ICER: Hero or Villain in the Story of Value-Based Drug Pricing?
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This influential player in the U.S. pharmaceutical sector is changing the dynamics of price negotiations between payers and drug manufacturers. But is ICER helping bring healthcare costs down or contributing to rising drug prices?
Who is ICER?
Over the last decade, a small, Boston-based independent, nonprofit research organization has become a powerful influence over the formulary exclusion decisions and drug prices commercial and government payers will pay. Founded in 2006, The Institute for Clinical and Economic Review (ICER) was relatively unknown before 2014. But after gaining national recognition for an assessment about the cost-effectiveness of a Hepatitis C therapy regime, ICER quickly became a trusted source of data and pharmaceutical economics research.
ICER’s assessments are cited in national policy debate and in pharmaceutical price negotiations between insurers and drug manufacturers. According to ICER, the U.S. Department of Veterans Affairs, some state Medicaid agencies and over 75% of private insurers, pharmacy benefit managers, and self-insuring organizations now use ICER’s drug pricing assessments and resources in their policy decision making.
What does ICER do?
ICER conducts clinical and economic assessments of drug treatments to calculate what it considers a drug’s fair market price. They consider a drug’s value and effectiveness for treating the illness for which it was designed, followed by a budget impact analysis to estimate how much the national health system could save with its suggested cost-effective pricing. Using this data, ICER analyses calculate a suggested drug price for payers where cost-effectiveness aligns with the value of the increased benefit to the patient’s health. ICER says it seeks feedback from all stakeholders—manufacturers, clinicians, payers, patients and families.
How is ICER affecting national drug prices?
A leading pharmaceutical economics expert, Dr. Adam J. Fein of Drug Channels Institute, reports that pharmaceutical list prices rose by up to 15% from 2010 to 2015. During the next five years, up to mid-2020—as ICER rose to national prominence—list price growth dropped to 4.2%.
In 2018, ICON, a leading healthcare industry consultant, conducted a survey about the influence of ICER’s work on drug pricing and national healthcare costs. The ICON survey revealed that ICER’s cost effectiveness metrics and price recommendations are affecting contract negotiations between drug manufacturers and payers and driving drug prices down.
Most payers are no longer willing to accept whatever price drug manufacturers decide to charge. Over a third of the payers in the ICON survey stated it was likely, or extremely likely, that they would ask for a rebate from the drug manufacturer to reduce the cost of a drug to match ICER’s suggested price. In response, manufacturers will increase their drug list price, then offset part of the price increase with larger rebates to payers—this is known as the gross-to-net bubble.
How is ICER affecting access to expensive drug treatments?
Out of the 90 participants ICON surveyed during a pharmaceutical industry webinar, 65% believed ICER had a moderate to significant impact on formulary decisions; ICON’s research also showed that payers who use ICER’s cost-effective pricing were more likely to use strict prior authorization requirements for some drugs to encourage clinicians and patients to use the most cost-effective drug treatments. Critics point to this as one of the harmful consequences of ICER’s work.
What do critics of ICER say?
Some patient advocate groups—with the support of pharmaceutical manufacturers—are concerned that by encouraging payers to exclude less cost-effective but still clinically effective treatments in their formularies, ICER is promoting payer discrimination against some patients who need expensive specialty medications, such as the elderly, people with disabilities, and those living with rare diseases.
Critics such as The Alliance for Aging Research point to data that show ICER’s impact on payer demands for higher rebates are causing increasing out-of-pocket costs for seniors using Part D Medicare benefits. Manufacturers raise their list prices, then meet payer demands for ICER’s suggested drug pricing using the gross-to-net bubble rebates. However, some payers still calculate the co-insurance percentages that patients pay for their prescriptions based on the manufacturer’s full, undiscounted list price.
Lyfegen can help implement value-based drug pricing agreements
Despite the debate about whether ICER is a help or a hinderance in the work of healthcare cost containment and better patient access, ICER’s influence will probably continue to grow as value-based contracts and risk-sharing agreements become more common. Lyfegen’s value-based contracting platform operationalizes and manages these complex drug pricing payment arrangements by seamlessly capturing and analyzing data.
Lyfegen’s software can help your organization implement any value-based contract, covering multiple therapeutic areas, with public or private payers. Contact us to learn more about our platform and to book a demo.
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Families forced to hold a fundraiser because their child’s healthcare system won’t save his life.
Recently, the news has once again been covering a family that is struggling to cover the cost of the most expensive drug in America for their son, Devdan. The insurer refused coverage of the treatment for his rare disease, totaling $2.125 million.
Devdan was born with Spinal Muscle Atrophy (SMA). SMA damages the nerve cells in the brain and spinal cord, causing progressive muscle weakness and problems breathing, speaking, swallowing, and walking. Zolgensma’s onetime gene therapy treats SMA and has earned the title of the most expensive drug in America.
It is currently Devdan’s only hope for a normal life. In this case, to save their child’s health and future, the parent’s initiated a fundraiser through Ray of Hope Foundation.
Most of us probably don’t consider what or how hospitals pay for their supplies. When we pay our medical insurance premiums, we buy a plan and think we’re covered in case of a medical emergency. But what many families of children with rare disease have learned, that’s not always the case. Rare diseases aren’t funded the same way common medical conditions are paid for. There aren’t enough patients to warrant extensive research and treatment developments. Consequently, medical care is often unconventional. As a result of these novel treatments, patients with rare disease often receive Surprise Medical Billing or are denied coverage altogether.
Value Based Healthcare (VBHC) Saves Lives
Medications and treatments that deviate from the routine can be a financial disaster for hospitals, families, care providers, and health systems. And organizations with a strong commitment to value-based healthcare have seen sustainable gains. In this case, had Devdan’s medical facility operated under a value-based healthcare reimbursement model, this life-saving treatment would have been available and the critical care for this child could have begun without delay.
Calculating value-based reimbursements measures numerous points of quality and the overall health of a population. Unlike a fee-for-service model, value-based healthcare providers must report data to payers and demonstrate improvement. The VBHC model has many advantages, including improved patient satisfaction, a reduction in healthcare delivery costs, and better health for the patient populations being served.
