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.

Related Post: Value-based pricing vs best price? Medicaid's best price problem

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.

BOOK A DEMO

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.

BOOK A DEMO

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.

BOOK A DEMO

CMS may want to consider value-based purchasing arrangements for Alzheimer’s Disease drugs

The Alzheimer’s Disease biologic Aduhelm (aducanumab) – a beta amyloid-directed monoclonal antibody - has experienced a tremendous amount of controversy regarding its safety and efficacy, both before and after its approval by the Food and Drug Administration (FDA) in June 2021.

A decision in April of this year by the Centers for Medicare and Medicaid Services (CMS) to place severe limitations on coverage of Aduhelm has all but killed the drug’s chances of success. And, even after Aduhelm’s original wholesale acquisition cost (WAC) of $56,000 was cut in half, there were very few takers in both the public and commercial payer spaces. Aduhelm’s “failure” to this point is partly to blame for the departure of Biogen’s CEO, Michel Vounatsos.

Could Biogen’s Aduhelm have been saved by a value-based purchasing agreement with CMS, in which Medicare Administrative Contractors and Medicare Advantage Plans only pay for Aduhelm if it provides clinical benefits to patients? Possibly. Moreover, and perhaps more importantly, such an arrangement could still be used for other beta amyloid-directed monoclonal antibodies that are currently in late stages of development and are less controversial than Aduhelm.

Under the final national coverage determination (NCD) issued in April by CMS, Medicare will severely restrict coverage of Aduhelm. Concretely, the decision implies that only Medicare beneficiaries who have enrolled in CMS-authorized randomized controlled clinical trials will get coverage of Aduhelm.

In addition, under the NCD, CMS states that, if approved by FDA, the entire class of beta amyloid-directed monoclonal antibodies will be subject to restricted reimbursement. For example, all accelerated approvals must undergo post-marketing clinical trials, analogous to the stringent requirements imposed on Aduhelm. And even beta amyloid-directed Alzheimer’s Disease drugs that go through the regular approval process must enter a coverage with evidence development protocol, which implies that post-approval collection of data in patient registries will be mandatory.

In its NCD decision, CMS did not mention a value-based purchasing agreement. Nor did it reference Aduhelm’s WAC. Given that CMS is not permitted to take cost or cost-effectiveness into account, it perhaps makes sense that Aduhelm’s WAC wasn’t mentioned.

Nevertheless, at a regional level, a value-based purchasing agreement is something Medicare Administrative Contractors and Medicare Advantage Plans could have pursued. In addition, nationally, the Center for Medicare and Medicaid Innovation has the authority to test models which modify Medicare payments for certain high-priced drugs. These models are designed to introduce a value-based approach for drugs that have been approved with limited evidence. Certainly, the class of beta amyloid-directed monoclonal antibodies fit this description.

Here, a linkage between pay and performance would need to be established, along with the proper timing of the measurement of cognitive decline in Alzheimer’s Disease patients. Performance measures could include the kinds of validated cognitive assessments outlined in the NCD.

Last year, the Institute for Clinical and Economic Review conducted a preliminary analysis of Aduhelm, extrapolating from Phase 3 data. ICER concluded that Aduhelm was not cost-effective, given the drug’s WAC, and that a cost-effective price benchmark range for would be between $3,000 and $8,400 per year for early-stage Alzheimer’s Disease patients, which is much lower than the current WAC of $28,000.

ICER’s assessment was not based on real world evidence, however. In any CMS-initiated value-based purchasing arrangement, there would be real world evidence, and accordingly adjustments could be made to the acceptable price range of the product. This could have applied to Aduhelm, but may still be relevant in future with respect to other beta amyloid-directed monoclonal antibodies, which are presently in Phase 3. These include Biogen/Eisai’s lecanemab, Roche’s donanemab, and Roche’s gantenerumab.

Aduhelm’s ship has perhaps sailed, with the baggage of the FDA approval controversy and the requirement of a randomized controlled clinical trial for any coverage at all. Nevertheless, value-based arrangements could very much be in play for other beta amyloid-directed monoclonal antibodies.

