Federal Trade Commission inquiry could eventually lead to overhaul of prescription drug rebate system
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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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With the right tools, healthcare providers can collect real-world evidence about a drug’s value and benefit. How do we convince them to share the data through value-based purchasing arrangements?
In the U.S., lawmakers, payers, and the public are putting pressure on healthcare providers to help transform the healthcare system in the U.S. Despite resistance from healthcare providers to abandon traditional fee-for-service models, the U.S. healthcare industry continues trending towards the adoption of value-based payment models. This transformation includes the ambitious but necessary goals of producing better public health outcomes, decreasing health disparities, increasing affordability for patients, and decreasing the cost of healthcare overall.
At the heart of value-based pharmaceutical pricing is collecting the right data to measure and assess the benefit of a treatment. Real-world evidence is needed to determine a drug’s contribution to health outcomes. As workers on the front lines, healthcare providers are in an excellent position to collect data on a drug’s performance. With this information, decision-makers can arrive at a drug price that reflects its true value to patient health outcomes.
Patients are having trouble paying for their prescriptions
A 2019 Kaiser Family Foundation Health Tracking Poll revealed three out of ten patients surveyed—ages 50 to 64 years old—stated they had difficulty paying for their medications. Drug prices, price increases, and copays and deductibles are preventing some patients from starting, or continuing, the treatments they need.
In the U.S., hospital system clinicians and independent physician practices are expected to choose the best treatments for their patients without consideration of the patient’s insurance coverage status. Providers often have little to no idea of the costs their patients will bear without insurance, after insurance deductibles and copays are met, or after a drug maker’s patient assistance program intervenes.
A patient’s cost-related nonadherence may include not filling prescriptions, skipping doses, taking a lower dose than prescribed, and experimenting with non-prescription, over-the-counter treatments; these strategies affect patient health outcomes.
When patients are already struggling to cover prescription costs, they can’t afford to waste money on low-quality treatments that are ineffective or of little benefit to their health outcomes. Providers also don’t want to waste time with treatments that don’t produce better health outcomes. Therefore, most healthcare providers are open to exploring value-based pharmaceutical purchasing agreements that can allow access to newer, more effective treatments that patients can afford.
The benefits of value-based purchasing arrangements for healthcare providers and patients
Healthcare providers willing to enter value-based pharmaceutical purchasing arrangements are rewarded with many benefits, including:
• Improved quality of care and better health outcomes for patients
Providers in value-based purchasing arrangements gather real-world evidence of the effectiveness of a drug. They collect data that reveal which treatments are the most clinically effective and which add little or no value to patient health outcomes. This could lead to new insights into best practices and new clinical guidelines and protocols.
• Increased access to innovative, more effective treatments
Under value-based purchasing arrangements, providers and patients can gain access to brand new, high-cost prescription drugs. Real-world data gathered during contract implementation reveal the new drug’s benefit to health outcomes. Value-based purchasing can also encourage providers to try other lower-cost treatment options like biosimilars and new generics.
• Greater operational efficiency and reduced overall cost of healthcare
Identifying and eliminating low-value treatments through value-based arrangements reduces the waste of resources and time for both providers and patients. The provider’s clinical operations can become more efficient and cost-effective, with positive effects on revenue and patient satisfaction.
Healthcare providers have concerns about value-based purchasing arrangements
Despite the upside, providers are wary; value-based purchasing arrangements are complex. They require careful consideration of what metrics are to be measured. Stakeholder partners must navigate a new level of transparency and data sharing. And naturally, each partner in the agreement wants to include as many protective contingencies clauses as they can think of.
Providers want to be sure implementation of the agreement doesn’t become an untenable administrative burden for their staff. There are concerns about the technology upgrades needed to collect, protect, and analyze the data generated by value-based purchasing agreements. Will there be interoperability issues with the existing electronic medical records system? How will the data be interpreted and presented to provide actionable insights?
The safest and easiest way to overcome these barriers and get help to operationalize value-based purchasing agreements is to use a vendor partner with a customizable software solution.
The Lyfegen software solution
Lyfegen created a software solution that addresses these concerns about shifting from fee-for-service payment models to value-based purchasing arrangements. We help healthcare providers, insurances, pharma, and medtech companies implement and scale value-based contracts for specialty drugs 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. In supporting the transition from volume-based to value-based purchasing arrangements, Lyfegen increases affordability and access to health treatments for patients.
To learn more about Lyfegen’s value-based contracting platform, book a demo.
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The transition to value-based care is happening at a slower pace than policymakers and healthcare industry leaders had hoped. Stakeholders are struggling to negotiate and then operationalize these complex agreements.
The adoption of value-based drug pricing agreements is not widespread in the U.S., despite the stated strong interest from policymakers and the healthcare industry in tying the price of drugs to their benefit to patient outcomes and value to the health system. Outside of the government Medicare and Medicaid programs, the fee-for-service, volume-based payment model still accounted for almost 56% of commercial health payer contracts as of 2018.
Many value-based pharmaceutical arrangements are not disclosed publicly, making it difficult to know how many are implemented in the U.S. each year. According to the trade group Pharmaceutical Research and Manufacturers of America (PhRMA), there were 73 publicly disclosed value-based drug contracts at the end of 2019. A study published the same year in the American Journal of Managed Care (AJMC) suggested that, because of the confidentiality surrounding most agreements, analysts are underestimating the number of value-based pricing arrangements in effect and their impact on the U.S. pharmaceutical market.