Better management of financial challenges with Lyfegen
The VBHC model has many advantages, including improved patient satisfaction, a reduction in healthcare delivery costs, and better health for the patient populations being served. Luckily, Devdan’s Ray of Hope fundraising effort has achieved the needed target of $2.86M. More than 29’000 people came together to raise this enormous amount in such a short period of time to give Devdan a second chance at life.
This unfortunate scenario is common for those dealing with rare disease, and those in need of extraordinary medical care. Had Devdan’s insurance participated in a value-based program, the necessary medicine could have been provided for with no delay in treatment. As the health care market adjusts to the pandemic and prepares for the future, leaders must decide whether to accelerate their participation in value-based healthcare to meet the clinical and financial challenges that will remain for years to come.
To learn more about Lyfegen and request a free demo, contact us today.
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Manufacturers, payers, and health systems disagree on how to assess the value of new, high-cost treatments such as cell and gene therapies. These stakeholders see a solution in outcome-based drug pricing agreements.
Girisha Fernando, CEO of Lyfegen, was recently invited to take part in a roundtable discussion about cell and gene therapies (CGTs), hosted by the global consulting firm, Oliver Wyman. Over 20 industry leaders, payers, and third-party solution providers were in attendance.
Oliver Wyman released a white paper that summarizes the insights, challenges, and opportunities uncovered during the discussion. A major area of concern among the participants is preparing and equipping payers and health systems with the means to assess the value and health benefits of new, high-cost CGTs.
Outcome-based contracting is the future for cell and gene therapies
According to marketresearch.com, the global CGTs market—valued just short of USD $5 billion in 2021—is forecast to reach almost USD $37 billion by 2027. In anticipation of an estimated total of 60 CGTs available on the market by the end of the decade, industry and health system stakeholders recognize the need to move towards contracting that includes an outcome-based drug pricing component.
Learn more about Pharmaceutical Forecasting Software
The roundtable participants agreed that using outcome-based contracts (OBCs) for CGTs is a critical lever for ensuring patient access to innovative therapies. OBCs can reward manufacturers for new drug development while addressing the payers’ concerns about clinical effectiveness and management of financial risk.
Why outcome-based contracting is best for cell and gene therapies
The Oliver Wyman white paper lists a few reasons CGTs are well suited for value-based drug pricing through outcome-based contracting, including:
• A lack of real-world clinical evidence about the therapy when first introduced to market
• Uncertainty about the product’s value proposition
• High perceived cost versus the current standard of care
Fernando adds an additional perspective to the conversation: “Another underlying need for OBCs and underlying innovative payment models is the fact that the Pharma’s business model is changed with CGTs. Since they promise significant patient benefit, and in many cases even cure, this cure is being priced into one price. This contrasts with the previous pharma model of gaining continuous revenue by supplying continuous treatments over several cycles.”
Challenges to implementation of outcome-based contracts
At present, several challenges hinder the widespread adoption of outcome-based agreements. Oliver Wyman’s analyses point to difficulties such as agreement on a starting price, deciding how to measure patient outcomes, and choosing appropriate follow-up timelines.
Another one of the fundamental difficulties in executing OBCs is capturing quality real-world data. There was consensus among the roundtable participants about the need to collaborate to build innovative multi-stakeholder data infrastructure and systems that support real-world evidence collection about patient outcomes. Current attempts to build performance data gathering into existing data systems often lead to increased fragmentation of data across different systems that are not interoperable.
For many reasons, the real-world data that is available is often incomplete or of poor quality. All industry and health system stakeholders want to balance transparency with safeguarding proprietary information. Healthcare providers don’t see data collection as their priority; they must be incentivized or compensated for taking on this additional administrative burden. And patients asked to self-report outcomes want to feel in control of how and with whom they share their health outcomes.
Collecting quality patient data
Empowering patients as decision-makers in their care encourages them to report their treatment results. Regarding patient self-reporting of health outcomes, Fernando poses some additional considerations:
“Should patients receiving a CGT also have a “responsibility” in terms of data reporting etc. as health systems commit to curing these patients? This would be needed to track long-term outcomes of patients, as well as provide a positive effect on evidence & learnings.”
Fernando also sees more patient-centric opportunities for growth: “In addition to the CGT, what other kinds of services should be built around these patients to improve patient health outcomes?”
A supportive ecosystem for outcome-based contracts
The roundtable identified three key principles for advancing the data infrastructure and ecosystem needed for executing OBC: data ownership, data interoperability, and data access and security. They uplifted the role of third-party innovators and solution providers like Lyfegen, whose value-based contracting software addresses these difficult IT issues and simplifies the execution of complex pricing models. By facilitating the shift away from volume-based and fee-for-service healthcare to value-based healthcare, Lyfegen increases affordability and access to high-cost healthcare treatments like CGTs.
The Lyfegen Platform
Lyfegen’s software platform helps 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 in value-based contracts.
To learn more about the Lyfegen Platform and software solutions, contact us to book a demo.
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Healthcare payers and insurance companies are under pressure to fight rising drug prices in the U.S. Payers have the difficult task of figuring out if a manufacturer’s proposed wholesale price for a new drug is justified. Value-based purchasing agreements facilitate the data sharing needed to determine a drug’s fair price.
U.S. drug expenditures are among the highest in the world
It’s well-documented that the U.S. spends more on prescription drugs than other high-income countries. After adjusting for rebates and discounts, U.S. drug prices are almost 200% of prices in other comparable countries, according to a 2021 Rand Corporation report.
High drug prices in the U.S. translate to a per capita expenditure almost double what consumers and payers in other developed countries are paying. Peterson-KFF’s Health System Tracker shows that in 2019, U.S. payers and consumers spent a yearly average of $1,126 per capita for prescription medications, with $963 covered by payers and $164 in patient out-of-pocket costs. In other high-income countries, average annual drug expenditures were $552 per capita, with $88 in yearly out-of-pocket costs for patients.
