NPC's Michael Ciarametaro Lists 3 Ways the Gene Therapy Market Addresses Value-Based Contract Concerns

Michael Ciarametaro, MBA, vice president of research at the National Pharmaceutical Council (NPC), explains the ways that the gene therapy market is working to address concerns regarding contractual riders for value-based contracts for expensive therapies.

Transcript

Are contractual riders for value-based contracts for expensive treatments like gene therapies, which allow the payer who took on the cost of the therapy to keep receiving payments even after a patient moves to another insurer, actually being used in the real world?

It's a good question. These types of arrangements are in the early stages. If you recall, the reforms to Medicaid best price don't go into effect until July. So, we're not seeing a ton of movement at the moment. But the market is working toward addressing these concerns in 3 ways.

First, the large payers have indicated that they can track outcomes over time if there's agreement between the old and the new payer.

Second, there are third parties out there now that offer to completely outsource the management of these value-based contracts. They will set up the contract, and they will track the outcomes over time.

Third, there are other alternative approaches in terms of how you manage gene therapies. There are carve-outs now available, where basically a purchaser pays a flat per-member per-month fee to a third party and they have financial responsibility for the drug. In that sense, you no longer have the problem of the patient moving because it always constantly resides with that third party.