Building a sustainable health system for curative therapies

New payment models
/ Healthcare

Curative Therapies, May 2016

As gene therapies, cell therapies, immunotherapies, and other biopharmaceutical innovations advance in clinical trials, science is closer than ever to making the concept of curative therapies a reality. Yet the promise of a “cure” raises a number of questions about how healthcare leaders define and incentivize the development of curative therapies, evaluate their differential value, and structure regulatory and reimbursement pathways to ensure efficacy, safety, and access for patients.

The recent arrival of new curative therapies has already forced several of these questions to play out in current events, and not without controversy. The entrance of Gilead’s curative hepatitis C drug, Sovaldi, on the US market, and the first regulatory approval of a gene therapy in Europe for UniQure’s Glybera, priced at $1.4 million, prompted considerable public debate over cost. Both examples underscore the dilemma facing the healthcare community today: no party wants to discourage the development of cutting-edge technology that provides cures for devastating diseasesmany of which are for rare indicationsyet no one has agreed on appropriate payment solutions for assuring economic sustainability for all stakeholderspayers, patients, investors, and manufacturers alike. The timing is therefore ripe for relevant parties to come together and start driving at answers to the question, how can we shape a healthcare system that promotes and pays for cures?

The main challenge impeding easy uptake of curative therapies in the United States is that sustainability will require a departure from the status quo. The US healthcare system is currently designed to support and reimburse incremental management of chronic disease. Curative therapies, on the other hand, promise significant clinical efficacy over time, but in the absence of disruptive thinking about reimbursement, they will require high up-front expenditures by payers for uncertain long-term outcomes.

As more manufacturers invest in curative and gene therapies, payers, policymakers, providers, and healthcare systems must start to think differently about managing the ensuing concentration of costs and accrual of benefits.  In parallel, manufacturers must consider new models for realizing the value of their innovations and recouping investments. Fortunately, many stakeholders across the board are beginning to embrace new thinking and ideas.

In a series of discussions conducted in late 2015 and early 2016, over 50 individuals representing biopharmaceutical manufacturers, public and private payers, patient advocates, economists, financiers, and subject matter experts shared their views on the value of curative therapies and how best to manage their delivery in the United States. These stakeholders also offered feedback on potential policy solutions and innovative payment models. This work was underwritten by a consortium of biopharmaceutical companies comprising Baxalta, Biogen, Bluebird Bio, and GlaxoSmithKline. For a list of discussion participants, please see the appendix on page 19.

What follows is a summary of key insights from these conversations, including discussion of the impact of curative therapies, exploration of innovative payment models, and recommendations on productive paths forward and next steps. These sections are preceded by a two-part introductory discussion of the challenges in defining and assessing the value of curative therapies and the elements of the US healthcare system that are constraining their uptake.