U.S. drug expenditures keep rising
The American Society of Health-System Pharmacists reports that in 2021 overall pharmaceutical expenditures in the U.S. grew by 7.7% over the previous year’s costs; and for 2022, they predict another 4-6% increase in drug spending.
According to the healthcare consulting firm IQVIA, a total of 6.3 billion prescriptions were filled in the U.S. in 2020. Around 90% of those prescriptions were filled using lower-priced generic drugs. Lower-priced generic and biosimilar drugs have helped slow the rise of the annual national drug expenditures, however these account for only around 20% of total drug costs.
Increased use of pharmaceuticals (especially generics), drug price hikes, and high-cost new drugs coming to the market are contributing to the rise in overall drug expenditures. In particular, new, brand-name specialty drugs for conditions such as diabetes, cancer, autoimmune, and other rare diseases are bringing up the average of drug prices.
The use of specialty drugs increased from 27% of total U.S. drug spending in 2010 to 53% in 2020, according to IQVIA. They forecast up to 55 new pharmaceutical products per year will be brought to market between 2020 and 2025. Pharmaceutical forecasting software can help you stay on top of these changes and plan effectively.
Payers will have to decide whether to cover the cost of these new products and at what price. New-to-market specialty drugs are excellent candidates for value-based purchasing agreements.
Value-based purchasing contracts provide the data that reveal if a drug is worth its price
Payers have the difficult task of figuring out if a manufacturer’s proposed wholesale price for a new drug is justified. They need to protect their bottom line by minimizing the risk of paying for ineffective, over-priced drugs. Private insurance plans, Medicaid, and the Veterans Administration often negotiate prices for new treatments with pharmaceutical companies without real-world data to demonstrate the drug’s clinical and cost-effectiveness compared to other treatments for the same health condition.
If their product is eligible, some pharmaceutical manufacturers conduct fast-track clinical trials for FDA approval using surrogate endpoint measures to show that a new drug is safe and more effective than a placebo. But these trials provide limited data and they aren’t the comprehensive comparative effectiveness review (CER) needed for determining the value and fair price for the drug. Independent research firms, such as the Institute for Clinical and Economic Review (ICER) and the Patient-Centered Outcomes Research Institute (PCORI), conduct CERs that provide insight into pricing for drug categories, but they don’t research every new drug coming onto the market.
Value-based purchasing agreements fill this knowledge gap by collecting the real-world evidence of a new drug’s clinical value. The data sharing among stakeholders that comes with these outcome-based contracts gives a fuller picture of the drug’s impact on patient health outcomes.
Value-based purchasing contracts strengthen stakeholder partnerships
While acknowledging that the future of healthcare is moving from fee-for-service to value-based healthcare, providers and payers have been slow to adopt value-based contracting. Operationalizing these agreements is complex. They consume large amounts of time and financial resources at start-up, not to mention the trust, cooperation, and commitment required from stakeholders.
It can be quite difficult to agree on a drug price that satisfies all stakeholders in terms of evidence-based clinical value and comparative competitor pricing. What and who determines a drug’s value? Value-based purchasing arrangements align the stakeholders’ metrics for measuring value to determine a fair price for a drug. Over time, this new level of transparency and cooperation can foster greater trust between contract partners and help break down the barriers blocking the transition out of fee-for-service to value-based healthcare.
The Lyfegen Platform
Manufacturers, payers, and providers all possess part of the data about a drug’s value in their databases. In the past, automated tools to safely collect, centralize, and analyze stakeholder data were non-existent. Thanks to innovations in artificial intelligence, new software platforms for value-based contracts can facilitate efficient coordination among the stakeholders to achieve a high level of secure data sharing.
Lyfegen’s software platform helps healthcare insurances, pharma and medtech companies implement and scale value-based purchasing contracts with greater efficiency and transparency. The Lyfegen Platform collects real-world data and uses intelligent algorithms to provide valuable insights on drug performance and cost in value-based contracts. By enabling the shift away from volume-based and fee-for-service healthcare to value-based healthcare, Lyfegen increases access to healthcare treatments and their affordability.
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How the U.S. Institute for Clinical and Economic Review is reshaping market access
In the U.S., comparative clinical effectiveness analyses are gaining traction as ways to inform coverage, pricing, and reimbursement of pharmaceuticals by both public and commercial payers. And, while use of cost-effectiveness data to inform coverage decisions is prohibited in the public sector (Medicare and Medicaid) it can be used in the commercial sector.
A recently released Xcenda analysis shows that 70% of U.S. commercial payers identified comparative clinical- and cost-effectiveness evidence in the Institute for Clinical and Economic Review’s (ICER) published reviews as the most important items in the reports with respect to informing coverage and reimbursement decisions.
Additionally, 50% of payers said that long-term cost-effectiveness – for example, cost-per-Quality-Adjusted-Life-Year – is “very impactful” in informing the decision-making process. And, as the figure below shows, 52% used results from an ICER assessment in pricing negotiations while 38% implemented a prior authorization protocol based on an ICER evaluation.
Source: Xcenda, International Society for Health Economics and Outcomes Research (ISPOR) annual meeting presentation, May 2022
Further bolstering the Xcenda analysis, an Evidera study from late 2019 suggested that ICER can influence value-based benchmark prices. The use of value-based pricing is increasing in the U.S. And, where appropriate, ICER favors the use of value-based contracting to align price and value. In fact, in certain instances such as gene therapies, ICER believes that such treatments can only be viewed as being cost-effective if value-based contracting is applied. 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.
To illustrate the impact ICER assessments can have with respect to pricing and reimbursement decisions, let’s consider ICER’s evaluation of PCSK9 inhibitors – indicated for individuals with inadequately treated levels of LDL-cholesterol. In 2016, two PCSK9 inhibitors were approved by the Food and Drug Administration: Alirocumab (Praluent) and evolocumab (Repatha). ICER reviewed the drugs’ clinical- and cost-effectiveness and suggested the list prices needed to be substantially reduced to make the treatments cost-effective.
What ensued was the establishment of several ICER-payer partnerships that led to formulary exclusions of these therapies and subsequent “price wars” as manufacturers of Praluent and Repatha drastically lowered their list prices to remain competitive.
