Value Based Agreements - Zolgensma
After extensive research, we were not able to identify the special details of the value-based agreements signed between payers and Novartis for the drug Zolgensma since August 2018. However, we were able to determine that AveXis, a subsidiary company of Norvatis that was responsible for the development of Zolgensma, announced a value-based pricing framework that sought to price Zolgensma at around 50% less than multiple established benchmarks for payers. Cigna Corporation and Harvard Pilgrim Health Care have already made agreements with AveXis concerning the payment plans announced by AveXis for the drug Zolgensma.
- On May 24, 2019, AveXis announced innovative access programs for Zolgensma that entailed a payment plan spanning over five years.
- The company announced that it had come up with the payment plans after consultations with payers and it had decided to offer pay-over-time options that extend up to 5 years and outcomes-based agreements that extend up to 5 years, as well as a patient program, OneGene Program, that would support affordability and access of the personalized support team options for patients.
- The CEO of Novartis, Vas Narasimhan, stated that "We have used value-based pricing frameworks to price Zolgensma at around 50% less than multiple established benchmarks including the 10-year current cost of chronic SMA therapy."
- The current cost of a 10-year chronic SMA therapy, which must be provided over a patient’s lifetime, can at times exceed $4 million within the first 10 years of a child’s life. Additionally, the therapy is ineffective if treatment is stooped.
- On the other hand, AveXis announced that the wholesale acquisition cost of Zolgensma was $2.125 million for a one-time treatment.
- AveXis announced that it had partnered with Accredo to provide a pay-over-time option that would extend up to five years. Additionally, the company selected CuraScript SD as its specialty distributor for Zolgensma.
- The company also announced that it was in advanced discussions on the terms of payments with more than 15 payers. Some had already agreed to the terms including Cigna Corporation and Harvard Pilgrim Health Care.
- Steve Miller, M.D., chief clinical officer, Cigna Corporation noted that "We look forward to continuing the work we have started with AveXis to find unique solutions like installment payments and outcomes-based agreements for these life-changing gene therapies."
- Michael Sherman, M.D., M.B.A., chief medical officer of Harvard Pilgrim Health Care also commented that "We are thrilled to be able to offer our members access to this groundbreaking gene therapy, particularly in light of AveXis agreeing to place a portion of the cost at risk, contingent upon demonstrating continued performance over a five-year period,"
We commenced our research to determine the value-based agreements signed between payers and Novartis for the drug Zolgensma since August 2018 by scanning through the official websites of Novartis and its subsidiary AveXis, the company behind the manufacture of Zolgensma. We searched for relevant information regarding the subject under investigation through the media sections of the websites. Unfortunately, we were not able to obtain any news articles or press releases published on these databases regarding any value-based or outcome-based agreements that either of the company had made with any payers for the drug Zolgensma.
However, we were able to obtain a press release by AveXis dated May 24, 2019, that detailed the company’s innovative access programs for Zolgensma According to the press release, the access program for the drugs was founded on a value-based pricing framework that sought to price Zolgensma at around 50% less than multiple established benchmarks. The press release also had comments made by Steve Miller, M.D., chief clinical officer, Cigna Corporation, as well as comments by Michael Sherman, M.D., M.B.A., and chief medical officer of Harvard Pilgrim Health Care that suggested that these institutions had made value-based agreements with AveXis for the drug Zolgensma. Unfortunately, we could not find further details related to the agreements made between these payers and AveXis. We have summarized the details of the value-based agreements announced by AveXis in the brief.
Next, we scanned through the official websites of Cigna Corporation and Harvard Pilgrim Health Care as we sought to determine further details of the agreements between these payers and AveXis. We scanned through the news and updates sections of these websites but we could not find any relevant information specific to subject under investigation. The only relevant information available related to how the companies were working with AveXis on the treatment options for SMA.
We decided to shift our focus through the media outlets and press release outlets. We hoped that since the drug Zolgensma was so expensive, then any value-based agreements made between payers and Norvatis or its subsidiary AveXis were newsworthy and most likely would have been captured by media outlets or press release platforms. We searched through reputable databases such as Reuters, CNBC, and Forbes among others. We also searched for relevant data through PR News Wire and other press release databases. However, our search was not fruitful. The only relevant information that we could obtain was specific to Zolgensma's approval by the FDA in May 2019. We extended our research through databases that publish medical news such as Med City News, SMA News Today and PM Live among others. We had hoped that since these websites publish news information specific to the healthcare industry, we would be able to find relevant information regarding the subject under investigation. Unfortunately, the search was not fruitful either. The only relevant information that we were able to obtain was related to the public outcry by medical professionals and health insurance companies regarding the pricing of the drug as well as news related to the FDA approval of the drug. As a last resort, we decided to focus our research on databases dedicated to drugs pricing reviews such as Institute for Clinical and Economic Review (ICER) and New England Comparative Effectiveness Public Advisory Council (New England CEPAC), We had hoped that since these institutions review the pricing of drugs, then they were excellent sources for any details regarding payers that had adopted the payment plan laid out by AveXis. Unfortunately, the search was not fruitful.
Limitations of the Research
One probable reason why the data for the subject under investigation was not available publicly could stem from the fact that any negotiations for discounts or a better payment plan between AveXis and payers was confidential and thus cannot be found in the public domain.