In this article, we will highlight some concerns a payer and manufacturer considering a value-based drug pricing arrangement may each face, and give some insight into why these agreements aren't more widely accepted.
Payers modeling risk
A 2019 survey by the National Pharmaceutical Council (NPC) and the Duke-Margolis Center for Health policy showed that for payers, top deal-breakers in negotiations for value-based pricing arrangements were disagreements over incentive mechanisms for participation and financial terms. From the payer’s standpoint, a new, high-cost drug–especially one that addresses unmet needs or rare and orphan diseases–is worth the risk if it brings innovative, effective treatment for patients who may have no other options. But payers want to share that risk with the manufacturer when there’s the potential for a substantial impact on the payer’s budget.
Based on publicly available information, oncology, hematology, cardiology, and endocrinology drug treatments are common subjects of value-based pricing arrangements. These treatments have well-defined patient populations, easy-to-see impact measures, endpoints, and cures that make them more appealing to payers. It’s much more difficult to objectively measure the patient health outcomes for treatments covering pain management or mental health.
Payers also prefer treatments that show clinical results in a few months, not years. Tracking a patient’s health to confirm a drug’s value becomes more difficult when a drug takes years to show evidence of long-term benefits. For example, a longer-term benefit of treatment may be the avoidance of hospitalization. In the U.S., patients may leave a payer’s plan at any time, so this future cost may not be captured in the data collection under a current agreement.
Manufacturers sharing risk
When considering coverage of a new drug, payers might question the results of clinical trials, especially if there is limited real-world data because of an expedited FDA approval. So manufacturers must continue to create opportunities to generate real-world evidence that convinces payers of their drug’s value. And they must be ready and willing to share in the risk that a drug may not meet expectations in phase 4 confirmatory trials.
When a new drug has strong competition in the market, manufacturers need real-world evidence to differentiate their product and show their treatment brings better clinical outcomes and value than other options available. Value-based drug pricing agreements are an opportunity to fill that knowledge gap. Pharmaceutical companies not willing to do them to get that real-world evidence may lose out to those who are ready to take on innovative pharmaceutical agreements.
Contract partners building data-gathering and analytics capacity
In the 2019 NPC survey, manufacturers cited data collection challenges and disagreements on outcome measures among their top deal breakers.
Choosing the right contract model to fit the product and the capabilities of the contract partners is the first step. This means researching publicly available value-based drug pricing arrangements to learn the rewards and pitfalls of various contract models. All the contract partners must agree on the key metrics to be measured and how the data will be used to determine a drug’s value to patient health outcomes.
For the data-sharing component of value-based pricing arrangements, contract partners must develop a relationship that includes trust, cooperation, and an unusual level of transparency. Sometimes this relationship is best fostered and protected by the support services of a neutral third party, especially when one or both of the contract partners doesn’t have the technical capacity or administrative staff to operationalize a value-based drug pricing agreement.
The Lyfegen Solution
Value-based drug pricing arrangements are hard, but Lyfegen can make them easier. If your organization is considering a value-based pricing agreement, start by researching real-world examples of drug pricing arrangements in Lyfegen’s Models and Agreements Library. With a collection of more than 20 drug pricing models and over 1000 value-based agreements in use worldwide, the Lyfegen Library can help you discern what pricing arrangement is appropriate for your goals, your current operational capabilities, and your contract partners.
Lyfegen’s value-based contracting software can then operationalize the contract model you choose. We help healthcare insurances, pharma, and medtech companies implement and scale value-based drug pricing 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.
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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Signs point to a greater role for indication-specific pricing in Medicare and Medicaid
Indication-specific pricing is a differential pricing method used by payers. Conceptually, it’s based on the idea that certain drugs with multiple indications have differential relative clinical benefit for each indication, or for each distinct patient subpopulation. The rationale behind indication-specific pricing is that the comparative clinical value of a drug can vary widely across indications, accordingly, so should the price if price and value are to align.
The figure below shows the difference between a uniform price – in this case, the price for indication A; green line – applied to all indications versus indication-based pricing.
Figure: Indication-specific pricing
Source: Institute for Clinical and Economic Review
The standard pricing model for pharmaceuticals constitutes a single price across all indications; in this instance, the price for indication A. It’s straightforward, as there is only one price. Besides, it’s the model stakeholders in the healthcare system have been accustomed to for decades. Moving to indication-specific pricing implies different prices for the four indications A, B, C, and D.
The most straightforward approach to indication-specific pricing by payers for a drug approved for, say, two different indications is to simply treat it as two different drugs. This would require two types of packaging, unique sets of National Drug Codes, for instance, for each of the packages, and for injectable drugs, two different Healthcare Common Procedure Coding System (HCPCS) J codes.
Indication-specific pricing is appealing because it supports value-based healthcare by aligning price and value. But it’s not an easy task for both drug manufacturers and payers to set indication-specific prices, as this requires patient stratification, and ultimately anchoring of prices to certain measures of cost-effectiveness, such as the cost per Quality-Adjusted-Life-Year (QALY).
Thus far, the use of indication-specific pricing has been limited in the U.S. to several pilot programs. Specifically, the pharmacy benefit manager (PBM) Express Scripts employs indication-specific pricing in number of different classes of cancer drugs, and the PBM CVS Caremark does this for several auto-immune diseases.
According to the PBMs, indication-specific pricing can provide a justification for higher prices for secondary indications that provide greater clinical benefits. In the context of value being assessed, this may help address payer resistance to expanding coverage to include supplemental indications. 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 indication-specific pricing arrangements. The Lyfegen platform identifies and operationalizes value-based indication-specific models in a cost-effective manner.