Broadly, cardiovascular disease represents a competitive market with an established standard of care that includes numerous therapeutic options for most patients. Here, payers were able to leverage ICER’s assessment of the PCSK9 inhibitors in negotiations with drug manufacturers. In turn, this led, for example, to one manufacturer lowering the wholesale acquisition cost of Praluent to $5,850, down from $14,600.
In other therapeutic categories with much less competition, ICER’s impact is less clear-cut. For example, in a therapeutic area such as spinal muscular atrophy, characterized by low prevalence, high mortality rates, and lack of effective treatments, ICER’s cost-effectiveness analysis either did not influence payer coverage - as with the drug Spinraza (nusinersen) - or may have been leveraged by the manufacturer to push for wider acceptance among payers -as with Zolgensma (onasemnogene abeparvovec).
In 2019, ICER published its final recommendations on spinal muscular atrophy therapies. To meet an ICER-imposed cost-effectiveness threshold of up to $150,000 per life year gained, Spinraza would need to be priced at a maximum of $145,000 for the first year of treatment and $72,000 annually for subsequent years. This was considerably lower than Spinraza’s list price of $750,000 for the first year and $375,000 annually for subsequent years. ICER also recommended that Zolgensma could be priced at up to $2.1 million per treatment to be considered cost-effective, which turned out to be in line with its list price of $2.125 million at launch.
Interestingly, although ICER’s analysis found that Zolgensma was cost-effective while Spinraza was not, payer coverage for both drugs followed a similar trend over time, with payers restricting access in the initial periods immediately after launch and later relaxing these criteria.
The shift in coverage criteria could be due to an initial reflex response that payers have to restrict access to extremely expensive medications, followed by a loosening of criteria. Historically, this has been the case. Subsequently, after acknowledging the dramatic clinical benefits that Spinraza and Zolgensma have demonstrated in clinical trials for treating a disease with no other therapeutic options, payers relent, if you will. Also, in the case of Zolgensma, ICER’s evaluation may have led to a further easing of payer restrictions.
Of course, cost-effectiveness analyses, such as the ones published by ICER, must invariably be adapted for local use. Context matters, nationally, but also intra-nationally, in different jurisdictions and sub-markets. Further challenges include local or federal (national) regulations which may prevent the use of cost-effectiveness analyses under certain circumstances; stakeholders’ resistance to adopting such analyses or be bound by their findings; and the general lack of available (and appropriate) cost-effectiveness data.
Nevertheless, there is a consistent trend which points to the growing influence of ICER evaluations on payer decision making, specifically with respect to drug pricing and reimbursement. Clinical- and cost-effectiveness data can be used to determine whether to cover a technology, inform the use of prior authorization or other conditions of reimbursement, and serve as a benchmark for price negotiations with manufacturers.
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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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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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.”
Learn more about Pharmaceutical Healthcare Solution
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, 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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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 Denisa Filip to our tech team at Lyfegen as a Full Stack Developer. Denisa brings a wealth of experience and enthusiasm, and we sat down with her to learn more about her background, passions, and what excites her about joining Lyfegen.
Quick introduction – tell us a bit about yourself! Where are you from and what’s your educational and professional background?
I’m from the west of Romania and have been into informatics since high school. However, my real passion for technology started once I joined a robotics team where I was able to apply everything I had learned in a hands-on environment. I went on to earn a degree in Computer Science and began my career in cybersecurity. Along the way, I gained diverse experiences through volunteering and working with startups. Eventually, I found myself enjoying building websites more, which I now focus on.
What excites you about your job?
What excites me most about my role as a developer at Lyfegen is the opportunity to create new functionalities on our platform that truly end up helping those in need. I'm thrilled to be part of a company that shares my vision and is dedicated to making treatments more accessible to people. It's incredibly fulfilling to know that the work I do contributes to such a meaningful cause.
Why did you decide to join Lyfegen?
I was looking for a dynamic startup environment where I could grow and contribute to its evolution. I wanted to use my skills to leave a positive impact on the community, and I saw that same passion in the founders and team at Lyfegen. Their dedication to creating important change resonated with me and motivated me to be part of their mission of creating a lot of value.
What is something you want to learn or improve in the next 12 months?
I wish to improve my development skills to create amazing user experiences on Lyfegen’s platform while also exploring new relevant technologies. Additionally, I want to focus on my interpersonal abilities within the team, allowing me to contribute more effectively.
How will your know-how help improve our customers’ experience of Lyfegen solutions?
In Lyfegen's dynamic startup environment, where legislations and requirements can change rapidly, agility is key. We must be quick to launch innovative and reliable solutions on the market, and my expertise in developing intricate products helps us to achieve this by delivering seamless and intuitive features. Also, I am very detail-oriented and try to anticipate various edge cases within our platform's logic, ensuring that many potential errors are addressed before they can reach our clients.
Let’s get personal: What are your favorite things to do in your free time?
I’ve recently developed a passion for graphic design, often working on various posters and creative projects. I also love cooking, experimenting with new recipes, or crafting some of my own. Otherwise, I enjoy traveling and I’m trying to explore more countries in the future.
Is there anything else you are looking forward to outside of work in the next few months?
I’m eager to dive deeper into my graphic design hobby, exploring more challenging projects and learning more about it. I’m also looking forward to an upcoming road trip through Greece where I plan to explore the stunning landscapes and rich culture.
We are excited to see Denisa grow and thrive in her role at Lyfegen. Welcome to the team, Denisa!
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Fünf Männer aus der Region wollen die Gesundheitsbranche aufmischen. Im 2018 wurden sie von der Plattform «Innovation Basel» für ihre visionäre Idee nominiert: Eine digitale Plattform, die eine Kombination aus Blockchain und Cloud verwendet, um faire Medikamentenpreise zwischen Herstellern und Versicherungen auszuhandeln. Was heisst das aber und was ist dabei so visionär?
