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The Broad Appeal of VBID and Support From Pharma


Generally, life sciences companies are aligned around the benefit of using value-based insurance design (VBID) to address health care costs and ensure that medications get to the patients who need them.

The concepts of value-based insurance design (VBID) have broad appeal in the health care industry, with life sciences companies viewing it as a way to get their medications to the patients who need them, according to a panel of experts during the last session of the V-BID Summit, hosted by the Center for Value-Based Insurance Design at the University of Michigan.

The panel was made up of individuals who previously worked at manufacturers, including Merck, Amgen, and Sanofi, but who have since moved to other jobs. Josh Ofman, MD, MSHS, chief medical officer, external affairs, GRAIL, explained that while researching drug spending and drug pricing issues at Amgen, it was clear to him that shifting costs to patients were a big problem and undermined appropriate utilization and high-quality care.

Amgen ended up implementing a VBID program for its employees, who were suffering from insurance designs and not taking the medications they needed. A similar program was implemented at Merck when Muna Bhanji, founder, president, TIBA Global Access, worked there.

While at Merck, the affordability issue was very serious for employees, but they only cared about what they had to pay out of pocket, “which of course means you have to solve [the affordability issue] through benefit design.”

Mark Stejbach, independent consultant, had previously worked for a variety of pharmaceutical companies and got involved in VBID early on after meeting with A. Mark Fendrick, MD, director of the V-BID Center, who shared his 2001 paper on benefit-based co-pay, which was later renamed VBID.

“While then, and even now, these ideas appeal to me professionally and intellectually, I also think there’s sort of a moral imperative to what we’re trying to do here [with VBID],” Stejbach said.

Generally, manufacturers are aligned around the idea of VBID and using evidence to base insurance design for patients, said Bhanji. The companies are concerned about the level of out-of-pocket costs being embedded into benefit designs so that patients pay 3% of hospitalization costs but 14% of pharmaceutical costs.

She added that the trend of plans applying rebates to lower premiums means that rebates aren’t making it to patients at the pharmacy counter. Ofman echoed the concern about how rebates are being used.

“The sick subsidizing health care is the opposite of how insurance is supposed to work and…rebates are not being seen by patients and are instead helping to subsidize to help provide lower premiums,” he said.

According to Christine Juday, vice president, Discern Health, how the life sciences industry views VBID “depends on if you are a Tigger or an Eeyore.” Currently, these companies will spend “countless dollars” trying to reach patients and providing patient support, “and yet we know VBID and reducing that barrier improves adherence from anywhere from 3% to 12%. If you know that, why wouldn’t you advocate for that?”

Life sciences companies who have an Eeyore perspective of VBID might be in the situation where they are bringing therapies to the market that are more like me-too drugs or aren’t providing a significant value, Juday explained. Those companies might find their products being categorized as low value according to VBID principles.

The issue of clinical nuance is at the core of value and is where life sciences companies have the opportunity to bring something of importance to the conversation, Juday said. The companies have a lot of data on patient journeys, patient-reported outcomes, adverse effects, and data gathered from social media listening. All of these data should be put into public databases and shared registries, she said.

Bhanji added that it would be possible to get to a place where a patient would have a benefit design personalized to them based on real-world data, predictive analytics, and health information technology to give them the best care.

“That would be an ideal world,” she said. “And I do believe that over time, if we wanted to get there, we have the tools in our hands. The payers, the providers, the industry [have] the tools in their hands to be able to move in that direction.”

At the end of the day, doing things like using biosimilars and generics to address the economics won’t make much of a difference if the insurance design doesn’t change, according to Ofman. “The innovative therapeutics and testing and diagnostics are going to solve the cost problem, and they’re not the problem.”

Finally, Bhanji noted that VBID not only has broad support in the industry, but politically, as well. She views VBID as a way to address the issue of waste in health care.

“I think that VBID can serve as a very objective voice in the political discourse that is underway in this country in terms of where exactly we have to shine a spotlight if we are going to get after the issue of health care spend in the United States,” she said.

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