Outcomes-based drug reimbursement may be on the horizon, report says

How can pharma and life sciences be prepared and agile enough to respond to future challenges if it has not thought about the current trends and emerging challenges? It’s a question that Pistoia Alliance operations team member John Wise has asked, and one that the not-for-profit life sciences organization hopes to answer in its 2030 Life Sciences and Health Go Digital report, which Wise co-authored alongside the alliance’s CEO Steve Arlington.

Globaldata’s pharmaceutical writer Allie Nawrat explains:

The report is based on discussions from three workshops – two in the US, one in the UK – between 75 subject matter experts from 65 different organizations within the life science, research and development (R&D) and healthcare eco-system. But what are the most interesting potential changes that life sciences companies need to be prepared for in 2030? A move towards outcomes-based drug reimbursement could be one of them.”

Wise notes that in 2020 “there is a possibility to cure diseases, which, until quite recently, were incurable” through innovations in gene and cell therapies, giving the examples of GSK treating the adenosine deaminase deficiency – known colloquially as the boy in the bubble syndrome – with gene therapy Strimvelis and Novartis’s spinal muscular atrophy gene therapy Zolgensma.

He adds these remarkable innovations in precision and personalized medicine are accompanied by “price tags which are quite extraordinary” for example: Zolgensma is the most expensive drug in the world, costing over £2m per patient.

Therefore, as the industry moves further into a personalized medicine paradigm, Wise notes that society, health services and pharma “need to think of different ways of reimbursing treatments”. The report says the one-size-fits-all approach where people “pay per pill” is becoming outdated and there will be a transition towards payment based on outcomes where if the treatment is successful over a period of time, then the company will be reimbursed, however, “if it’s not, then reimbursement will have to be diminished pro rata”.

This creates a situation where healthcare expenditure should be treated more long-term like a mortgage. “You don’t try to buy a house in a year, you buy it over 25 years,” Wise notes.

However, he [Wise] does acknowledge that this payment model needs careful thought, because if treatments are not reimbursed this may challenge future R&D investment by companies.”

Allie Nawrat, Globaldata’s pharmaceutical writer