Despite potential to offer cures, advanced therapies come with staggering costs
Marsh and Octaviant Financial, a supplier of novel medicine warranty and payment structures, have collaborated on a new specialized warranty scheme that will allow pharmaceutical companies to improve patient access to gene, cell, and specialist therapies.
According to Marsh, such advanced medicines have the potential to heal uncommon diseases, genetic abnormalities, and malignancies with a single dose. Since 2017, the US Food and Drug Administration has approved 27 such medicines, with thousands more in the works or in clinical studies.
However, each therapy can cost tens of thousands to several million dollars, putting a strain on the healthcare system and limiting patient access, despite the treatments’ potential to reduce overall healthcare costs over time, according to Marsh.
Marsh and Octaviant’s methodology enables pharmaceutical companies to tailor and apply therapeutic warranties to address these concerns. The warranties repay healthcare payers, including Medicare and Medicaid, if an advanced therapeutic treatment fails to produce the predicted outcome for a patient.
According to Marsh, the warranties are also in accordance with the most recent Centers for Medicare and Medicaid Services criteria and state regulations, allowing for payment up to the full cost of the therapy.
In addition, the Marsh/Octaviant initiative gives pharmaceutical clients access to proprietary tools and insights, such as therapeutic actuarial services and Octaviant’s precision finance platform.
“To fully realize the benefits of these advanced therapies, healthcare payers should have meaningful financial recourse in instances where these therapies do not perform as expected,” said Eddit Albers, Marsh’s US life science sector practice head. “A well-structured, compliant warranty issued in conjunction with advanced therapy reduces this risk significantly.” It offers healthcare payers more confidence to fund potentially life-changing therapies, increases access to more patients, and keeps manufacturers motivated to create novel treatments.”
“Implementing successful therapeutic warranties necessitates specialized expertise in disciplines such as corporate strategy, reinsurance, and actuarial analysis,” Octaviant CEO Emad Samad remarked. “Our collaboration with Marsh and the larger Marsh McLennan leverages and consolidates the combined capabilities of both firms under one offering.” Pharmaceutical companies now have a platform to develop innovative warranty programs that, unlike current solutions, are meaningful to payers and encourage better adoption of medications that can save the healthcare system significant money while also improving patient lives.”Marsh’s life science clients who commercialize any medicine, including advanced genes and cell therapies, are eligible for the warranty program.
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