Value Based Agreements

Part
01
of three
Part
01

Value Based Agreements - Luxturna

Based on the findings, Spark Therapeutics did not sign any value-based agreements with payers since August 2018.

OVERVIEW

  • In January 2018, Spark Therapeutics signed a value-based agreement with Harvard Pilgrim Health Care for its drug Luxturna. However, no agreements were signed later. This information was traced from publicly-announced" value-based contracts in the United States.
  • In 2018, a report revealed that "Spark Therapeutics is proposing to contract directly with commercial payers or their specialty pharmacies, rather than with treatment centers". However, aside from the already signed contract with Harvard Pilgrim Health Care in January 2018, no further agreements were signed.
We have compiled a list of reports below that establish no value-based agreements were signed by Sparks Therapeutics with payers since August 2018:

LINKS TO THE REPORTS

Part
02
of three
Part
02

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.

Helpful Findings

  • 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,"

Research Strategy

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.
Part
03
of three
Part
03

Value Based Agreements in Eye Care

Eight value-based agreements (VBAs) for eye care medication are not available due to lack of publicly-announced VBAs and the lack of VBAs specifically targeting eye care medication. However, five VBAs for the 2018-launched eye care product — LUXTURNA — are listed below, along with the name of the manufacturer, the payer/plan accepting the agreement, a brief description of what the agreement is about, and the terms of the agreement.

VBA: EXPRESS SCRIPTS

VBA: HARVARD PILGRIM

VBA: CMS

  • The name of the payer accepting the agreement is the Centers for Medicare and Medicaid Services (CMS).
  • The agreement is about using the health insurance programs of Medicare and Medicaid for people with low incomes, disabilities, and lots more to cover the payment of the product and therapy treatment under the 'Spark Therapeutics Generation Payment Services.'
  • The outcomes-based arrangement makes payment symbiotic with therapeutic, both on short-term (a 30-90 day interval) and long-term goals (for example, a 30-month assessment of efficacy). Harvard receives a rebate from the manufacturer where the treatment doesn't perform as expected.

VBA: AFFORDABLE CARE ACT

  • The drug is LUXTURNA, and the manufacturer is Spark Therapeutics.
  • The name of the payer accepting the agreement is the Affordable Care Act.
  • The agreement is about using the Act for cost-sharing arrangements directly with patients who have retinal dystrophy.
  • The terms of the agreement are following the Act, which stipulates the deductible limit for individuals as $7,000, while the deductible limit for families is $14,000. This means that the Spark will bear the cost of the deductible limits.

VBA: CIGNA

RESEARCH STRATEGY

We started our findings by going through industry reports of value-based agreements signed recently between payers and pharmaceutical companies for eye care medication. As the timeline for value-based agreements (VBAs) for eye care medication was challenging to find, we focused solely on the drug — LUXTURNA — manufactured by Spark Therapeutics. The reason for this is that the product was launched in the year 2018 (specific month not stated), and our research is limited to August 2018 to now. We were able to identify five value-based agreements for eye care medication, four out of them being payers accepting the agreement, and the only one being a plan (Affordable Care Act) accepting the agreement.

To get more value-based agreements for eye care medication, we looked for other expensive eye care medication drugs in the US that could warrant VBAs. Through the search, we found only Oxervate, but there were no publicly available VBAs on the drug.

Secondly, we looked for more VBAs on LUXTURNA by going through industry reports such as Biospace, Margolis Center, and MM & M, among others. What we got were among the five listed VBAs of our findings and other VBAs not related to eye care medication.

Lastly, we went through the press releases and websites of Spark Therapeutics and Dompe (Oxervate) to find recent VBAs executed between them and payers. Unfortunately, there was limited information (Spark) and no information at all for Oxervate.

According to industry experts, the reality is VBAs are not publicly-announced as publicly-announced VBAs only grew from 39% to 43% in the third quarter of 2018. VBAs will be even more difficult for eye care medication because only about 2,500 persons in the US have retinal dystrophy — a condition that LUXTURNA treats.
Sources
Sources

From Part 01
Quotes
  • "Spark is proposing to contract directly with commercial payers or their specialty pharmacies, rather than with treatment centers."
  • "Spark Therapeutics is offering agreements that include rebates to payers at 30 to 90 days and 30 months if Luxturna falls short of established efficacy goals, which compare full-field light sensitivity threshold scores against baseline measurements before treatment. Michael Sherman, chief medical officer of Harvard Pilgrim Health Care, a Massachusetts-based insurer, called the outcome-based rebate arrangement “truly innovative, as it ties payment for the therapeutic not only to a short-term goal, but also to a longer-term, 30-month assessment of efficacy."
Quotes
  • "One is an agreement with Harvard Pilgrim, a nonprofit health plan covering 1.2 million people, to pay rebates if a patient’s vision doesn’t meet certain thresholds in 30 to 90 days, and then 30 months after treatment, under a model known as outcomes-based pricing."
Quotes
  • "It’s been almost a year since Harvard Pilgrim Health Care signed what’s known as a “value-based agreement” with Spark Therapeutics to cover Luxturna, Spark’s $850,000 gene therapy for a form of vision loss. In doing so, Harvard Pilgrim became the first insurer in the U.S. to try this new kind of payment model for gene therapy—one-time treatments that are meant to last for life, but aren’t guaranteed to. "
Quotes
  • ""On January 3, 2018 Spark Therapeutics announced a collaboration with Express Scripts affiliates, CuraScript Specialty Distribution and Accredo Specialty Pharmacy through which payers would purchase LUXTURNA™ rather than the treatment center under an outcomes rebate agreement. Spark Therapeutics assumes all drug in-transit, storage and handling risks even as Express Scripts executes the therapy distribution logistics, transaction tracking and billing.""