New hepatitis C medications with exceptionally high cure rates have significantly improved treatment, while also posing a challenge for the healthcare system because the cost of the medications are higher in the short run than other medications. As more curative therapies for different conditions come to market, the healthcare system will need to manage the concentration of upfront expenses in a sustainable manner. A Super Session panel at the 2016 BIO International Convention examined this issue in depth and provided a wide range of industry perspectives.
To have this discussion, “it’s necessary to define the term cure,” said Susan Schaeffer, editor at BioCentury and the moderator of the session. The term can mean many different things to different stakeholders. Patients will benefit from these treatments only if all stakeholders—from drug developers to payers—collaborate to develop reimbursement models that enable sustainable access for patients.
“The system is used to managing continuous administration of chronic therapies,” said John Glasspool, executive vice president and head of corporate strategy and customer operations at Baxalta. Therapies that extend the treatment interval and reduce the number of administrations are considered cures by some. Jeffrey Marrazzo, co-founder and chief executive officer of Spark Therapeutics added, “We tend not to use the word cure, as much as we focus on long-lasting benefits of a single treatment.” These definitions of “cure” can conflict with the traditional understanding of the term as something that halts disease progression or eliminates it completely.
Representing the patient point of view, Stephanie Farnia, director of payer policy at the National Marrow Donor Program/Be the Match, noted that patients want disease remission or cure. They also want to return to the activities they engaged in prior to overcoming with their diagnosis.
As difficult as it can be to define what a “cure” is, clarifying cost versus value can be even more challenging. As more curative therapies are approved for different diseases and generate concentrated costs, patient groups, commercial and government payers, and industry will need to balance cost and value.
One partial solution to finding this balance is the publication of more health economics outcomes research that outlines the broader societal benefits these treatments can have. When a curative therapy is approved, “the price can be a surprise to the payers,” said Surya Sing, M,D., vice president of specialty client solutions at CVSHealth. Government payers are not immune to this surprise, or from the challenges that commercial payers face in covering costs, sad Sean Cavanaugh, deputy administrator and director at the Centers for Medicare & Medicaid Services (CMS).
The panel agreed that out-of-pocket cost for patients overall is a major concern for all stakeholders, and all of the organizations represented by the panel are developing different ways of thinking about how to quantify the value of these therapies. Besides the reduction of costs to the healthcare system, and improvements to quality of life, “There’s also the value of compassion,” said Mark Trusheim, visiting scientist at the Massachusetts Institute of Technology’s Sloan School of Management.
At a basic level, “value is essentially the benefits less the costs,” said Glasspool. However, with curative therapies, certain cost offsets are not going to be as evident from the healthcare system’s standpoint as they are from society’s standpoint. Patients might evaluate the benefits of a curative therapy differently than drug developers and payers. Thus, it is critical to engage patient communities to build a better perspective on benefit and value.
Oftentimes, outcomes data focuses on whether an intervention increases or reduces overall cost to the healthcare system. “The approach can be very formulaic,” said Singh. There are measurable, quantifiable outcomes that patients care about, and then there are qualitative data that need to be included and analyzed.
New payment models are also needed to helps finance these treatments over time. Both payers and drug developers will need to line up the period of costs with the period of benefits, said Trusheim. That goes back to defining value: what exactly is the value, and who gets each share?
As this new therapeutic era becomes a reality, it is incumbent on drug developers and payers to address the cost-value challenge. “We need to ensure patients have access to these medicines without taking on an additional burden,” Glasspool concluded. “We’re the ones that should fix this.”