Jim Barlow of Geneos Therapeutics explains the role of value networks and strategies to increase cell therapy access.
Cell therapies offer tremendous benefits for patients, but payers still struggle with how to cope with the costs of such high-priced therapies.
Jim Barlow, vice president of commercial operations & business development, Geneos Therapeutics, will be presenting his market access strategies at the upcoming Oncology Market Access Strategy Summit in San Francisco. His talk, “Developing Cell Therapy Market Access Strategies to Support Reimbursement,” will highlight pricing and contracting strategies and challenges related to cell therapies. Barlow will also look at the recent trend of value networks and how they contribute to the new healthcare ecosystem.
Managed Healthcare Executive (MHE) asked Barlow to describe his talk and share some information about his strategies for managing the complex world of cell therapies.
MHE: Why should healthcare executives be interested in your presentation, what is it about?
Barlow: An effective Market Access strategy is arguably the most important factor in a successful product launch, even surpassing the clinical profile. We’ve seen this with the CAR Ts where despite their strong efficacy profiles, market access challenges have limited their uptake.
MHE: What are the pricing and contracting approaches?
Barlow: Pricing and contracting approaches depend on a lot of factors. These include whether a drug is oral vs. IV (pharmacy coverage vs. medical plan coverage), treatment setting (hospital or office), and patient population/coverage (Private Pay/Medicare/commercial).
For example, outcomes-based programs may only work in the hospital setting where reimbursement is DRG based and not ASP [Average Selling Price] based. For patients with commercial coverage, biopharmaceutical companies can offer co-pay assistance programs and patient assistance programs.
MHE: Do the approaches differ depending on whether the cell therapy is administered in a hospital or office setting?
Barlow: Yes, because the payment models typically differ-especially for drugs covered under the medical benefit. Office-based therapies covered under the medical benefit are typically covered based on ASP, while hospital-based therapies are usually covered on an episode basis under a DRG.
If a drug is covered under ASP, then payers (including CMS) will typically cover the cost of the drug (ASP) plus a small margin above the ASP. However, if the drug is covered on an episode basis under a DRG code, the cost of the drug is typically included in the bundled payment. Often, the payment rates for the episode are not high enough to cover the cost of the drug, leading hospitals to lose money when they administer the therapy.
MHE: Do the coverage challenges differ depending on whether the patient is Medicare, commercial, Medicaid?
Barlow: Absolutely-Medicare restricts which programs biopharma can offer such as co-pay assistance. As a result, Medicare patients may face higher out-of-pocket costs.
MHE: Do oncologists have an appetite for value networks? If so, what do they need to have in order to be successful?
Barlow: Oncologists do have an appetite for value networks, but there are numerous aspects to value networks. Treatment pathways based on clinical efficacy and cost are one aspect but there are many different flavors to Pathways. Quality measures are another aspect to value networks.
However, a few factors have prevented widespread use of value networks. First and foremost, coverage for oncology drugs is still quite strong so there hasn’t been an urgent need to adopt value networks. Second, the many flavors of pathways and quality measures prevent widespread adoption. However, it’s important that biopharm companies stay ahead of the curve on value networks as pressure on drug prices remains and when/if coverage gets tougher, the well prepared companies can differentiate themselves.