systems around the world. Our aim is to make this technology a standard in healthcare management, fostering more efficient, sustainable, and equitable healthcare systems globally.
Read more about the partnership in the official press release.
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Basel, Switzerland, October 27, 2021
Lyfegen announces that Swiss health insurance Sympany is using the Lyfegen Platform to implement & execute complex drug pricing models. Sympany applies the Lyfegen Platform to execute and efficiently manage all value and data-driven pricing models. Sympany gains efficiency and transparency in managing pricing models with the Lyfegen Platform. It offers many pricing models, including pay-for-performance, combination therapy and indication-based models.
The Lyfegen Software Platform digitalises all pricing models and automates the management and execution of these agreements between health insurances and pharmaceutical companies. This is done using real-world data and machine learning enabled algorithms. With the Lyfegen Platform, Sympany is also creating the basis for sustainably handling the increasing number of value-based healthcare agreements for drugs and personalized Cell and Gene therapies. These new pricing models allow health insurances to better manage their financial risk by only paying for drugs and therapies that benefit patients.
"The Lyfegen Platform helps Sympany execute complex pricing models efficiently, securely and transparently. We are pleased to extend our pioneering role in the health insurance industry by working with Lyfegen. This is another step for Sympany to provide our customers with the best possible access to therapies in a sustainable way," says Nico Camuto, Head of Benefits at Sympany, about the use of the Lyfegen Platform.
Girisha Fernando, CEO of Lyfegen, says: "We are very proud to support Sympany in strengthening its focus on value creation, efficiency and transparency amidst the growing complexity of pricing models. It is clear that the trend is increasingly towards complex pay-for-performance arrangements. Ultimately, our goal is to help patients receive their much-needed treatments while helping health insurances better manage risk and cost."
The Lyfegen Platform aims to help patients access innovative medicines and treatments by enabling innovative drug pricing agreements. The Platform collects and analyzes real-time pricing data, allowing health insurances and pharmaceutical companies to obtain relevant information on drug benefits and related financial planning.
About Sympany
Sympany is the refreshingly different insurance company that offers tailored protection and unbureaucratic assistance. Sympany is active in the health and accident insurance business for private individuals and companies, as well as in the property and liability insurance business, and is headquartered in Basel. The group of companies under the umbrella of Sympany Holding AG comprises the insurance companies Vivao Sympany AG, Moove Sympany AG, Kolping Krankenkasse AG, and Sympany Versicherungen AG, as well as the service company Sympany Services AG.
In 2020, profit amounted to CHF 68.8 million, of which Sympany allocated CHF 27.5 million to the surplus fund for the benefit of its policyholders. Total premium volume amounted to CHF 1,058 million. With 575 employees, the company serves around 257,100 private customers, of which around 204,500 are basic insurance policyholders under the KVG. In the corporate customer business, Sympany offers loss of earnings and accident insurance.
More about Sympany: https://www.sympany.ch
About Lyfegen
Lyfegen is an independent, global software analytics company providing a value and outcome-based agreement platform for Health Insurances, Pharma, MedTech & Hospitals around the globe. The secure Lyfegen Platform identifies and operationalizes value-based payment models cost-effectively and at scale using a variety of real-world data and machine learning. With Lyfegen’s patent-pending platform, Health Insurances & Hospitals can implement and scale value-based healthcare, improving access to treatments, patient health outcomes and affordability.
Lyfegen is based in the USA & Switzerland and has been founded by individuals with decades of experience in healthcare, pharma & technology to enable the shift away from volume-based and fee-for-service healthcare to value-based healthcare.
Contact Press: press@lyfegen.com
Contact Investors: investors@lyfegen.com
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New York, NY - March 29, 2023 - Lyfegen, a global healthtech SaaS company driving the world’s transition from volume to value-based healthcare for high-cost drugs, announced at the World EPA Congress the launch of its latest solution: the Model & Agreement Library. The purpose of the library is to help payers and pharma negotiate better drug prices while providing an in-depth view on current international drug pricing models and value-based agreements. The database library serves as the basis for successful drug pricing negotiations, resulting in accelerated access and drug prices better aligned to their value for the patient.
The shift towards value-based healthcare, rather than volume-based, has been steadily increasing over the years. This evolution has further reinforced Lyfegen's mission to remain at the forefront of analytics and digital automated solutions for the healthcare sector. Indoing so, Lyfegen’s solutions help to accelerate access and increase affordability of healthcare treatments.
