New targeted therapies reduce waste and identify patients that will benefit most, but their high price tags have left the healthcare industry scrambling to figure out how to pay for these treatments and cures.
The age of the Human Genome Project has resulted in more targeted therapies that can be given to the patients that will respond the best. However, while these new targeted therapies reduce waste, they come with high price tags, which has prompted a discussion of how to pay for the treatments.
During one session at the Academy of Managed Care Pharmacy Annual Meeting, held March 27-30, 2017, in Denver, Colorado, speakers discussed co-pay concerns, adherence issues, and paying for value.
Steven G. Avey, vice president of specialty clinical programs at Medimpact Healthcare Systems, Inc, discussed what he called the co-pay “conundrum.”
“We really do believe that members need to have a stake in the game,” he said.
When co-pays were just $1 or $2, members didn’t understand the value of their medication and there were resulting adherence problems. However, it’s well known that when co-pays are too high, adherence and persistence are reduced.
“So it’s arriving at that balance of what’s an appropriate co-pay,” he said.
Complicating the issue further is the rise of high-deductible health plans, Avey added. As of 2016, more than 50% of individuals had a deductible of $1000 or more, said Michael Ciarametaro, MBA, vice president of research at the National Pharmaceutical Council. Research has shown that when people pay more out of pocket, utilization decreases and it decreases irrespective of value. This means that patients cut out both low-value and high-value services.
“So really this becomes a tool that is focused more on cost than value,” he said.
Ciarametaro outlined 4 tools that provide a better way to center on value:
Value Frameworks
These tools are important in determining what is high value and what is low value. However, each one has its own methods and intended audience and understanding those differences is critical, said Ciarametaro.
While these frameworks have a lot to teach, they have a lot of room for improvement, he said, such as increased transparency and stakeholder involvement. In addition, they represent a single determination of value, which is not adequate. They need more flexibility for population, condition, and region of care.
VBID
With about 30% of healthcare dollars spent on low-value care, VBID aims to reduce utilization of low-value care and increase utilization of high-value care through benefit design. VBID would have a higher out-of-pocket cost for low-value services and a lower out-of-pocket cost for high-value services.
For example, a patient with familial hypocholesterolemia who tried and failed the standard of care should have a lower out-of-pocket cost for a PCSK9 inhibitor than the patient with familial hypocholesterolemia who has not tried the standard of care.
Value-Based Contracting
Ciarametaro broke value-based contracting into 2 parts: outcomes-based contracting and indication-based contracting. In outcomes-based contracting the payer shares budget risk with the manufacturer by contracting on terms linked to outcomes that could include hospitalizations and emergency department visits. Indication-based contracting acknowledges that some drugs have multiple indications and utilization will vary across payers and solves the issue where the drug has the same price across indications.
However, there are a number of barriers to value-based contracting, which include learning how to set them up, a lack of data infrastructure, the challenge of how to define outcomes, a lack of control over adherence, and regulatory barriers and concerns.
Financing
The trouble with paying for these new drugs is that while they are very effective, they are very expensive and payers are wary of anything with a large upfront cost when they know members are likely to move to another insurer.
Ciarametaro outline some policy solutions to this issue that are being considered:
The drug amortization proposal has the greatest buy-in from payers and manufacturers.
Perioperative Nivolumab Boosts NSCLC Survival: CheckMate 77T Trial
May 16th 2024This interim analysis of the CheckMate 77T trial, outcomes were compared between adult patients receiving neoadjuvant nivolumab plus chemotherapy or neoadjuvant chemotherapy plus placebo for resectable non–small cell lung cancer (NSCLC).
Read More
Frameworks for Advancing Health Equity: Urban Health Outreach
May 9th 2024In the series debut episode of "Frameworks for Advancing Health Equity," Mary Sligh, CRNP, and Chelsea Chappars, of Allegheny Health Network, explain how the Urban Health Outreach program aims to improve health equity for individuals experiencing homelessness.
Listen
Congress Urged to Repeal Comstock Act Threatening Reproductive Rights and Public Health
May 16th 2024In a joint letter addressed to Congress, Healthcare Across Borders, Take Back the Court Action Fund, and UltraViolet Action called out the resurgence of the Comstock Act, urging immediate action to repeal this century-old law that threatens reproductive rights and public health in the US.
Read More
Atypical Marker Expression in T-Cell Acute Lymphoblastic Leukemia/Lymphoma
May 15th 2024Two unique case reports highlight the diagnostic challenges and critical importance of comprehensive immunophenotyping in cases of T-cell acute lymphoblastic leukemia/lymphoma that present without typical immaturity markers but with rare γδ T-cell receptor expression.
Read More