Part 2: Payment Over Time, Buy And Bill from Meeting On The Mesa
By Erin Harris, Editor-In-Chief, Cell & Gene
Follow Me On Twitter @ErinHarris_1
In Part 1 of our recap of last month’s Meeting on the Mesa’s plenary discussion moderated by Audentes’ Chairman and CEO, Matt Patterson, panelists offered insight on their companies’ path to commercialization. Dr. Vijay Chiruvolu, SVP Global Process Development – Cell Therapy at Kite; Rachelle Jacques, CEO of Enzyvant; Dr. Dave Lennon, President of AveXis; Ron Philip, Chief Commercial Officer at Spark Therapeutics; and Jeff Walsh, Chief Strategy Officer at bluebird bio participated in the discussion.
Part 2 focuses on the panelist’s responses to the topic of payment over time and buy and bill. Indeed, Patterson asked panelists about their companies’ opportunities to facilitate payment over time. Dr. Lennon explained that he believes it is incumbent on the company to come at it with the payer’s flexibility about how it wants to implement plans that are going to fit into a model. “I think pay-over-time is an interesting one,” Lennon says. “But the reality is that we're still dealing with small populations. And so, there are plenty of good discussions, but the reality is at the end of the day, it's only $2 million, and I only have three patients, so I’ll just figure it out. That’s the challenge we see.”
Lennon states that he anticipates interesting dynamics at a government and state level in that the federal government understands there is an issue and wants to develop a solution, by policy or legislation. “I think the pressure will come from the states,” says Lennon. “In discussions we’ve had with many states, they’ve asked us to write in that we will allow them to pay over time, if and when the therapy is approved. They’re interested in advocating for it, even though it's not technically available to them on a government basis.”
On the commercial side, most commercial payers can flip the cost in the short term. While payers can take advantage of that service, it has not been in the United States. “Outside of the U.S., I think you have a different dynamic, which is you do have single-payer systems that are budget-based on an annual cycle,” Lennon notes. “And there we see much more traction, because they have a very pressing need to make sure that they don’t blow up their budget on a very near-term basis. We already have some agreements that are getting very close to finalization with certain governments to actually implement pay over time with them, outside of the U.S., because they operate on an annual basis. But I think the pressure must be there to make it happen, and I think that it will happen.”
Ron Philip stated that one of the big feedbacks from the payers initially was that the buy-and-bill model, and the concern that they were having in terms of previous applications to gene therapy, and the potential for egregious markups. “We try to develop solutions that will help address that,” says Philip. “What was a little surprising is that there were some treatment centers that are very happy with those solutions, because they were worried about cash flow. And so we have five or six therapies in a given month, and take 90 days, 120 days, or 300 days to get collection on these things, the administration at some of these treatment centers were concerned, ‘We can't do the next surgery without getting confirmation on the previous surgery from this particular payer.’” This is more of a concern primarily on the government side. Having a solution that offers the direct ability for the payer to pay for it, at least on the commercial side, can be helpful. Legislation is needed to support some of those elements on the government side.
“We were conscious that we needed reasonable copays for patients,” says Philip. “We have a great product, but if the patients can’t be supported on that front, they’re not going to get the treatments they need. It was a tradeoff between what we, as a manufacturer, wanted; what we felt was right for the patient; what was right for the payer; and then also what was right for the institution. The set of solutions that we put forward addressed most of that. The missing element is still the solution for addressing best price and AMB to get to these installments — to achieve better outcomes, contracts with greater discounts. We’re all in this to figure out how to address the gap that still exists.”