Indication specific pricing could alter prices for the biologic Avastin (bevacizumab), for example, when used for cervical cancer and colon cancer, respectively, depending on the willingness to pay threshold, which in turn may be based on different cost per QALY estimates.
Also, there are differences in the comparative value of the cancer drug Herceptin (trastuzumab) when used in different indications (metastatic versus adjuvant HER-2 positive breast cancer). A possible solution to this problem is for Herceptin to have two prices, one for its metastatic indication, and another for its adjuvant indication.
When Novartis won its groundbreaking CAR-T approval, Kymriah (tisagenlecleucel) in 2018, both the drugmaker and U.S. policymakers at Centers for Medicare and Medicaid Services (CMS) touted performance-based and indication-specific pricing as ways to help finance the $475,000 therapy. Unfortunately, the CMS backed away from a plan to implement a value-based contract for Kymriah. This decision may be revisited, as the pipeline is filled with cell and gene therapies that have large upfront costs for CMS, which must somehow be managed.
Moreover, given the many value-based experiments state Medicaid agencies are currently involved in – from value-based formularies to subscription models for the purchase of hepatitis C medications – this could spur more use of indication-specific pricing in Medicaid.
New “best price” rules in Medicaid went into effect July 1, 2022. The reason for changes in best price rules is to induce more use of value-based contract arrangements, including indication-specific pricing. Newly established protocols allow for the reporting of multiple best prices.
Specifically, to facilitate the broad adoption of these types of contracts, the novel best price rule allows drug manufacturers to report a range of best prices to the extent they may be determined by varying discounts under value-based pricing arrangements, along with the regular best price under any non-value-based pricing arrangements.
Here, value-based pricing arrangements are outcomes-based contracts which vary rebates based on patient outcomes. This can be stratified by indication. In this context, lower discounts may be offered for patients with better-than-expected outcomes in certain indications, and higher discounts for poorer outcomes and lower-than-expected clinical effectiveness of a drug in one or more indications.
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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When was the last time you used a business software or platform with a seamless user experience? Was it fun? Was it visually appealing? Probably not.
In this article, we consider the benefits of drastically improving the user experience of contracting software with examples of companies that have taken this step and inspired Lyfegen.
Contracting Software
Contracting software has usually been perceived as boring and unsophisticated, until recently. It takes careful application of innovation, user empathy, and design thinking to create unique, memorable experiences. Contracting software should focus on providing a pleasant user experience, especially when it is about patients. It takes away a whole lot of burden from the users while providing the most value.
There are new innovative designs of forms, pages, and workflows that keep users engaged and satisfied. Enjoyable contracting software should provide the most value while reducing the negative impacts.
Why great user experience is paramount to user satisfaction
Lyfegen takes cues from consumer web applications where innovation thrives. In 2020, Lyfegen conducted a big user experience review, where our product team needed to get to the bottom of what can make using the platform more enjoyable. “Why can't my business software look and feel enjoyable?" At Lyfegen we think that it can and it should. Every software should look and feel enjoyable.
We learned how users interact with the approval workflow using real-world data and feedback from customers. With these learnings, we further optimize the user experience and address issues or concerns that appear consistently. Users will bring expectations raised by consumer apps to their business applications. In response, we raise the bar to make work software equally appealing.
Lyfegen makes the whole process a breeze by rewarding customers with an amazing design experience, stepping up the game by making value-based contracting fun.
Some successful real-world examples
In consumer web applications, there are so many companies that are making drastic changes from the old design patterns to newer more innovative designs. These brands took the bold step of doing things differently while still providing the desired results. These are also the ones that Lyfegen took inspiration from.
Airbnb.com enables contracts between guests and hosts.
- Big beautiful imagery. People, smiles, quirky architecture.
- Emotional scenes that make you want to be there: cottage in the woods, hut on the beach, or a comfy townhouse.
But also clever UX: Forms disguised as slick toolbars. Generous date pickers that are easy to click
Mobile.de enables contracts between car buyers and sellers.
- Sensible defaults bootstrap your car search with a single click.
- Common search patterns detected from thousands of users turn into quick search shortcuts such as "City car" and "Family car.”
- Kickstarting a search avoids having to fill many form fields.
Upwork.com enables contracts between job seekers (talent) and hiring clients.
- The contracting path is optimized for speed. Both parties want to get the work under way quickly.
- Templates bootstrap and automate repetitive tasks. Why write every contract from scratch when you can extract best practices into a common library. Hint! This is what the Model Library will do in the Lyfegen Platform, watch out for a future blog post.
Lyfegen Platform mechanisms that bring speed and joy
The Lyfegen Platform enables contracts with pharmaceutical companies, healthcare payers and healthcare providers. At Lyfegen we understand that great user experience is paramount to user satisfaction. Hence, the reason why we pay critical attention to existing problems and proffer appropriate solutions to them is to create experiences that have the most long-lasting impact on the users.
What do we do differently to make these contracts fluid and useful?
- Forms: We use sensible defaults to make filling forms faster. Quick date pickers with popular date ranges (“Last month”, “This week”) help when scheduling is a big part of your work. Progressive disclosure reduces information overflow on forms – show only what the user needs to fill in right now to complete the task.
- Approvals: What is a modern way to do contract approvals? Chat threads! Users are familiar with chats from WhatsApp, Facebook and many other tools. A chat thread can be attached to virtually any item on the platform: agreements, claims, cases and refunds. The chat stays with the item so users don't lose context of what happened to the item.