Undoubtedly this would be a major undertaking, particularly logistically. And, getting CMS to buy in won’t be easy. But, there’s precedent for CMS wanting to pursue value-based agreements. To illustrate, at the time of FDA’s approval of the CAR-T therapy Kymriah (tisagenlecleucel) in 2017 – indicated for acute lymphoblastic leukemia - it was accompanied by the announcement of a novel outcomes-based agreement with CMS, in which CMS would pay for Kymriah only if patients had responded to it by the end of the first month. Without disclosing why, CMS quietly backed away from that agreement.

Maybe the substantial unmet need in Alzheimer’s Disease will trigger CMS to consider alternative approaches to reimbursement. And, if any of the beta-amyloid directed monoclonal antibodies are approved in Europe or the U.K., similar value-based arrangements may be an option for payers.

Partnering with Lyfegen may be the solution for manufacturers and payers alike, as its platform can put users on the right track towards successful implementation of value-based purchasing agreements. The Lyfegen platform identifies and operationalizes value-based payment models in a cost-effective manner.

About the author

Cohen is a health economist with more than 25 years of experience analyzing, publishing, and presenting on drug and diagnostic pricing and reimbursement, as well as healthcare policy reform initiatives. For 21 years, Cohen was an academic at Tufts University, the University of Pennsylvania, and the University of Amsterdam. Currently, and for the past five years, Cohen is an independent healthcare analyst and consultant on a variety of research, teaching, speaking, editing, and writing projects.

BOOK A DEMO

Pharma says they want greater competition within the industry and more incentives for pharmaceutical innovation; value-based purchasing agreements can provide both.

Value-based purchasing arrangements first appeared in the European markets in the 1990s, while U.S. healthcare markets did little with value-based contracts for pharmaceuticals until the 2000s. The high cost of new drugs coming to market, large annual increases in existing drug prices, and political pressure from lawmakers on payers to address the high cost of healthcare have encouraged stakeholders to make greater use of value-based purchasing arrangements.

It's easy to understand the appeal of value-based purchasing agreements for private and public payers. Value-based purchasing is one way both U.S. and European payers are using to reduce overall healthcare spending.

For drug companies, value-based purchasing puts an end to their unencumbered pricing strategy. But pharmaceutical manufacturers realize value-based purchasing agreements are the best way, and maybe the only way, to get their new, higher-priced products covered by payers and into the treatment plans of patients.

How do pharmaceutical companies determine their drug prices?

Pharmaceutical companies are in business to generate as much revenue as possible without jeopardizing patients’ access to their treatments. In the U.S., where drug pricing is unregulated, pharmaceutical manufacturers can charge any price they want for their products. In the EU, member states use regulations such as direct control over pricing, referencing the average price of a drug among all EU members to set a national price, or regulating the drug manufacturers’ profit.

When deciding on a new drug’s retail price, the manufacturer considers several areas of concern such as the drug’s competition, government-granted exclusivity, patents in force, and a drug’s clinical effectiveness and benefit to patient outcomes.

Pricing a drug incorrectly can have severe consequences for the manufacturer’s bottom line. Private and public payers in the U.S. have ways of restricting patients’ access to drugs that they consider overpriced. In European countries, drug manufacturers risk being fined by authorities for unfair prices and excessive price hikes.

Value-based purchasing promotes competition in the pharmaceutical market

In the U.S., there are economic policies and legal loopholes that manipulate competition in the drug industry. The Biden administration considers this one of the key problems to address to support drug pricing reform. The president’s Executive Order 14036, the Competition Executive Order, calls for increased transparency, innovation, and competition.

Even though manufacturers take advantage of U.S. government protections that create temporary monopolies for some drugs, the large industry trade group PhRMA has joined the call for reforms that fix the current distortions in the market that stifle competition.

Manufacturers producing new drugs with in-class competition from other manufacturers—such as generics, biosimilars, or new uses or combinations of older drugs—use the real-world evidence gathered from value-based purchasing agreements to demonstrate the greater clinical value of their treatments compared to their competitors’ products. Data that show a drug’s uniqueness and effectiveness may be used to justify a manufacturer’s higher-than-average price.

In addition, manufacturers hope aligning a drug’s price to its clinical value will shift payers’ focus away from approving treatments based solely on the lowest price to covering similar treatments that might be more expensive but produce better health outcomes for patients.