(Bild: zVg) Das Lyfegen Team: Diese fünf Männer haben eine Vision und eine Mission. Die Idee liess Girisha Fernando nicht mehr los: Der 29-jährige Basler wollte nach neun Jahren bei der Roche im Market Access, Pricing und IT unbedingt «etwas noch Spannenderes, Revolutionäres machen», wodurch Patienten im Dschungel des Gesundheitswesens geholfen wird. Aber es sollte dabei auch für Pharmaunternehmen und Versicherer eine Win-Win-Situation entstehen.
Zusammen mit seinen Mitstreitern Leon Rebolledo, Michel Mohler und Nico Mros gründete er 2018 «Lyfegen» und entwickelte eine bahnbrechende Idee: Eine auf Blockchain und Cloud basierte Software Lösung, die es Versicherern und Herstellern von Medikamenten erlaubt faire Preise anhand deren Wirksamkeit für den einzelnen Patienten auszuhandeln.
Faire Preise bedeuten unter anderem auch, dass die Vergütung dieser Medikamente auf der Wirkung des Medikaments basiert. Wenn ein Medikament bei einem Patienten besser wirkt, dann wird ein Preis A bezahlt. Wenn ein Medikament bei einem anderen nicht so gut anschlägt, dann wird Preis B vom Versicherer an den Hersteller fällig oder sogar nichts bezahlt. Unser Tool ermöglicht genau diese faire, wirkungsorientierte Preisgestaltung, was sich auch Value-based Healthcare nennt. So ein Tool gibt es auf der ganzen Welt bisher nicht. Name Surname
Position, Copmany
Fachleute sprechen hierbei von «Wertbasierter Gesundheitsversorgung». Dieses Thema ist aktueller denn je, auch in der Schweiz, in der steigende Behandlungs- und Medikamentenpreise zu höheren Kosten für die Bevölkerung führen. Es müssen neue, nachhaltige Modelle eingeführt werden, um die Kostenexplosion im Gesundheitswesen aufzuhalten.
Warum aber ist so ein Tool wertvoll? «Weil unser Tool Daten sicher sammelt, analysiert und dann den jeweiligen Partnern, sei es ein Versicherer oder ein Hersteller wie Pharmaunternehmen, die Daten anonym, automatisiert und gleichzeitig zuspielt.» Dies geschieht mit Hilfe der Blockchain (eine dezentralisierte Form der Datenverarbeitung und -sicherung, die beispielsweise Geldeinheiten, Wertpapiere, Besitz- oder Grundrechte verwaltet, siehe Erklärung in der Infobox), ganz ohne Kryptowährung, betonen die fünf innovativen Köpfe.
(Bilder: PEXELS) Im Gesundheitswesen explodieren die Kosten. Eine revolutionäre Idee könnte dieser Entwicklung entgegen wirken.
Die Idee hat schon für viel Wirbel in der «Szene» gesorgt. Und sie gehen mit ihrer Idee aufs Ganze: «Wir haben schon 750’000 CHF von einer Gruppe von Basler Business Angels erhalten», sagen die Lyfegen-Gründer. Diese Business Angels seien selbst erfolgreiche Unternehmer. Namen dürfe man leider keine bekannt geben. Zudem müsse man zu 100 Prozent hinter einer Innovation, einer Vision oder einer Idee stehen, die der Gesellschaft helfen könne, betonen sie. Fernando: «Ich bin fest davon überzeugt, dass nicht nur unsere Lösung, sondern auch die Denkprozesse, die wir bei unseren Kunden anregen, die Implementierung einer wertbasierten Gesundheitsversorgung vorantreibt. Konzept und Lösung sind innovativ.»
Vertrauen und Transparenz zwischen Ärzten und Patienten ist immens wichtig. Darauf basiert auch das Konzept des Value-based Healthcare.
Zwar sei man bei Lyfegen sehr technisch veranlagt, jedoch steht der Kundennutzen und der so genannten «Impact» für alle Parteien im Vordergrund. Also auch für die Versicherten und für das gesamte Gesundheitswesen. «Unsere Lösung trägt dazu bei, Patienten Zugang zu innovativen Behandlungen und der bestmöglichen Gesundheitsversorgung zu ermöglichen. Wir wollen Leben retten. Punkt», betont CTO Leon Reborello. Girisha Fernando kann aus eigener Erfahrung berichten: «Mein Grossvater hatte Prostatakrebs und die Ärzte sagten, dass es Medikamente gibt um seine Lebensdauer zu verlängern. Aber die Versicherung wollte aus Kostengründen nicht für das Medikament bezahlen. Dies muss aufhören – durch wertbasierte Vergütung würden die besten und innovativsten Medikamente für Patienten und Ärzte zugänglich. Mit unserer Lösung tragen wir dazu bei, dies zu verwirklichen.»
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Introduction
The UK is taking critical steps to standardize the evaluation of AI technologies in healthcare. Last year, the National Institute for Health and Care Excellence (NICE) conducted a systematic review of health economic evaluation (HEE) studies on AI-based technologies, revealing variability in study quality. To address this, NICE introduced CHEERS-AI (Consolidated Health Economic Evaluation Reporting Standards for Interventions that Use Artificial Intelligence), a set of standards aimed at study authors and reviewers. Additionally, the UK Government has announced initiatives to boost exports, benefiting industries like pharmaceuticals by removing trade barriers, with a particular focus on entering the Brazilian market.
Key Takeaways for Pharma and AI Developers
1. CHEERS-AI Standards for Consistent AI Evaluation
• What’s Changing: The CHEERS-AI standards, announced by NICE, provide a framework to improve the quality and consistency of economic evaluations for AI-based healthcare technologies. By addressing gaps in reporting and methodology, NICE aims to make these evaluations more reliable, which is essential for determining the cost-effectiveness of AI solutions in healthcare.
• Impact: For AI developers and pharmaceutical companies, CHEERS-AI sets clearer expectations for the economic evaluation of AI products. A standardized approach facilitates more consistent assessments and could expedite the integration of effective AI technologies into healthcare settings. This initiative also ensures that AI innovations meet rigorous health economic standards, which could build trust among stakeholders and speed up adoption.