- Tasks: How does the user know what they should be focusing on today? On the Home screen, the My tasks widget, email notifications, and the Recent Activity widget collect essential platform activity. You can see instantly what needs your attention today.
- Collaboration: @-mentions and chat threads offer quick resolution to questions. Tag a colleague and ask a question. They get a notification and provide an answer in the same thread. Problem resolved, move on! Chat works particularly well when conversation heats up and many users talk concurrently in real time.
- Interactive insights. Showing KPIs and key results on a dashboard is common practice. In fact, a dashboard is the favorite starting screen for many users. But charts really come alive when you interact with them. Have you used a mortgage calculator on a bank website? We also let users model alternative scenarios and see projections. “What will happen in my agreement next year if we continue like this?”
In conclusion, these are only a few examples of usage patterns that make contracting software modern and enjoyable. There is more room for improvement and the possibilities are endless. It requires the expertise which we at Lyfegen provide. Through our platform, we create brand new experiences in value-based contracting. Care to know more about contracting software? make sure to keep an eye out for our future posts.
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Lyfegen HealthTech AG announced today that it has raised CHF 2 million of additional capital, bringing its total funding to CHF 3 million. Read the full press release.
BASEL, Switzerland, Sept. 1, 2020 /PRNewswire/ --
- Investors back Lyfegen's mission to make innovative healthcare therapies more accessible and affordable
- Funding secures market-leading position prior to Series A opening in 2021
Lyfegen HealthTech AG, a Swiss health technology company, announced today that it has raised CHF 2 million of additional capital, bringing its total funding to CHF 3 million. The additional funding was completed by private investors and the innovation program of one of Switzerland's largest banks.
Lyfegen has developed a ground-breaking software solution to accelerate value-based healthcare contracting, pioneering in a global market that could reach USD 400 billion by 2024, according to the latest estimates by research firm MarketsandMarkets™. Some of the world's 10-largest pharmaceutical and medical technologies companies are already employing Lyfegen's platform in strategic markets in Europe and South America.
Girisha Fernando, Chief Executive Office and co-founder, said: "Increasingly, healthcare systems around the world are transitioning from fee-for-service payment schemes to value-based contracting. Our solutions support the shift towards sustainable payment models that help ensure patients get the treatments they need at prices they can afford, while healthcare companies make an adequate return on their investment. We are proud to have strong partners and investors on board to support us in this challenging and rewarding mission."
The new funding, combined with the seed capital raised in April 2019 and the founders' contributions, secures the development of Lyfegen's proprietary technology as it continues to roll out its value-based contracting solution in the U.S. as well as additional European and Latin American markets in the areas of oncology, rare diseases and medical devices.
Michel Mohler, Chief Financial Officer and co-founder, added: "We continue delivering on our ambitious goals prior to opening our Series A funding in 2021. This latest additional funding confirms the growing interest of international investors in innovative healthcare technology built for a data-driven world. The funds will be used to further strengthen our leading market position as we prepare for a strong Series A funding round."
About Lyfegen
Lyfegen HealthTech AG is a Swiss healthcare technology company that is pioneering digital value-based healthcare contracting. Lyfegen's patent-pending, ground-breaking software analyses complex healthcare data sets in order to help patients access innovative therapies that focus on the healthcare outcomes that matter most to them. Lyfegen's solutions collect the patient's specific medical profile whilst ensuring the strictest data privacy protocols. Lyfegen's founders Girisha Fernando, Michel Mohler, Nico Mros, and Leon Rebolledo have combined their expertise in life sciences and financial services to create a holistic solution that enables life sciences companies, healthcare payers and healthcare providers to develop and roll out digital value-based healthcare, a market that is set to grow to USD 400 billion by 2024.
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EGK uses the Lyfegen Platform to handle complex pricing models of on and off-label usage of more than 80 drugs
Basel, Switzerland - November 29, 2022 - Lyfegen, a global healthtech SaaS company driving the world’s transition from volume to value-based healthcare for high-cost drugs, announced today that EGK-Gesundheitskasse is joining its portfolio of insurer partners to execute all of their value-based pricing contracts for high-cost drugs efficiently, securely, and transparently.
Switzerland, with the fourth-highest pharmaceutical spending per capita, spent CHF 8 Billion (8.1 billion euro) on drugs prescribed for specific diseases in the first nine months of 2022. In an effort to combat the high drug spending, Switzerland has implemented an increasing number of discount models for on and off-label drug usage over the last five years. While intending to ensure accessibility to patients at sustainable prices, the complexity of the price models leads to millions spent by insurers to monitor and adjudicate the price models, resulting in an estimated CHF two- to three-digit million range of missed rebates.
Lyfegen's software enables EGK to identify and claim rebates from 141 drug price models with 32 manufacturers, with minimal effort and maximum transparency. This includes cases of rare or chronic illnesses, promising therapies that may be used outside the approved indication, or new drugs not yet available or approved in Switzerland. Lyfegen's platform addresses the needs of Swiss health insurers for cost efficiency and digitalization, helps solve existing complexities in the system, and does its utmost to counteract high insurance premiums.
"We are delighted to support EGK and take an active role in addressing the growing complexity of drug pricing models to support sustainable access to innovative drugs and therapies in Switzerland,” said Nico Mros, CXO and Co-Founder of Lyfegen. “By focusing on making the implementation of the platform as easy as possible and being responsive to EGK, we were able to quickly present results and kickoff the collaboration to a successful start!"