“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 Girisha Fernando, CEO of Lyfegen. “That is why we are so 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.”
The Lyfegen Model & Agreement Library was developed as an accelerated negotiation resource for both manufacturers and payers – allowing them to save on time, money; and for the first time – an opportunity to learn at their own pace without incurring large research projects or hiring expensive external experts. Users of the library are now enabled to make informed decisions in determining the most suitable drug pricing models and agreements for their products.
The database holds over 2'500+ public value-based agreements and 18+ drug pricing models – spanning across 550 drugs,35 disease areas and 150 pharma companies. Its search capabilities are spread across product, country, drug manufacturer and payer – with all the knowledge, insights, current pricing and reimbursement activities shown in near real-timeacross the industry.
“Just an academic taxonomy of models is intellectually exciting but it's not really helping your typical customer”, said Jens Grüger, Director and Partner at Boston Consulting Group (BCG). “The Lyfegen Platform goes several steps further. Payers and pharma have a problem and they want a solution. The Lyfegen Model & Agreement Library is practical. It offers case examples.”
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The Model & Agreement Library lets the user see the specifics of agreements reached between manufacturers and payers, including which disease areas and drug/device innovations were targeted. This market-leading database allows for one-to-one comparisons of agreements while heightening increased leverage during the negotiations process.
“I like having a palette of contracts that fall under different domains, like disease state, the way the drug is administered, or available evidence. There are different ways to make a contract attractive to us, to pharma, and to our physicians”, said Chester Good, Senior Medical Director Center for Value Based Pharmacy Initiatives at UPMC Health Plan.
This resource represents a breakthrough in the healthcare industry that facilitates the sharing of knowledge – a strong point of discussion that is becoming increasingly more important. Lyfegen is currently providing a limited time opportunity for industry professionals who are interested to try out the Model & Agreement Library with a complimentary 7-day trial.
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Basel, Switzerland, August 3rd, 2021
Lyfegen announces that its value-based healthcare contracting platform has been implemented together with Johnson & Johnson Medical Devices Companies Switzerland (Johnson & Johnson) and a leading Swiss Hospital.
Through this new value-based healthcare approach, Lyfegen and its partners drive the shift towards what matters most to patients: improved patient health outcomes and more efficient use of financial and human resources, enabling a sustainable post-COVID-19 healthcare environment.
The shift towards a value-based healthcare in Switzerland and globally can only be achieved through the support of innovative technologies. Lyfegen’s platform is a key enabler for this transition. The platform digitalises and automates the execution of value-based healthcare agreements, paving the way for the resource-efficient scaling of such novel agreements.
“COVID-19 has shown us the urgent need for a more sustainable healthcare system. With the implementation of value-based healthcare agreements on the Lyfegen platform, we are extremely proud to help Johnson & Johnson and hospitals to accelerate the transition to value-based healthcare and improve patient health outcomes at reduced cost.” says Lyfegen’s CEO, Girisha Fernando.
Lyfegen's compliant, secure and patent-protected value-based healthcare contracting platform automates the collection and analysis of patient-level data. Users receive transparency on actionable health outcomes and agreement performance. Lyfegen’s contribution to this partnership is a blueprint for the scaling of value-based healthcare models across hospitals, health insurances, medical device & pharma companies globally. The partnership marks another important milestone for Lyfegen, as the company continues to grow and has recently opened its next investment round.
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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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U.S. and European healthcare payers are increasing their utilization of value-based drug pricing agreements to hold down drug costs, bring better value and improvements to health outcomes, and determine a fair price for new drugs. The question of who does the assessments to determine a drug’s fair price is answered differently in the EU than in the U.S.
National healthcare leaders have a common problem to solve and a common goal to achieve. The problem is how to protect national healthcare budgets from overwhelming drug costs without discouraging pharmaceutical manufacturers from developing new products. The goal is to provide populations with equitable access to innovative, safe, clinically effective, and cost-effective healthcare therapies.
In the U.S., payers and policymakers are trying to control drug expenditures and determine the value of new drugs in an opaque, free-market environment. In Europe, government price controls and centralized clinical and economic evaluations of new drugs are standard. For both these pharmaceutical markets, drug pricing agreements based on value instead of volume are gaining traction.
The problem: drug prices keep rising
Pharmaceutical sales in Europe are almost a quarter of all drug sales globally. From 2015 to 2020, the top five European markets–the UK, Germany, France, Italy, and Spain–accounted for 17.4% of sales of new drug therapies. These top five markets are predicted to increase spending by $51 billion through 2026.