2. Removing Trade Barriers for Pharmaceutical Exports
• What’s Changing: The UK Government’s plan to eliminate certain trade barriers is expected to enhance export opportunities across several industries, with a focus on easing access to Brazil’s pharmaceutical market. This initiative includes a £2.3 million fund to support trade growth, with an anticipated boost of £5 billion over the next five years. For the pharmaceutical industry, this includes efforts to improve Brazil’s drug evaluation processes, particularly for cancer treatments.
• Impact: For UK pharmaceutical companies, the removal of trade barriers presents an opportunity to expand into Brazil—a significant and emerging market. Streamlined access to Brazil could lead to increased revenue and greater market diversity. Moreover, improving Brazil’s evaluation standards for cancer drugs aligns with the global shift toward ensuring drugs meet consistent, evidence-based criteria, promoting patient access to high-quality therapies.
Conclusion
The UK’s efforts to standardize the economic evaluation of AI technologies in healthcare and remove international trade barriers represent a proactive approach to fostering innovation and expanding market access. NICE’s CHEERS-AI standards provide the healthcare industry with a reliable framework for assessing AI interventions, setting a high standard for future health economic evaluations. Additionally, the government’s trade initiatives offer UK pharmaceutical companies promising avenues for growth in markets like Brazil. Together, these measures underscore the UK’s commitment to advancing healthcare technologies and supporting the global reach of its pharmaceutical industry.
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Introduction
Italy’s recent healthcare reform introduces a transformative approach to tackling longstanding challenges such as healthcare workforce shortages, regional disparities, and the modernization of infrastructure. As Italy prepares for these changes, pharmaceutical companies, payers, and other stakeholders will need to adapt their strategies for market access and contracting. Lyfegen’s Agreements Library and Drug Contracting Simulator provide essential tools to navigate these evolving demands with precision and efficiency.
Key Takeaways for Pharma and Payers
1. Workforce Expansion and Regional Equity
• What’s Changing: The reform aims to attract healthcare professionals to underserved regions and improve patient access across Italy.
• Impact: Pharma and payers will likely see more consistent healthcare delivery across Italy, leading to greater access to therapies. This broader market reach emphasizes the need for adaptable, data-driven contracting models.
2. Updated Training and Enhanced Medical Infrastructure
• What’s Changing: Italy’s healthcare workforce will benefit from enhanced training and infrastructure improvements, which could accelerate the adoption of innovative therapies.
• Impact: Pharma companies may experience streamlined pathways for introducing new treatments, while payers will benefit from a more robust healthcare system capable of supporting outcome-based agreements.
3. Digital Transformation and Outcome-Based Metrics
• What’s Changing: Emphasis on digital health infrastructure and outcome-based measures will create a more transparent and efficient healthcare environment, particularly for high-cost therapies.
• Impact: This focus on measurable outcomes provides pharma and payers with an opportunity to adopt innovative contracts based on real-world evidence, ensuring alignment with healthcare goals while managing financial risk.
How Lyfegen’s Solutions Can Support Your Strategy
1. Agreements Library: The world’s largest digital repository of drug pricing agreements, the Agreements Library offers over 6,000 public agreements and 20 unique pricing models from 33 countries. With data on more than 550 drugs and access to historical pricing trends, pharma and payers can confidently explore and tailor pricing agreements to the specific demands of Italy’s regions, ensuring that new market strategies meet regulatory requirements and regional healthcare needs.
2. Drug Contracting Simulator: The Drug Contracting Simulator enables teams to create simulations for various pricing models, from value-based to outcome-based. With the ability to run real-world scenarios and compare results, stakeholders can craft business cases that reflect real-world complexities and financial outcomes. This empowers teams to make informed contracting decisions, achieve faster negotiations, and support Italy’s focus on sustainable, transparent healthcare.
Conclusion
Italy’s healthcare reform marks a critical step toward a more equitable and efficient healthcare system. For pharmaceutical companies, payers, and other healthcare players, this shift opens doors to new contracting possibilities and requires a deep understanding of innovative market access models. Lyfegen’s Agreements Library and Drug Contracting Simulator offer the tools needed to stay competitive, adapt to regulatory shifts, and deliver patient-centric solutions that align with Italy’s healthcare goals.
Book your demo today to see how the right tools can transform your approach under this new reform: https://www.lyfegen.com/demo
Sources
• Anaao Assomed. (2023). Healthcare reform in Italy: Key changes and impacts on the medical workforce. Retrieved from https://www.anaao.it/content.php?cont=41425
• Quotidiano Sanità. (2023). Italy’s healthcare reform: Implications for science and pharmaceuticals. Retrieved from https://www.quotidianosanita.it/scienza-e-farmaci/articolo.php?articolo_id=125281
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Gene therapies are redefining modern healthcare, offering the potential to address the root causes of genetic disorders through targeted treatment rather than symptom management. For patients, this represents a profound improvement in quality of life, while for payers and pharmaceutical companies, gene therapies introduce new challenges in contract structuring, reimbursement, and financial planning. In this blog, we’ll explore how gene therapies are reshaping patient outcomes, impacting payer expectations, and how Lyfegen’s solutions, such as the Agreements Library and Drug Contracting Simulator, are enabling pharma and payers to navigate this evolving landscape.
A New Horizon for Patient Outcomes with Gene Therapies
Gene therapies bring transformative potential to patient care by addressing the underlying genetic causes of diseases. Unlike traditional therapies that require ongoing treatment, many gene therapies promise long-lasting effects from a single intervention. This shift enables patients to move away from chronic management, experiencing a better quality of life, fewer medical interventions, and improved long-term health.
Why It Matters: For patients with rare genetic conditions, gene therapies offer a new chance at health. However, the high upfront costs and uncertain long-term efficacy make it challenging for payers to determine optimal reimbursement models. Balancing patient access with financial sustainability is crucial as healthcare systems adjust to the realities of high-cost gene therapies.
