Next Generation Therapies in Massachusetts: New Solutions for Coverage and Payment

Posted On March 5th, 2019

Next Generation Therapies in Massachusetts: New Solutions for Coverage and Payment
NEHI white paper urges early assessment of trends in the drug development pipeline to identify needed changes in coverage and payment policies, and identifies five principles of cross-industry collaboration that should shape new policies.

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A growing number of highly innovative new therapies are reaching the health care market that are notable both for the unprecedented benefits they may confer on patients and for the challenge they pose to conventional methods of evaluation, payment and cost management of new pharmaceuticals. The NEHI white paper, Next Generation Therapies in Massachusetts: New Solutions for Coverage and Payment, urges early assessment of trends in the drug development pipeline to identify needed changes in coverage and payment policies and identifies five principles of cross-industry collaboration that should shape new policies.  

The NEHI white paper recommends that payers, providers, patient groups and biopharmaceutical firms in the state engage in “horizon-scanning” processes to assess the implications of new drug development in a high-priority field such as oncology.

The objectives of the horizon scans will be to anticipate therapeutic trends that may have a major impact on the health care system once new therapies are approved by the FDA; to gauge the accumulating impact on health care spending as the number of next generation therapies (many of them highly-personalized or used among small numbers of patients) grows over time; and to identify the need for new policies on coverage and reimbursement that ensures both patient access to new therapies and sustainable overall health care spending.  

The white paper also recommends five guiding principles for collaboration among pharmaceutical manufacturers, providers and payers in the Commonwealth:

  • Agreement in principle to link manufacturer reimbursement to demonstrations of lasting (durable) benefits among patients.
  • Agreement in principle to expand reimbursement of physician-administered drugs to include direct contracting between payers and manufacturers, complemented by new methods for fair reimbursement of providers who must incur new costs for facilities and personnel in administering some next generation therapies.
  • New collaboration among the state’s payers, providers and biopharmaceutical manufacturers to create standard templates for alternative contracting, such as outcomes-based pharmaceutical contracting.
  • Greater engagement among all parties to measure the total costs and benefits that may accrue from use of next generation therapies. These may include non-pharmaceutical costs, such as medical services needed to support a new therapy, or conversely, the elimination of lifelong medical costs if a patient is cured from a previously incurable condition.  
  • New engagement on alternative policies on reinsurance and risk adjustment that may support the highest and best use of next generation therapies, recognizing longer-term costs and benefits.

NEHI’s recommendations are an outgrowth of discussions it generated among its member organizations in the health insurance, health care provider, patient advocate and life science sectors. For more information, please contact Tom Hubbard, NEHI Vice President of Policy Research, at thubbard@nehi.net

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