North America is the largest pharmaceutical market, accounting for almost half of the total global sales. From 2015 through 2020, the U.S. purchased 63.7% of all the new medicines introduced. The U.S. is expected to increase drug spending by an estimated $119 billion through 2026.
According to IQVIA, a leading healthcare consulting firm, the change in drug spending in the U.S. and European markets through 2026 will be due, in large part, to new brands.
The goal: access to new, high-quality drug treatments at a fair price
Healthcare payers don’t want to take on the financial risk and clinical uncertainty of a new, high-cost pharmaceutical product. Payers want to provide patients with equitable access to innovative treatments that improve health outcomes, especially in therapeutic areas with unmet health needs.
Value-based drug pricing arrangements address these concerns with evidence-driven, outcome-based agreements. The payer and manufacturer share the risks of a new drug not performing as expected. In both the U.S. and the EU, payers and manufacturers are engaged in more finance-based drug pricing contracts than performance-based contracts–but this trend is shifting.
Assessing a drug’s value in the EU healthcare system
Value-based drug pricing arrangements are called managed entry agreements (MEAs) in Europe. MEAs between drug manufacturers and healthcare payers can be finance-based (FBAs), performance-based (PBAs), or service-based agreements (SBAs).
Unlike the U.S., the EU has a centralized system for assessing a drug’s value. Each EU member state has an agency that uses an evidence-based data gathering process called health technology assessments (HTAs). HTAs include nine domains for assessment–four clinical and five non-clinical–that evaluate the efficacy and added value of a new drug compared to other treatment options already available on the market.
The work of the member states’ HTA bodies is coordinated by the European Network for Health Technology Assessment (EUnetHTA). However, conclusions and decisions related to drug pricing and reimbursement remain de-centralized.
Coverage with Evidence Development (CED) may be a part of an MEA and come after the HTA. CED is a way for urgently needed treatments to come to market under conditional approval while real-world evidence continues to be collected. This additional data should help payers decide about coverage. CED use varies by country, with the most CED found in the UK and the U.S. (through Medicare).
Related Post: Indication-specific pricing to make inroads in the U.S.
Assessing a drug’s value in the US healthcare system
The possibility of developing a centralized Health Technology Assessment for the U.S. Healthcare System was the focus and title of a white paper published in early 2020 by the University of Southern California Leonard D. Schaeffer Center for Health Policy & Economics.
The white paper describes the complexities of creating a national HTA organization in the U.S. It examines the difficult dynamics of the many stakeholders in the healthcare system; few are operating with enough transparency and coordination with other stakeholders to support value-based drug pricing. The authors conclude that in the current polarized legislative environment in the U.S., an attempt to develop a national HTA organization would be met with strong political resistance.
In the absence of the European-style centralized HTA body, U.S. payers look to alternative sources for the data they need for drug pricing negotiations. Private and public payers may find clinical and economic evaluations from various agencies that do HTAs on a limited scale. These include government and independent organizations, such as the Department of Veteran’s Affairs, Medicaid, the Patient-Centered Outcomes Research Institute (PCORI), and the Agency for Healthcare Research and Quality (AHRQ). One of the most influential organizations in this space is the independent, non-profit Institute for Clinical and Economic Review (ICER).
Unfortunately, these organizations don’t do value-based pricing evaluations for every drug that comes on the market, and some of their work is not publicly available. Even if analysis of a selected drug is available, it may not cover the key metrics a customized value-based drug pricing agreement needs to track.
When real-world data about a drug’s performance is limited, it’s often up to the manufacturer and payer entering the value-based contract to develop the framework and the data collection and analysis capability, either in-house or through a third-party vendor.
The Lyfegen Solution
The Lyfegen Platform is a customizable solution for healthcare payers, pharma, and medtech companies who need to gather and analyze real-world evidence about a drug’s performance for value-based drug pricing agreements. Lyfegen’s value-based contracting software collects real-world data and uses intelligent algorithms to provide valuable insights into clinical effectiveness and costs.
Lyfegen’s contracting platform helps implement and scale value-based drug pricing contracts with greater efficiency and transparency. By enabling the shift away from volume-based, fee-for-service healthcare to value-based healthcare, Lyfegen increases access to healthcare treatments and their affordability.
To learn more about Lyfegen’s software solutions, contact us to book a demo.