Payer and Pharma Contracting: Managing Uncertainty with Precision
With the high cost of gene therapies, payers and pharmaceutical companies face increased pressure to implement contracts that account for uncertain outcomes and long-term impact. Traditional pricing models often fall short in accommodating these complexities. Today, payers need new contracting frameworks that incorporate clinical and financial outcomes over extended timeframes, while pharma companies seek efficient ways to communicate the value and manage the financial implications of these therapies.
Shifting Expectations in Payer-Pharma Relations: To mitigate risk, payers and pharma companies are exploring innovative drug contracting models that tie payment to therapeutic outcomes. However, implementing such models requires robust data, effective scenario planning, and tools that support transparent, collaborative processes across stakeholders.
Lyfegen’s Role in Optimizing Drug Contracting for Gene Therapies
To address the complexities of gene therapy contracts, Lyfegen offers tailored tools that support payers and pharma companies through every stage of the contracting process. Our Agreements Library and Drug Contracting Simulator streamline research, analysis, and contract execution, allowing stakeholders to engage in informed, data-driven decision-making.
1. The Lyfegen Agreements Library: As the world’s largest digital repository of drug pricing agreements, the Lyfegen Library gives users access to over 6,000 public agreements and 20 unique pricing models.
• Accelerate Effective Contracting: With a comprehensive database covering over 550 drugs and real-world agreements from 33 countries, payers and pharma teams can find, compare, and analyze pricing models that meet specific market and therapeutic needs.
• Support Pragmatic Contracting: By exploring data from more than 150 drug manufacturers, users can identify successful contracting models and structures that match the challenges of gene therapies. This ensures informed choices that support sustainable access to innovative treatments.
2. Lyfegen Drug Contracting Simulator: Our simulator enables pharma and payer teams to model various drug pricing scenarios, providing real-time insights to drive negotiations.
• Accelerate Negotiations with Real-World Simulations: The simulator allows users to run multiple pricing models, delivering scenario-based insights that reflect real-world financial implications. This helps pharma and payers create compelling business cases and select pricing models that suit both patient needs and budget constraints.
• Improve Collaboration Across Teams: With flexible, secure access, the Drug Contracting Simulator enables local and global teams to work collaboratively. Users can save and share simulations, compare scenarios, and make evidence-based decisions quickly.
By equipping stakeholders with essential tools for research and analysis, Lyfegen’s solutions reduce the complexities of payer-pharma contracting, allowing stakeholders to navigate the high stakes of gene therapy reimbursement effectively.
Shaping the Future of Gene Therapy Access with Lyfegen
Gene therapies represent a future of precision medicine and improved patient outcomes. Yet, making this future accessible requires innovative approaches to contracting and reimbursement. By leveraging Lyfegen’s solutions, payers and pharma companies can structure contracts that maximize patient access to these therapies while managing financial risk.
Lyfegen is committed to supporting stakeholders as they navigate the challenges of gene therapies, providing solutions that bring real-world data, evidence-based simulations, and efficient contracting processes to the forefront. With the Lyfegen Agreements Library and Drug Contracting Simulator, payers and pharmaceutical teams have the tools they need to secure the future of gene therapies in a way that’s both financially sustainable and patient-centered.
To explore how Lyfegen’s Agreements Library and Drug Contracting Simulator can support your contracting needs for gene therapies, connect with our team or schedule a demo today.
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With rising healthcare costs around the world, value-based care (VBC) is a paradigm shift poised to make healthcare more accessible and affordable. It’s a departure from the traditional fee-for-service (FFS) model, which pays providers each time they perform a service. In this type of care model, providers are rewarded for the volume of care they provide, rather than the quality.
Value-based care shifts the priority of healthcare to patient wellbeing and patient centeredness. Value-based care agreements incentivize healthcare stakeholders to achieve better outcomes, and may even penalize excessive spending or unnecessary procedures.
There are many approaches to providing and paying for value-based care, and they will be the subject of this article. Let’s take a broad look at what VBC is, its benefits, its challenges, and future directions.
Why value-based care is needed
Healthcare costs are rising across the globe, and patients are bearing the brunt of it, with out-of-pocket healthcare costs rising faster than costs to insurers. Drugs are also becoming more expensive, and insurers and employers are concerned about high-cost claims. Many insurers are refusing to cover expensive treatments, like cell and gene therapies, or GLP-1 agonists.
Although the fee-for-service model is still important, value-based care can fill the gaps to bring medicines to patients faster. Using cell and gene therapies as an example, VBC could prevent patients like Forrest VanPatten from dying during the process of jumping from insurer to insurer, hoping to find one that will cover the treatment.
Alternative payment models (ABMs), a core element in the delivery of VBC, help these therapies get to market faster, by lowering the financial burden of expensive therapies. This could include installment payments, among several types of value-based contracts.
Although pharmaceutical companies continue to improve patient outcomes by developing more effective medicines, healthcare costs include more than the price of the drugs. The total cost of care must also be managed and requires a close evaluation of how care is delivered to the patient.
Ultimately, value-based care is a strategy to deliver a better healthcare experience to the patient while utilizing resources more effectively. It is feasible to reward healthcare practitioners for improving patient health, whether it be keeping them out of the hospital, reducing their reliance on medication, or becoming completely disease-free. But there are many challenges in implementing these models, as we’ll discuss.
The types of value-based care
There are many forms of value-based care, and different terms are used interchangeably. Use the glossary table below while reading this article to better understand.
VBC can involve the following:
There are many ways medicine and care can be delivered to people in ways that support better outcomes. Let’s summarize the models above.
Effective care delivery
The accountable care organization (ACO) is a group of clinical entities and providers that in synchronization, aim to deliver efficient and cost-effective healthcare to patients. If the efforts are successful, saved costs can be distributed, providing an incentive to avoid unnecessary procedures. A key component of ACOs is that financial responsibility lies on caregivers. ACOs were a central component of the Affordable Care Act in the United States, and generally describe the American healthcare system. However in several European countries, similar models providing integrative care do exist.
This type of integrated care model may still rely on the fee-for-service model, but aim to reduce the volume of care.