“With the Lyfegen Platform, EGK is further expanding its focus on sustainability and efficiency for the benefit of our policyholders”, said Carolina Pirelli, Head of Benefits and Deputy CEO at EGK. “The ever-increasing number of pricing models for medications poses challenges for insurance companies in terms of resources and processes. With the automated processing of pricing models through the Lyfegen Platform, we are able to perfectly meet our current needs and with Lyfegen's flexibility, focus and understanding, we see ourselves in good hands.”
About Lyfegen
Lyfegen is a global healthtech SaaS analytics company providing a value-based agreement platform for drugs, therapies and devices. Health insurances, pharma, medtech companies & hospitals use the secure platform for thousands of payment models throughout Switzerland, Europe, the Middle East and North America. The Lyfegen Platform supports the negotiation and automated execution of value-based payment models cost-effectively and at scale using real-world data and machine learning. Globally renowned health insurances, hospitals, pharma & medtech companies have already implemented Lyfegen’s patent-pending platform to scale value-based payment models for drugs, therapies and devices, improving access to treatments and patient outcomes.
Lyfegen was founded by individuals with decades of experience in healthcare, pharma and technology, pioneering the shift away from volume-based and fee-for-service healthcare to value-based healthcare. For more information, visit www.lyfegen.com.
About EGK-Gesundheitskasse
EGK-Gesundheitskasse is an SME health insurer based in Laufen (BL), Switzerland. The EGK Group comprises EGK Grundversicherungen AG (basic insurance in accordance with KVG), EGK Privatversicherungen AG (supplementary insurance in accordance with VVG) and EGK Services AG (administration). It insures around 100,000 people in basic insurance throughout Switzerland, 80% of them also have EGK supplementary insurance.
Naturalness and sustainability are part of EGK's values. It is considered a pioneer in providing unrestricted access to excellent complementary medicine. It launches and supports activities throughout Switzerland to strengthen health in a natural way.
Read on PR newswire in English
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Lyfegen’s value-based contracting software is used by healthcare payers and leading pharma companies, including Novartis, Roche, MSD, Bristol Myers Squibb (BMS) and Johnson & Johnson
New York, NY - September 20, 2022 - Lyfegen, a global healthtech SaaS company driving the world’s transition from volume to value-based healthcare for high-cost drugs, today announced an oversubscribed $8 million Series A financing round led by aMoon, with additional participation from APEX Ventures and others.
Currently, less than 2% of the health insurance population requiring specialty drugs is responsible for 51% of drug spending. The cost of specialty drugs in the US is spiraling out of control, increasing 12% from 2020 to 2021 alone, with no sign of slowing down due to the increase of cell and gene therapies expected to come to market. As a result, value-based contracting is becoming a more viable alternative for healthcare payers to only pay for drugs that actually work.
By 2025, total net spending on medicine in the US is expected to reach up to $400B. Additionally, new drugs regularly enter the market, but when pharmaceutical companies fail to agree on commercial terms with payers, patients are at risk of being denied access to life saving therapies. Lyfegen’s platform helps regulators, pharma companies and payers more easily adopt value-based payment models by digitizing the end-to-end process of data collection, anonymization and contract negotiations for all parties to agree upon drug pricing and reimbursement.
“We are excited to be announcing this funding round and to have this vote of confidence from aMoon, APEX and our other investors who understand the shift in healthcare that we are experiencing, and are supporting our efforts to expand the Lyfegen platform,” said Girisha Fernando, CEO and founder of Lyfegen. “We currently work with leading government payers, health insurance companies in Europe, the US and the Middle East, and some of the world’s largest pharma companies. Our plan now is to further expand our presence in the US, partnering with both private and public healthcare insurance companies. The move away from volume-based healthcare has never been more needed, and we are happy to play an important role in the shift to value-based contracting.”
“Lyfegen is addressing a significant market need in an industry that is changing dramatically and rapidly, and we are thrilled to help validate their efforts through our investment,” said Moshic Mor, General Partner at aMoon, and former Partner at Greylock and Greylock Israel. “During a time of healthcare budget pressures and recessions, the world needs Lyfegen’s solution now more than ever. We look forward to seeing the company, led by an incredible executive team, continue to enhance access to new drugs as they drive value-based healthcare to become increasingly mainstream.”
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 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 was founded by individuals with decades of experience in healthcare, pharma and technology to enable the shift away from volume-based and fee-for-service healthcare to value-based healthcare. For more information, visit www.lyfegen.com.
Media Contact
Yael Hart
GK for Lyfegen
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The whitepaper is a joint initiative to share with healthcare stakeholders some of Lyfegen and KPMG’s expertise and experience in the development and implementation of value and data-driven agreements in an evolving healthcare environment.
Official Communication by KPMG on 26.10.2020
KPMG addresses the most pressing challenges the healthcare sector is facing today and in the future. Society’s desire to obtain value from the wider healthcare system is not new, however recent experience shows that there is a need to rethink and move healthcare into a new age.
Two current megatrends are: 1) the redesign of pricing for health solutions, and 2) the value of data and the importance of patient access. It is important to address both elements within the Life Sciences ecosystem, including how to innovate, how to develop successful digitalization strategies, and how to get the most out of data.
How outcome-based contracts benefit healthcare
The pricing of services and products based on outcomes or value created is another intrinsic element of the future of healthcare. Rising healthcare costs impact patient budgets and hinder access to treatments. Incentivizing positive outcomes can only benefit patients, while payers gain confidence that they are only reimbursing effective treatments. Manufacturers and providers that buy into the outcome-based model are taking an important step towards making their business more sustainable while contributing to the wider interest of the healthcare ecosystem.
