Point32Health Exec Says Outcomes-Based Pacts Can Unite Payers, Pharma

by Leslie Small

 

While drugs are increasingly hitting the market that address unmet needs and even offer cures for some rare diseases, private insurers are highly concerned about such therapies’ eye-popping price tags, a recent survey indicated. But one prominent payer executive who spoke during AHIP’s Medicare, Medicaid, Duals & Commercial Markets Forum suggested that insurers are better off working collaboratively with drugmakers to ensure prices are tied to value — rather than engaging in an inter-industry war of words.   Point32Health led the way on outcomes-based deals  “More and more we’re seeing drugs come through with limited evidence through accelerated approval processes, which generally is a marker for an unmet need, which is a good thing. But the evidence can be thin,” said Michael Sherman, M.D., executive vice president and chief medical officer of Point32Health.  While patients should be able to access novel therapeutics, it’s important to understand that “if we’re paying for drugs that don’t have a benefit, we’re increasing premiums and costs,” Sherman said. “So more and more, we’re looking to collaborate. I think if we’re out there having a debate in the press, saying ‘The drug is too expensive,’ [and] the pharma company is saying ‘No, it’s priced right,’ we all end up looking bad.”  Point32Health is largely seen as a trailblazer when it comes to outcomes-based payment arrangements with drugmakers, which tie the price of drugs to their ability to prove clinical effectiveness. One of its more recent outcomes-based pacts was with Takeda Pharmaceuticals America, Inc.: for Alunbrig (brigatinib), which treats non-small cell lung cancer.    Sherman remarked that he recently had meetings with representatives of “two gene therapy companies” who understand the need for a collaborative working relationship with payers. “If they’re going to price them in the millions, then they acknowledge they’re worth less if they’re not effective,” Sherman added.   Payer execs see high-cost drugs as ‘organizational risk’  Sherman’s desire to tackle the cost of novel therapeutics puts him in good company with other payer executives, a recent survey from KLAS Research found. Seven of the eight executives surveyed categorized their level of concern about the “rising cost of novel therapeutics” as “high.”  “As the cost of these therapies grows, just one patient case could significantly impact a self-funded client or our ability to make health care affordable,” one anonymous executive told KLAS researchers. “Typically, when the cost of care escalates, the rising cost ends up being passed to members and patients through increased premiums, making health care unaffordable as a whole. So the cost of novel therapeutics is one of our top priorities, and we look at it as an organizational risk.”  “Everybody in the mix of new therapeutics could do a better job of helping to keep the costs down, especially pharmaceutical companies,” another executive said. “I don’t know whether they will, but we have some leverage with them, so we have the responsibility to get involved.”

 

From Radar on Drug Benefits

 

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