Novel treatments like gene therapies are fundamentally shifting the outlook for rare diseases and chronic conditions, as well as how we pay for these new types of care. Given the complexity in developing these types of treatments, they often require significant upfront investment, but can help to extend life and avoid hospitalization and other interventions.
Patients switch insurance plans over their lifetimes, so the insurer that pays for treatments today may not see the cost benefits of better health later. The gap between upfront costs and long-term savings may mean insurers are not incentivized to cover transformative but expensive treatments for patients. A new infographic based on a National Pharmaceutical Council peer-reviewed study explains how such gaps can emerge, why we need to close these gaps and how we can work to eliminate them.
Many new treatments have significant upfront costs while delivering benefits, including reduction in health care utilization and costs, over time. For example, new therapies that cure hepatitis C require a significant upfront investment, but are curative and reduce long-term costs compared with years of living with the disease and its complications. The gaps between those upfront costs and their long-term benefits and savings create challenges for employers, insurers, governments and others financing health care and making decisions about coverage. With hepatitis C treatments, the immediate budget implications of covering the treatments led many insurers, including state Medicaid programs, to limit access.
These challenges multiply when considered in the broader context of the health coverage market, including people changing insurers and health plans over time. Government programs are particularly affected, given the large-scale shift of people into the Medicare program upon reaching age 65 and that Medicaid eligibility may change monthly.
The increasing availability of expensive, yet transformative, therapies is likely to widen the gap between the initial payer and the payer that ultimately reaps the downstream benefits.
Learn more about these challenges and how we can address them during NPC’s March 29 webinar, “Health Care Coverage Challenges: New Treatments With High Upfront Costs, Long-term Benefits and Delayed Savings,” featuring a panel conversation with representatives from insurer, patient and research organizations. Register today and be sure to check out NPC’s related infographic and research, "Insurance Switching and the Mismatch Between the Costs and Benefits of New Technologies."