Tag: Gilead

Writing the Value-Based Contract

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The kiss in the song from classic movie Casablanca is, at its essence, the seal of approval on a relationship.  The kiss is meant to symbolize shared reward (love, potentially) and risk (two souls who share a common set of values but now have new lives) built with other people. The recognizable phrase provides a frame for distilling the rewards (opportunities) and risks in true health care innovation.

Innovative health care solutions, such as new value-based benefit designs or emerging treatment for complex chronic diseases, often deliver tremendous value, but they take time (usually 2-3 years), do not deliver consistent benefits across populations (based upon severity of disease) or reduce total costs consistently (based on geographic influences, for example). Generics are often described as an equal substitute for branded drugs, but this is not always the case. Commercials advertise drugs that purport to make quality of life better (the contract for care), but then the rapid-fire “potential adverse effects” statement overtakes the “superiority message,” in effect reducing the value of the contract.

So when Gilead launched a new drug, Sovaldi, that promised a cure for Hepatitis C (cure = contractual promise, or “kiss”), the market place was excited. Then the spell was broken as obvious risk, the US$84,000 price tag, was revealed.

Gilead has a huge opportunity here.  It can become the true innovator that it claims to be.  It can be the value-driven company that calls for aligning the risks and rewards so that all the parties involved achieve reasonable outcomes.

Curing the highly infectious HepC is a lofty goal for care innovation.  Gilead’s new drug purports to cure HepC within 12 weeks (for certain patients) at the cost of $1000/per day in the US.  The FDA approved the drug and it launched in January 2014. CMS agreed to fund it for Medicare patients with the right profile, which tends to open the door for legitimacy to coverage in the commercial marketplace.

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