Insights

The Drug Warranty and the Rise of Value Based Reimbursement for High Cost Therapies

When it comes to multimillion-dollar therapies and authorizing patient access, payers are increasingly urging manufacturers to share the risk with a performance-based guarantee.

This comes at a time when new innovations are rapidly approaching commercialization. Case in point, the first CRISPR-based therapeutic could be approved next month by the FDA, providing a transformational and durable treatment to patients living with sickle cell disease.

Octaviant Financial partnering with Marsh

Warranties could smooth path for gene therapies, other high-priced medicines

Octaviant partnering with Marsh to offer transferrable warranties

Gene therapies and other expensive medicines should come with warranties that provide compensation, including for patients’ out-of-pocket costs, if they don’t perform as anticipated. That’s the idea behind a line of business that Octaviant Financial, a financial services company, and Marsh, a multinational insurance brokerage, launched this week.

Use warranties, not outcomes-based agreements, to make payers whole when a gene therapy fails

Use warranties, not outcomes-based agreements, to make payers whole when a gene therapy fails

A decade ago, I had pegged gene and cell therapies as the next frontier. As an investment banker, I was sure they would someday change how patients were treated. But a question from a biotech CEO started me thinking about not only how to pay for them, but how to offer guarantees for these therapies to payers who rightfully wanted reassurances that they were paying for something that works for their beneficiaries.