One of the key issues has always been defining the factors that represent value and deciding how to measure them. To give an example, how do you measure if a patient is symptom-free and how long should the observation period last? How is the impact on those caring for an individual considered and how is the societal or economic impact assessed, e.g., can the individual go back to pursuing a career? These questions are key in any reimbursement of pricing arrangements.
Helping the healthcare community
Teaming up with Lyfegen, a healthtech company facilitating access to innovative therapies, KPMG recently published a joint whitepaper (see link below) on the application of outcome-based contracting. Girisha Fernando (CEO and Founder of Lyfegen HealthTech AG) and Martin Rohrbach (Head of Life Sciences for KPMG Switzerland) discuss how this approach can deliver value for healthcare payers, providers and patients.
The whitepaper is a joint initiative to share with healthcare stakeholders some of Lyfegen and KPMG’s expertise and experience in the development and implementation of value and data-driven agreements in an evolving healthcare environment. The combination of knowledge, reach, and technology specific to value-based healthcare, together with proven practical experience, brings unique insights into value and data-driven pricing agreements for healthcare stakeholders. The whitepaper focuses on why outcome-based contracting can address drug access and reimbursement challenges, and how such contracts can be enabled by innovative technology. There are some clear takeaways, serving as building blocks and opportunities to engage in outcome-based contracting for the benefit of healthcare systems.
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Basel, Switzerland | April 17th, 2019 – Lyfegen HealthTech AG successfully closes its seed financing round, raising a total of CHF 750‘000. The funding was led by Swiss private investors. The funds will be used to further build Lyfegen’s value-based payments platform Lyfevalue and conduct further pilots with partners in the US, Africa, and the EU, including the UK.
Lyfegen is a healthcare technology company that has developed a ground-breaking solution to accelerate value-based healthcare, entering a market set to grow to USD 390.7 billion by 2024 according to latest market research. Its platform, Lyfevalue, collects, analyses & reconciles disparate healthcare data for the purpose of automating value-based healthcare contracting. The platform enables life sciences companies, national and private healthcare payers and healthcare providers to operationalise value-based healthcare strategies whilst benefiting from a single holistic solution for their value-based healthcare operations, visit checklistmaids.com. In addition, the platform allows for personalised healthcare by enabling patient level pricing, fostering accelerated and facilitated access to innovative treatments for patients.
“Enabling the shift to sustainable healthcare is a huge challenge, giving us at Lyfegen great purpose and we are honoured to work with individuals that truly care about making a difference for patients around the world,” said Girisha Fernando, Lyfegen’s CEO & Founder.
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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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The Joint Clinical Assessment (JCA) is poised to fundamentally change how health technologies gain market access across the European Union. Designed to streamline the evaluation process, the JCA promises to bring greater consistency, transparency, and efficiency to how new therapies and medical technologies are assessed for clinical effectiveness. But what does this mean for your market access strategies?
What is the JCA?
The JCA is a central pillar of the EU’s updated Health Technology Assessment (HTA) regulations. Historically, pharmaceutical and medical device companies faced significant hurdles when introducing new health technologies across different EU member states. Each country has had its own HTA process, leading to duplicated efforts, inconsistent outcomes, and delays in patient access. With the JCA, clinical assessments will be conducted at the EU level, offering a unified approach to evaluating the relative effectiveness of new treatments.
Key Benefits of the JCA
The JCA is expected to address several long-standing challenges:
1. Streamlined market access: By replacing multiple national HTA evaluations with a single EU-level assessment, the JCA will reduce duplication and accelerate the time it takes for new health technologies to reach the market.
2. Consistency across the EU: With the JCA, companies can expect more predictable and transparent outcomes when navigating the regulatory landscape. This will help align market access efforts across all member states, making it easier for companies to plan and execute their market entry strategies.
3. Cost efficiency: By pooling resources and conducting joint clinical assessments, the JCA is expected to save HTA bodies across the EU millions of euros annually. This increased efficiency will also benefit pharmaceutical and medical technology companies by reducing the administrative and financial burden of complying with multiple HTA processes.
How Will the JCA Impact Your Market Access Strategy?
For companies looking to introduce new health technologies in the EU, the JCA will bring both opportunities and new considerations:
• Early Engagement Will Be Key: The unified nature of the JCA means that companies will need to engage early with EU-level HTA bodies to ensure that their clinical data meets the requirements of the JCA. This early engagement can help smooth the path to market and avoid potential delays.
• A Shift in Regulatory Focus: With clinical assessments now being handled at the EU level, companies may need to adjust their strategies for navigating national market access pathways. While the JCA will simplify the clinical assessment process, national bodies will still be responsible for non-clinical aspects, such as pricing and reimbursement decisions.
• Data Consistency and Quality: The JCA emphasizes the importance of high-quality, consistent clinical data. Companies will need to ensure that their submissions are robust and aligned with the JCA’s methodology to avoid discrepancies and delays in the assessment process.
The Role of Technology in Managing Market Access
As market access strategies evolve with the implementation of the JCA, technology platforms like Lyfegen can play a crucial role in helping pharmaceutical and medical technology companies adapt. Lyfegen’s platform simplifies the process of planning, tracking, and managing health technology assessments, ensuring that companies are well-prepared to meet the requirements of the JCA.
By leveraging advanced analytics and real-time data management tools, Lyfegen enables companies to streamline their market access efforts, ensure compliance with EU-level assessments, and maintain transparency throughout the process. With the increasing complexity of market access in the EU, technology will be a critical factor in ensuring success.