Risk-sharing agreements
Several value-based drug pricing agreements foster risk-sharing between the manufacturer of the drug and the payer. The following are examples:
Many of the above terms overlap with each other. What they have in common is that they can address clinical uncertainty—payers may be reluctant to reimburse therapies with limited clinical evidence from the pivotal trial. However, to ensure patient access, risk-sharing agreements are way to allow patients to be treated for a steep discount, while gathering real-world evidence.
In a pay-for-performance agreement, payers will only have to pay for the treatment if anticipated patient outcomes are achieved. Several hybrid iterations of this type of agreement exist, including milestone payments, where payers receive rebates if disease progresses.
You can find specific examples of these kinds of agreements in our Agreements Library.
Population-based payments
Population-based payments facilitate integrative care delivery. They involve payments for either a specific condition, or for the care of an entire patient. However, unlike an ACO, population-based payments are value-based and are not based on the fee-for-service model.
The Health Care Payment Learning & Action Network (HCP LAN) defines population-based payments as a “single payment that encompasses a broad array of services.” This is also more widely referred to as capitation. Capitation can apply to the care for a specific condition, or the entire continuum of care.
NHS England defines capitation as “paying a provider or group of providers to cover the majority (or all) of the care provided to a specified population across different care settings. The regular payments are calculated as a lump sum per patient.”
Capitated payments typically involve a per-member-per-month fee. They provide predictable revenue for hospitals and providers while incentivizing them to provide quality care.
Restricted access
Another way to address clinical uncertainty is to limit who can receive treatment as real-world evidence is being gathered. By refining the eligibility criteria, patients most-likely to benefit from the treatment can receive access.
What are some of the challenges of implementing value-based care?
There are several challenges to implementing value-based care. They include:
One challenge with VBC is deciding on patient eligibility. Insurers may choose to cover a very select group of patients, denying others who may need treatment coverage, to ensure that they are incentivized accordingly. This leads to another challenge: choosing the right outcomes to measure. In the fee-for-service model, billing is tied to the condition and medication being prescribed, whereas in a value-based contract, financial incentives are tied to outcomes measured by a healthcare provider.
The chosen outcomes must be evidence-based and tracked accordingly. Collecting data, sharing it with various stakeholders, and integrating it into a patient’s care is another challenge. Great structural changes are needed to ensure the compliant sharing of this type of data.
For manufacturers and hospitals alike, another challenge is to manage revenues. Pharmaceutical companies may be unclear for example on how drug profitability could vary with a performance-based or utilization cap contract. One of our solutions to this largely manual process was to create a drug price simulator. This tool helps manufacturers of health technologies compare and contrast different value-based contracts during the negotiation process.
For hospitals, it’s imperative to correctly track rebates, especially if they are warranted after upfront payments: our rebate management platform helps hospital systems identify up to 30% more rebates.
Value-based care can balance innovation while lowering healthcare costs, but implementing it involves enhanced coordination of care delivery and significant organizational changes. VBC also involves innovative payment models that share risk with healthcare providers or place the burden of risk on them entirely to incentivize quality care.
Value-based payment models can reduce high upfront costs of expensive therapies while further evidence is gathered to justify the high costs. For providers, VBC may reduce burnout risk by incentivizing them to keep patients healthy.
The integration of value-based care in healthcare systems around the world requires data. At Lyfegen, we help pharma, MedTech, and providers understand the impact of value-based payment models with our innovative software. Let’s make this shift happen together.
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The pharmaceutical industry and its drug market access strategies are continuing to evolve as we move through 2024, driven by mounting pricing pressures, aggressive regulatory shifts, and heightened payer demands. For pharma companies, refining market access strategies is no longer optional—it’s essential to securing rapid market entry and sustained patient access in an increasingly challenging environment. Let’s explore the key considerations for pharma companies within this space.
Evolving Drug Market Access Strategies
Pharmaceutical companies must adapt their drug market access strategies to address a rapidly evolving landscape shaped by policies and regulations across various regions, including the U.S. and Europe. New legislation, such as the Inflation Reduction Act (IRA), introduces more stringent reimbursement criteria, which could impact profitability and influence launch decisions for new drugs. To mitigate these challenges, companies need to prioritize earlier and broader data collection efforts, focusing on generating robust real-world evidence (RWE) and health economic outcomes research (HEOR). This comprehensive evidence base is essential for demonstrating the value of new therapies beyond the scope of traditional clinical trials, ultimately playing a critical role in payer negotiations and securing optimized reimbursement (NIH).
Global market variations also demand a tailored approach to launch strategies. In Europe, new regulations mandate shorter market exclusivity periods unless drugs are launched across all member states within two years, compelling pharma companies to align their launch timelines more closely with diverse national pricing schemes (European Parliament). Meanwhile, in markets like Japan, frequent price revisions are pushing companies to adopt dynamic pricing strategies to stay competitive.
The Role of Healthcare Technology Solutions in Market Access
With the industry pivoting towards value-based care and personalized treatments, healthcare technology solutions are essential in aligning stakeholder needs. Platforms like Lyfegen are pivotal in this shift. By offering a comprehensive Healthcare technology solution for outcome-based contracting, the Lyfegen platform supports the efficient implementation of value-based agreements between pharma companies, payers, and healthcare providers. Using platforms like Lyfegen means that the administration of complex pricing models can be simplified, patient outcomes can be tracked in real-time, and transparency can be increased, all of which are crucial for pharma to gain and maintain market access.
We continue to watch as the pharmaceutical industry is shaped by evolving regulations, mounting pricing pressures, and shifting payer demands. But to ensure market access, pharma companies must act now by building robust data portfolios early, integrating clinical trial data with real-world evidence (RWE), adapting to global pricing pressures, and leveraging digital solutions.
Lyfegen’s platform is at the forefront of helping pharma companies tackle these challenges. With Lyfegen’s Drug Contracting Simulator, you can model dynamic pricing strategies, optimize your market access plans, and streamline value-based agreements. Combined with the Lyfegen Library of real-world evidence and pricing models, you’ll be equipped to make data-driven decisions, ensuring faster patient access and successful contract negotiations.
Act Now – Book a demo of Lyfegen’s platform and discover how we can support your market access strategy: https://www.lyfegen.com/demo
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