Marsh, Octaviant partner on warranty program for advanced therapies
Marsh, Octaviant partner on warranty program for advanced therapies | Insurance Business America
Life & Health
Marsh, Octaviant partner on warranty program for advanced therapies
Despite potential to offer cures, advanced therapies come with staggering costs
Life & Health
By
Ryan Smith
Global insurance broker Marsh and Octaviant Financial, a provider of novel drug warranty and payment models, have partnered on a new specialized warranty program that enables pharmaceutical companies to expand patient access to gene, cell and specialty therapies.
Such advanced therapies have the potential to cure rare diseases, genetic disorders and cancers in a single-dose treatment, Marsh said. Since 2017, the US Food and Drug Administration has approved 27 such therapies, and thousands more are currently in development or clinical trials.
However, each treatment can cost from tens of thousands to several million dollars, which can burden the healthcare system with upfront costs and limit patient access, despite the treatments’ potential to lower overall healthcare expenses over time, Marsh said.
Marsh and Octaviant’s program allows pharmaceutical manufacturers to customize and implement therapeutic warranties to mitigate these concerns. The warranties provide healthcare payers – including Medicare and Medicaid – reimbursement should an advanced therapy treatment fail to yield the expected outcome for a patient.
The warranties are also compliant with the most recent Centers for Medicare and Medicaid Services guidelines and state regulations, allowing for reimbursement up to the full cost of the treatment, Marsh said.
The Marsh/Octaviant program also provides pharmaceutical clients access to proprietary tools and insights, such as therapeutic actuarial services and Octaviant’s precision finance platform.
“To fully realize the benefit of these advanced therapies, healthcare payers should have meaningful financial recourse in instances where these therapies do not perform as expected,” said Eddit Albers, US life science industry practice leader at Marsh. “A well-structured, compliant warranty, issued in conjunction with an advanced therapy, substantially mitigates this risk. It gives healthcare payers more confidence to cover potentially life-altering therapies, expands access to more patients, and maintains an incentive for manufacturers to develop innovative treatments.”
“Implementing successful therapeutic warranties requires specialized expertise in disciplines like corporate strategy, reinsurance, and actuarial analysis,” said Emad Samad, CEO of Octaviant. “Our collaboration with Marsh and the larger Marsh McLennan leverages the combined capabilities of both firms and consolidates them under one offering. Pharmaceutical manufacturers finally have a platform to create differentiated warranty programs that, unlike current solutions, are meaningful to payers and drive greater utilization of therapies that can save the healthcare system significant cost and improve patient lives.”
The warranty program is available to Marsh’s life science clients that commercialize any pharmaceutical, including advanced genes and cell therapies, Marsh said.
Have something to say about this program? Let us know in the comments below.
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