Conclusion: Preparing for the Future of Market Access
The JCA is set to transform market access strategies across the EU by creating a more efficient, unified, and predictable pathway for introducing new health technologies. As companies navigate this new landscape, early preparation, high-quality clinical data, and the right technological tools will be essential to staying ahead.
Unlock smarter market access strategies with Lyfegen’s advanced tools! The Lyfegen Drug Contracting Simulator empowers you to navigate the complexities of the JCA, model various pricing scenarios, and optimize your market entry plans. Combined with the Lyfegen Library’s extensive collection of market access models, you’ll have everything you need to succeed in the EU’s evolving regulatory landscape.
Act Now – Book a demo of Lyfegen’s platform and learn how we can support your market access strategy: https://www.lyfegen.com/demo
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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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In December 2023, the U.S. Food and Drug Administration (FDA) approved two groundbreaking gene therapies for sickle cell disease (SCD), offering a new lease on life for individuals battling this severe condition. However, while these therapies bring significant clinical improvements, their cost has emerged as a formidable challenge, particularly for Medicaid, which covers approximately half of the 100,000 individuals in the U.S. with SCD.
The Financial Strain of Sickle Cell Disease on Medicaid
Gene therapy represents a revolutionary treatment for SCD, a condition that has traditionally required ongoing management through therapies like allogeneic hematopoietic stem cell transplants (HSCT). While HSCT offers a potential cure, its use has been limited due to donor availability and high toxicity. Now, gene therapy provides a much-needed alternative, but the steep price tags—approximately $2.29 million per treatment—pose a significant challenge for Medicaid programs across the country.
The latest budget impact analysis updates previous findings on how these high-cost therapies could impact 10 Medicaid plans with the highest prevalence of SCD. The study reveals that even cost-effective treatments with exceptional clinical benefits may be unaffordable for payers, particularly given the expanding Medicaid enrollment and higher-than-expected launch prices for these therapies.
Short-Term Costs vs. Long-Term Savings
For Medicaid plans, the financial challenge of gene therapy is primarily in the upfront, one-time cost of the treatment. The updated model projects that in the first year alone, gene therapy for SCD will result in an average budget impact of $65.8 million per state program, with a per-member per-month (PMPM) cost of $3.11 across the 10-state sample. Although the cost decreases over time—with the PMPM dropping to $2.08 by year five—the initial budgetary strain is a significant concern.
Despite these costs, the long-term benefits of gene therapy are undeniable. By offering a potentially curative solution, gene therapy could avert future medical expenses associated with SCD, such as hospitalizations, pain management, and ongoing treatments. The model conservatively assumes perfect effectiveness and durability, projecting that the therapy would eliminate all future SCD-related healthcare costs for treated patients. While these assumptions may not reflect real-world outcomes, they provide a glimpse into the potential for long-term savings.
Market Diffusion and Budgetary Impact
A critical factor influencing the budget impact is the market diffusion rate—the speed at which patients adopt the new therapy. The analysis assumes an annual diffusion rate of 7%, meaning that a subset of eligible Medicaid enrollees will receive the therapy each year. This rate could vary, influenced by factors such as manufacturing capacity, delivery center availability, and payer policies. Notably, if the diffusion rate falls below 4%, the PMPM cost could remain below the affordability benchmark set by prior high-cost treatments, such as sofosbuvir for hepatitis C, which generated a PMPM cost of $1.89 in 2024 dollars.
The model also reveals that 35% of Medicaid enrollees with SCD are expected to have a severe phenotype, defined by two or more severe pain episodes annually. This percentage is a key driver of cost, as patients with more severe disease are more likely to be eligible for gene therapy.
State Medicaid Plans Face Varying Impacts
The updated analysis highlights significant variability in how different state Medicaid plans will be affected. For example, in Georgia, where SCD prevalence is higher, the projected PMPM cost is $3.92 in the first year, while Florida faces a slightly lower cost of $2.50 PMPM. These variations reflect differences in both disease prevalence and state enrollment levels.
By the fifth year, the PMPM costs across all state programs are expected to decrease, driven by reduced new therapy adoption and the absence of ongoing SCD-related costs for treated patients. However, the affordability challenge remains a pressing concern, particularly in the early years of gene therapy adoption.
Balancing Access with Affordability
Medicaid plans, payers, and policymakers are now tasked with finding ways to balance the promise of gene therapies with their potential financial burden. The affordability challenge could limit patient access, echoing the struggles faced during the rollout of high-cost hepatitis C treatments.
One potential solution is the development of novel payment models, such as annuity-based approaches, which could spread the cost of gene therapy over several years, easing the immediate budgetary impact. Additionally, the Center for Medicare and Medicaid Innovation is exploring alternative payment strategies specifically for gene therapies within Medicaid, aiming to ensure access without jeopardizing the financial sustainability of state programs.
The Role of Technology in Managing Costs
As gene therapies become more prevalent, platforms like Lyfegen can play a key role in helping payers manage the financial complexities associated with these high-cost treatments. Lyfegen’s platform simplifies the process of tracking the economic impact of gene therapies, providing payers and providers with the tools they need to assess real-world outcomes, monitor costs, and adjust strategies accordingly. By leveraging technology, healthcare systems can better navigate the financial risks and ensure that patients continue to benefit from the latest innovations in care.