Value-based purchasing incentivizes research and development (R&D) of new drugs

The post-market clinical data gathered under value-based purchasing can facilitate data-driven drug development. For example, the drug company Novartis published a position paper in which they stated they use real-world evidence to support the development of customized interventions and to invest in research in areas of the highest value for patients.

In the U.S.market in recent years, the number of clinical trials and an overall increase in spending on brand-name prescription drugs suggest that pharmaceutical manufacturers have been concentrating their research and development dollars on new high-cost specialty drugs for complex, chronic, or rare conditions they expect will be the most profitable.

New treatments like these, where the drug’s value is yet to be established for payers, are good candidates for value-based purchasing arrangements. The successful implementation of value-based purchasing contracts—with better health outcomes for patients, cost controls for payers, and fair prices for manufacturers—encourages even more data-driven drug development.

The Lyfegen Platform

Value-based purchasing agreements are a complex but necessary part of doing business for pharmaceutical manufacturers. They provide a framework for assessing a drug’s value using shared outcome measures and provide real-world evidence of the benefits of their products for patient health outcomes. Manufacturers who are unwilling to enter into value-based purchasing contracts with payers may find themselves at a disadvantage in negotiations with other stakeholders.

Lyfegen’s software platform helps healthcare insurances, pharma, and medtech companies implement and scale value-based purchasing contracts with greater efficiency and transparency. The Lyfegen Platform collects real-world data and uses intelligent algorithms to provide valuable insights on drug performance and cost in value-based contracts. By enabling the shift away from volume-based and fee-for-service healthcare to value-based healthcare, Lyfegen increases access to healthcare treatments and their affordability.

BOOK A DEMO

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.  

READ THE OFFICIAL PRESS RELEASE

BOOK A DEMO

The news are out: we are immensely proud to be partnering with Johnson & Johnson to advance value-based healthcare and help patients around the world. We dived into a conversation with our CEO Girisha Fernando on why this partnership holds so much value for Lyfegen.


Girisha, why was the partnership with Johnson & Johnson such an important milestone for Lyfegen?

Girisha Fernando: Johnson & Johnson and Lyfegen share the same vision of sustainable & a value-based healthcare environment. Our goal is to help patients to receive the healthcare treatments they need and with this partnership, Lyfegen is proud to have been a key enabler for Johnson & Johnson and hospitals to deliver better health outcomes for patients.

How can this partnership be a blueprint for future collaborations?

Girisha Fernando: The increasing demand for healthcare measured against the limited financial resources is forcing the healthcare system to deliver innovative technologies to patients at sustainable costs. This can be done with value-based healthcare approaches and value-based agreements. The partnership between hospitals, Johnson & Johnson and Lyfegen shows how healthcare providers, manufacturers and an innovative tech company can deliver more value to patients whilst making efficient use of limited resources.

What would you suggest healthcare payers and hospitals to do if they are considering to implement value-based healthcare agreements with manufacturers?

Girisha Fernando: I believe it is important to focus on how to deliver better patient outcomes at lower cost. Value-based healthcare agreements can be used as a value-maximising method. It allows payers and hospitals to measure health outcomes and the adjacent cost to achieve these outcomes. Thus, hospitals can pivot on focusing their resources on value-adding healthcare treatments whilst addressing financial risk and uncertainty. It will take initial & minimal investment, but the return on investing in value-based healthcare and technology will be in the form of more value for money and better quality and patient health outcomes.

Why is Lyfegen the right platform for this?

Girisha Fernando: With over 120 value-based healthcare agreements running on the Lyfegen platform, we provide the necessary expertise, knowledge and technical competence to our customers. With these capabilities, we break down the complexity of implementing and managing value-based healthcare agreements. And lastly, we ensure that our customers can improve patient health outcomes by using value-based agreements at scale, efficiently.

Learn more about our platform by booking a demo today:

BOOK A DEMO TODAY

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.

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.

READ THE WHITEPAPER

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

yael@gkpr.com

Read the Exclusive article with AXIOS

Read the Press Release on PR Newswire

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!

‍

‍

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

‍

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.

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.

‍

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!

MEET THE LYFEGEN TEAM