What payer execs say is most challenging about novel therapeutics, per UPMC

Novel therapeutics are innovative pharmaceutical and biotech products that improve clinical outcomes, but payers face many challenges when deciding whether to cover them, according to a new report from the Center for Connected Medicine at Pittsburgh-based UPMC and KLAS Research.

The March 15 report shared with Becker's includes responses from eight executives working for health insurers or vertically-integrated systems during 30-minute phone interviews from July 2022 to January 2023.

Eight key takeaways:

  1. All health plans are concerned with the rising cost of novel therapeutics, and only one executive said the issue wasn't of "high concern."

  2. Top three challenges with novel therepeutics: Limited incremental efficacy over established standard of care (7 execs), overall budget impact (6), unclear health economic benefit (4).

  3. Smaller plans may be more financially impacted by high therapy costs, and executives said they were concerned that high costs are limiting new treatments to wealthy patients.

  4. Though the criteria to decide novel therapy coverage is complex, executives said their top criteria are: cost effectiveness, coverage by CMS, efficacy, and multicriteria decision analysis.

  5. Top utilization management criteria for novel therapeutics: companion diagnostics, confirmed diagnosis, evidence-based data, and physician/specialist recommendations.

  6. Top incentives for payers when considering novel coverage: compelling data, discounts, and risk-sharing agreements.

  7. Most payers won't cover new treatments just because the FDA has approved it — CMS coverage is the more common standard.

  8. Several of the health plans are developing teams to study biosimilars that could be covered instead of novel therapeutics. One plan said they are also using their PBM to explore how to lower costs.

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