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When pharmaceutical manufacturers share clinical and economic data about their products in the pipeline, payers can prepare their budgets and formularies to launch value-based drug pricing arrangements as soon as a new treatment receives FDA approval. Pre-approval data sharing between manufacturers and payers gives patients quicker access to newly approved treatments.
As the healthcare system in the U.S. continues its transition from fee-for-service to value-based care, the sharing of healthcare economic information (HCEI) is becoming increasingly important to pharmaceutical manufacturers and healthcare payers seeking to enter value-based drug pricing arrangements.
In the past, drug manufacturers were hesitant to share HCEI and other pre-approval information with payers because regulations were unclear about the legal limits of this type of communication. But payers want HCEI from drug manufacturers for planning, formulary design, budgeting, and purchasing decisions. And lawmakers want to eliminate legislative barriers that inhibit the sharing of HCEI and the increased adoption of value-based healthcare.
The history of legislation surrounding manufacturer/payer communications
Policymakers and regulators, like the Food and Drug Administration (FDA), recognize the importance of big data and the sharing of HCEI for promoting value-based payment arrangements. Their first attempts to remove the legislative barriers to the exchange of HCEI between drug and device manufacturers and population healthcare managers did not produce the desired effects.
The first U.S. federal consumer protection law, the Food and Drugs Act, was enacted in 1906. This law’s consumer protections and law enforcement capabilities were strengthened by the 1938 Food, Drug, and Cosmetic Act (FD&C). Section 502(a) of the FD&C introduced and defined HCEI, giving the pharmaceutical industry their first instructions about what kind of economic data promotion could be communicated and with whom. But manufacturers refused to share information, fearing the penalties of accidentally disseminating off-label information.
Section 114 of the FDA Modernization Act (FDAMA) of 1997, amended FD&C Section 502(a) and provided a safe harbor for HCEI sharing. But manufacturers continued to resist sharing economic data because they felt the guidelines were still too vague about some topics, such as the definition of reliable scientific evidence and who was authorized to receive HCEI. The FDA failed to issue guidance on how to interpret the law.
The industry-wide push towards value-based care after the Affordable Care Act passed made clarification of Section 114 a priority again. In 2016, policymakers issued clarifying guidance about communications and transparency of HCEI, both pre- and post- FDA approval. The 21st Century Cures Act, Section 3037 further defined what types of HCEI and analyses could be used for drug promotion and to whom the HCEI should be communicated. The FDA published a draft payer guidance document in 2017 and then final guidance documents in 2018 suggesting ways to operationalize communications between pharmaceutical manufacturers and payers.
Current FDA guidance
An FDA press statement from June 2018 emphasizes that the 2018 guidance documents are meant to help pharmaceutical manufacturers provide payers with truthful, non-misleading background and contextual information about their products. Furthermore, manufacturers are encouraged to share both clinical data and HCEI payers need to make informed decisions about formulary management, cost effectiveness and reimbursement; this may be more and different data than the safety and efficacy data submitted by the manufacturer to the FDA for drug approval decisions.
The guidance, Drug and Device Manufacturer Communications with Payors, Formulary Committees, and Similar Entities–Questions and Answers, expands upon the sources of scientific evidence for HCEI as defined under Section 502(a). And the guidance clarifies who can receive HCEI, including public and private sector payers, formulary committees, technology assessment panels, third-party administrators, and other multidisciplinary parties.
This first guidance also addresses manufacturers’ communications with payers regarding unapproved uses of FDA-approved products. The FDA does not object to the sharing of this type of information as long as the manufacturer makes it abundantly clear in its communications what uses the product is not approved for.
The second guidance introduced in the FDA press statement is titled Medical Product Communications That Are Consistent With FDA-Required Labeling–Questions and Answers. It pertains to information not included in a drug’s labeling but information that a manufacturer may want to share with payers. Examples can include data from pre- and post-market studies or surveillance of patient compliance that can affect the measurement of a drug’s benefits to health outcomes in value-based contracts. (The first guidance offers safe harbor for communications related to the negotiations or implementation of value-based drug pricing agreements.)
Timing of information exchanges
Payers prefer to receive information regularly from manufacturers during the latter part of the FDA drug approval process. Annual budgets and formulary planning are more difficult to forecast if payers don’t have data in advance to prepare for the coverage of a new drug. Payers are more likely to make a newly approved treatment available to patients without delay when manufacturers share the clinical data and HCEI needed to make formulary and pricing decisions during pre-approval.
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Under the FDA’s accelerated approval process, therapies sometimes become available to patients even before the publication of clinical trial data is complete. Payers say, ideally, they would like clinical and HCEI data about new products 12 to 18 months before the projected FDA approval date.