Unlock smarter budget management strategies with Lyfegen’s powerful tools! The Lyfegen Drug Contracting Simulator helps payers and healthcare providers model the financial impact of high-cost therapies like gene therapy for SCD, optimize payment strategies, and make informed decisions. Coupled with the Lyfegen Library’s extensive database of pricing models, you’ll be equipped to tackle the financial challenges posed by the latest innovations in healthcare.
Act Now – Book a demo of Lyfegen’s platform and discover how we can support your budgeting and contracting needs: https://www.lyfegen.com/demo
References
Meyer, K. B., Kilburg, M. M., Johnson, K. B., & Meyers, M. A. (2024). A budget impact analysis of gene therapy for sickle cell disease: an updated analysis. Blood Advances, 8(17), 4658–4666. https://ashpublications.org/bloodadvances/article/8/17/4658/517069/A-budget-impact-analysis-of-gene-therapy-for-sickle-cell-disease
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Outcome-Based Contracts (OBAs) are set to revolutionize access to high-demand medications by linking drug prices to patient outcomes. Specifically, this model ensures that the cost of medication reflects its real-world effectiveness, thereby encouraging better healthcare and sustainable pharmaceutical spending. As outcome-based healthcare gains momentum, OBAs will further push pharmaceutical companies to focus on developing innovative, effective treatments rather than just boosting sales. GLP-1 drugs, such as Wegovy and Ozempic, which are popular for weight loss, could exemplify this shift.
Challenges in Patient Coverage
Right now, accessing GLP-1 drugs is tough due to their high costs and insurers' hesitance to cover expensive, newer treatments. Additionally, coverage decisions vary, and many employers do not include these medications in their health plans. According to Mercer’s 2025 Survey of Health and Benefits Strategies, only 42% of employers cover obesity medications, and only 3% plan to offer coverage for weight loss drugs. Therefore, employers face a tough balancing act between cost and access, especially with GLP-1 drugs like Zepbound, which costs $1,059.87—20% less than Wegovy but still pricey.
Outcome-based Healthcare: Aligning Costs with Effectiveness
As we move towards outcome-based healthcare the OBA’s that are its foundation address these challenges by tying drug costs to real-world effectiveness. Pharmaceutical companies and healthcare providers start by agreeing on specific patient health outcomes. If the medication meets these benchmarks, pricing reflects its success. If not, the price could be adjusted. Ultimately, this model promotes impactful treatments and makes life-changing medications more accessible. It is especially useful for chronic conditions like obesity, where patient outcomes are crucial measures of success.
Benefits for Healthcare Providers
OBAs also benefit healthcare providers by creating a reliable framework for prescribing new or expensive medications like GLP-1s. Providers can prescribe treatments with confidence, knowing they have a proven track record of success. In addition, this model fosters collaboration between providers and pharmaceutical companies, shifting the focus from sales to patient outcomes. As a result, this could lead to better resource allocation, improved patient satisfaction, and a more effective healthcare system overall (Mercer, 2024).
Impact on Pharmaceutical Companies
For pharmaceutical companies, OBAs drive innovation and accountability. By linking drug pricing to patient outcomes, these agreements push companies to focus on treatments that deliver real, measurable results. This shift compels them to invest in research and development, knowing that successful outcomes can boost both credibility and profits. Furthermore, OBAs not only streamline drug approvals but also offer a competitive advantage in the value-based healthcare market.
The Role of Technology
Technology platforms like Lyfegen can also play a crucial role in making OBAs more efficient. Lyfegen’s technology simplifies the complex process of planning, testing and creating OBA’s, as well as tracking rebates. Lyfegen’s all-in-one platform makes it easier to manage contracts with transparency. As demand for GLP-1 drugs continues to rise, such platforms ensure that access to these treatments is tied to proven success while keeping costs manageable.
In conclusion, OBAs could transform access to high-demand medications by aligning drug pricing with patient outcomes. Not only does this model make expensive treatments like GLP-1 drugs more accessible, but it also promotes responsible pharmaceutical spending. By leveraging platforms like Lyfegen, which simplify the process, OBAs offer a path to more equitable and value-driven healthcare.
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References
“Welcome to brighter.” Mercer, https://www.mercer.com/en-us/.
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In the US, a piece of proposed legislation with major ramifications on pharmaceutical manufacturing passed the House of Representatives, the first step in the law-making process, on September 9th. H.R.8333 - BIOSECURE Act has received bipartisan support and passed the House 306 to 81.
The BioSecure Act alleges that some Chinese biotech companies post a national security threat, due to their affiliation with the Chinese Communist Party and their military or intelligence agencies. The draft bill mentions “military-civil fusion” being a central concern, a procedure by which under certain circumstances, Chinese companies, whether headquartered in China or not, must surrender all company data to the CCP.
Five companies were named as a “biotechnology company of concern” in the bill: BGI Genomics, MGI Tech, Complete Genomics, WuXi AppTec, and WuXi biologics. Companies relying on these providers have until 2032 to change suppliers, exactly the 8 years estimated to be needed to make the switch, according to a survey conducted by the Biotechnology Innovation Organization (BIO) earlier this year. The same survey found that 79% of the 124 biotech companies surveyed had at least one contract or product from a Chinese CDMO/CMO.
It’s expected that Indian and South Korean CDMOs will see greater demand if this bill is signed into law by US President Joe Biden. In that case, there are concerns that pharmaceutical products could rise in price due to supply chain issues or that patients will lose access to important therapies. WuXi AppTec and sister company WuXi Biologics are involved in the manufacture of several approved drugs, including cell and gene therapies. Shares of WuXi AppTec and WuXi Biologics fell 10% and 3.9% respectively on Tuesday, September 10th.
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