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Today we’re seeing significant scientific breakthroughs that are revolutionizing the treatment of challenging conditions like cancers and both rare and chronic diseases. Advances that activate the immune system or retool genes with a single treatment to change the course of disease all signal that personalized medicine is here and continuing to evolve.
These amazing and important innovations can mean better outcomes for patients. But scientific innovation alone is not enough.
Dan Leonard, National Pharmaceutical Council
To make sure that these promising treatments are delivering the best outcomes for patients, we need innovative thinking about the business of health care as well.
The landmark approvals of two chimeric antigen receptor T cell (CAR-T) therapies in 2017 illustrate the disconnect between advances in the development and delivery of novel treatments and a legacy reimbursement system that is not keeping up with the pace of scientific change. The insurance plans, coverage and reimbursement processes, and nascent value assessment mechanisms that make up our payment ecosystem, simply are not designed to accommodate complex therapies targeting individual needs — or fully leverage the predictive power of real-world data.
In other words, the “golden age” of biotech innovation is colliding with the “golden years” of an aging health care system ill-equipped to fully incorporate precision medicines.
How can health system stakeholders kickstart new thinking and novel approaches that will help align administrative and business processes with medical and digital innovations? How can we develop systems that ensure patents have access to increasingly individualized treatments while sustaining the development of more advanced breakthroughs?
As a first step, stakeholders must collaborate across agencies, across sectors and across sites of care to advance thinking in three key areas:
• How are benefits designed?
• How is care reimbursed?
• How are health outcomes valued?
Decision makers in government agencies, pharmacy and therapeutics committees, and payer organizations, as well as patients and providers, must all have a voice. Their leadership in these three areas — all directly linked to scientific innovation — is critical in determining whether the health care system will support advances in treatment or create unintended barriers.
In the realm of payment and reimbursement, innovative mechanisms are being tested but have yet to achieve widespread use.
For that to change, we should look to forward-thinking payers and biopharmaceutical companies who have been partnering and testing value- or outcomes-based contracts.
For example, the 2017 approval of a groundbreaking CAR-T therapy for leukemia was accompanied by a unique reimbursement model that charges for the treatment only if patients show response by the end of the first month of treatment. This kind of value-based contract moves beyond paying for services, prioritizing performance over process.
Organizations that have worked to forge new approaches to payment and reimbursement have faced an uphill climb. Value- and outcomes-based contracts are generally complex agreements only reached after working through a variety of communications, administrative and regulatory provisions, many of which were written decades before the technology being regulated was ever conceived.
We simply cannot allow outdated regulations to stifle technology that promises to deliver better care to more people. That’s why it is important to harness the organizational will to create contracts that, while complex, provide appropriate access to the most advanced treatments the health system can offer.
In benefit design, change is also very slow to come by. While some benefit designs have been updated, the outcomes aren’t always as intended. Take high-deductible health plans, which were created to give patients “skin in the game” and encourage responsible utilization through cost sharing.
The National Pharmaceutical Council’s research shows that these plans often backfire — patients are discouraged from seeking the appropriate care, miss the opportunity to reach better outcomes and may experience more severe health care needs in the future as a result.
We are starting to see encouraging progress in benefit design.
Value-based insurance design (V-BID) reduces cost-sharing for patients who choose treatments that are more clinically effective. These plans show they can break down the financial barriers standing between people and the treatments that can keep them healthier while still reducing the overuse of health services.
The Centers for Medicare & Medicaid Services has announced a significant expansion of its V-BID pilots within Medicare Advantage plans, more than doubling the number of states where they are being deployed.
Assigning value to treatments is still a relatively new and emerging field. No fewer than a half-dozen value assessment frameworks have been developed, all aiming to measure the value of health care for broad patient populations.
Yet the lens being used to view value tends to heavily reflect one perspective: the payer’s. More work needs to be done to ensure that frameworks accurately capture the reality of the patient and their individual needs and preferences, and recognize the obligation of clinicians to treat individual patients, not populations.
An evolved value assessment framework balances both systemic costs and more nuanced, individual choices about overall health, productivity and quality of life.
Over the next year, NPC intends to start a national conversation about our health care system and how we are spending our health care dollars. We want to include stakeholders from every sector of the health care system to begin a thoughtful dialogue around cost, quality and value within an innovative system.
Health care should be a lifetime proposition. Lives should get longer. Treatments should get more effective. Patients should feel better. And the health care system should be able to deliver those outcomes efficiently.
Biopharma discoveries are changing people’s lives in ways we didn’t know were possible just a decade ago. From managing symptoms to fundamentally altering gene expression to suppress disease entirely, advances in precision medicine are accelerating. Old payment models must make way for new ways of thinking about health care not as purely an expense, but as an investment in people’s health.
As the industry’s science continually expands the treatment frontier, the business of health care must also progress to reflect these new investments for better health.
Dan Leonard is president of the National Pharmaceutical Council (NPC).