Many manufacturers wait to begin communications with payers until just 6 to 12 months before their product’s expected approval date. Recognizing the importance of HCEI in negotiating value-based drug pricing arrangements, some manufacturers have included HCEI in their FDA product dossier and promotional materials for payers.
The FDA guidance recommends increased transparency about cost data, including price range, price parity with competitors, price premiums, discounts, and inflation adjustments. Some manufacturers and payers prefer to wait for final clinical trial data before discussing pricing. Post-approval data-sharing of real-world evidence must continue between manufacturers and payers to implement value-based drug pricing agreements.
The Lyfegen solution
With most regulatory barriers removed and value-based contract communications exempted from FDA reporting, policymakers hope to see an increase in value-based drug pricing arrangements. Manufacturers and payers can partner with third-party vendors like Lyfegen to employ technology that facilitates easy, continued data-sharing for innovative pricing agreements.
Lyfegen is an independent, global analytics company that offers a value-based contracting platform for healthcare insurances, pharma, and medtech companies wanting to implement value-based drug pricing arrangements with greater efficiency and transparency. The Lyfegen Platform collects real-world data and uses intelligent algorithms to provide valuable information about drug performance and cost.
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.
To learn more about our services and the Lyfegen Platform, book a demo.
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We are thrilled to announce that our tech team continues to grow: A warm welcome to Giancarlo, Lyfegen’s new Full-Stack Developer! With his background as a security engineer, he knows how to make our platform even safer!
“I am excited to welcome Giancarlo to our Tech Team as a Full-Stack developer. Giancarlo’s experience in the areas of Machine Learning, Security and Software Development are critical to our long term success and development of the Lyfegen Platform.” Says CTO, Frederico Braga
To introduce our newest team member, we virtually interviewed Giancarlo.
Welcome to the team Giancarlo! Tell us a little about yourself.
My name is Giancarlo and I live in Chur, Switzerland. I hold a bachelor’s degree in computer science. I previously worked as a security engineer, designing and implementing big data applications at a Swiss telecom company. At Lyfegen I will be working on improving our platform as a full stack developer.
What drives you to be a full stack developer?
For me, the variety of tasks is the biggest appeal of being a full stack developer: One day you could be working on low level database tasks and the next day on implementing user-interface (UI) elements. This keeps the job challenging and interesting!
What motivated you to join Lyfegen?
Until now, I was working for a rather big company where my impact was small. I wanted to change that. At Lyfegen I am able to create something meaningful from the ground up.
What is your first impression as of now?
My first impression was very positive: The people at Lyfegen are kind, helpful and smart. A perfect mix in my opinion! I’m looking forward to all the interesting tasks, complex problems and engaging conversations with my colleagues.
How will your know-how help the Lyfegen customers experience our platform the best way possible?
As a former security engineer, I know the most common threats and pitfalls when it comes to creating a software. I hope to use my expierence and knowledge to make our platform safer and more resilient to potential threats in the future.
What is something you want to learn or improve this year?
In previous jobs I was mainly developing backend applications. This year I want to improve on the frontend side and learn new technologies when it comes to graph databases. I always wanted to improve my Italian, so maybe 2021 is the year where I take some time to do just that!
What passions do you pursue outside of work?
I play lacrosse in our local club twice a week. Food is another passion of mine: I also love to cook and try new restaurants. On rainy Sundays, you’ll find me playing boardgames or Dungeons and Dragons with my friends.
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He loves innovation and thrives on solving problems using code. Besides developing and studying he plays basketball, travels and reads. We are proud to welcome the newest talent to the Lyfegen team: “Junior Developer” Thungu!
“The motivation and the skills of Thungu are undisputed. Among other things, that is what makes him and Lyfegen a perfect match. Constant evolution and progression are some of the most important objectives at Lyfegen, that is why Thungu will join our Team to help us add new UI components to our products and automate our testing processes in coordination with the UI/UX designers and Business Analysts, resulting in a higher overall quality and user satisfaction of our products. We are looking forward to work with Thungu here at Lyfegen.” Says CTO, Frederico Braga
To introduce our newest talented team member, we virtually sat down with Thungu for an interview.
Welcome to the team Thungu! Tell us a little about yourself.
Hi, my name is Thungu, and I am from Colombo, Sri Lanka. I am a Software Engineering undergraduate at the University of Westminster in my second year while working here at Lyfegen. I also volunteer for the IEEE student branch of my university to organize hackathons, webinars and other tech related events.
What drives you to be a developer?
I love figuring things out, exploring new technologies and solving problems with code. When facing challenges as a developer I always explore the “yes” and try to figure things out before accepting a “no”. That figuring out part is what drives me to be a better developer and what I enjoy mostly about being a developer.
What was your motivation to join Lyfegen?
I wanted my first work experience to be in an innovative company which has a positive impact on the world and when I got to know what Lyfegen does, I knew this was it. With value-based healthcare in its early stages, I see it’s huge potential and the unprecedented value it brings towards humanity. I knew I had to be a part of this great journey!
What are your first impressions so far?
It has been a very pleasant experience. I am enjoying the startup culture - everyone is very close, friendly and welcoming. The flexibility at Lyfegen is one of the things that I appreciate most, as it is really important for me to have an evenly work and university life balance. I am also very impressed by how dynamic and motivated the team is. Everyone is ready to move mountains for patients!
How will you improve the customer experience on the Lyfegen platform?
I will be focusing mainly on Frontend Development and Testing which includes building new components with the help of our Kateryna, our UI/UX designer and testing the functionalities of our products together with Pavlo.
What do you want to learn and improve this year?
I am looking forward to improving my skills and helping Lyfegen in other stages of Software Development in addition to Frontend Development and Testing. I also want to improve my understanding of the healthcare industry.
What are you especially looking forward to as you take on this new role?
Although I enjoy all the virtual coffees, I am very much looking forward to meeting everyone in person someday. I’m also looking forward to grow as a professional and becoming a better and experienced developer. I feel very grateful to work with such an amazing team of experienced developers and other team members.
What passions do you pursue outside of work?
I love to play basketball, create travel videos and also photography is my passion. I read books focusing on life and spirituality, I learn new technologies, and sometimes I play the guitar.
We are proud to welcome Thungu to the Lyfegen team!
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We are pleased to welcome the latest addition to our tech team! Andrei joins Lyfegen as a full-stack developer. He brings his wealth of backend and frontend experience to elevate our platform.
"I am excited to welcome Andrei to our Tech Team as a talented and motivated Full-Stack developer. Andrei brings great skills and knowledge to our team and will support us in further building our applications." Says CTO, Frederico Braga.
To introduce our newest addition, we interviewed Andrei.
Welcome to the Team, Andrei! Tell us a little about yourself.
Hi! My name is Andrei. I am from Romania, and I graduated from the Technical University of Cluj Napoca. In the last seven years, I have worked as a software developer at different companies and with different technologies like .net, iOS, Angular, Typescript, MSSQL, Mongo DB, SoapUI.
What drives you to be a full-stack developer?
I chose to be a full developer because I like to be involved in every phase of a software application, from the UI side to the server. In the last eight years, the modern technologies used for building stack server-side applications and client-side applications became much easier to use, which allows us to learn multiple technologies on both sides.
What motivated you to join Lyfegen?
At the beginning of my career, I worked for another startup company. I remember my satisfaction when someone used our product, and I want to feel that again. Lyfegen is giving me many opportunities to positively impact the world because we are driving things in the right direction. I consider value-based contracts the best solution for patients, healthcare payers and Pharma companies.
What is your first impression as of now?
I like and appreciate the whole team. All my colleagues have brilliant ideas that are bringing the Lyfegen platform to its best form. The Lyfegen platform is one of the strongest I have seen so far in my career, and this is because everyone has a voice within the team.
How will your know-how help the Lyfegen customers experience our platform the best way possible?
Throughout my career, I have worked on several big projects in different fields providing technical solutions for different problems on the frontend side and the backend side. These experiences have taught me the importance of accessibility features, and I would like to bring that knowledge to improve the user experience of Lyfegen users. I can help the Lyfegen customers better interact with the platform in terms of performance.
What is something you want to learn or improve this year?
I am looking forward to improving my understanding of the healthcare and pharmaceutical industry. From a technical perspective, I'm excited to work and learn Grandstack technologies.
What passions do you pursue outside of work?
I love to play board games, tennis and football. During the summer weekends, I like to go hiking, and in winter, I enjoy skiing. I also have an interest in politics, and I try to stay updated with trends in the IT industry because of my passion for new technologies.
What else are you looking forward to?
I look forward to deepening my relationship with my teammates. I strongly believe that working in an atmosphere that promotes teamwork makes our lives much more enjoyable. At the same time, it has a positive impact on the project.
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