Insurance broker and risk advisor Marsh Octaviant Financial, Inc., an innovator in novel drug warranties and payment models, have partnered together to offer a specialised warranty program to pharmaceutical manufacturers that develop gene, cell and specialty therapies.
This new warranty solution, available to Marsh’s life science clients commercialising any pharmaceutical therapies, will enable drug makers to back their high-cost therapies should they fail.
The cost for advanced therapies treatments can run as high as several million dollars, which can strain the health care system with upfront costs and bar patient access, despite the potential to lower health care costs over time.
The Marsh/Octavian program aims to ease these concerns. The warranties will reimburse health care payers, including Medicaid and Medicare, should an advanced therapy treatment fails to deliver the expected medical outcomes on a given patient, Marsh explained.
In addition to the warranties, the program will provide pharmaceutical clients access to strategic insights and proprietary tools, such as therapeutic actuarial services and Octaviant’s precision finance platform, to bring competitive warranties to market.
Each warranty program and funding mechanism will be tailored to an individual pharmaceutical company.
“To fully realise the benefit of these advanced therapies, health care payers should have meaningful financial recourse in instances where these therapies do not perform as expected,” said Eddie Albers, US Life Science Industry Practice Leader, Marsh.
“A well-structured, compliant warranty, issued in conjunction with an advanced therapy, substantially mitigates this risk. It gives health care payers more confidence to cover potentially life-altering therapies, expands access to more patients, and maintains an incentive for manufacturers to develop innovative treatments.”
Emad Samad, CEO, Octaviant, added: “Implementing successful therapeutic warranties requires specialised expertise in disciplines like corporate strategy, reinsurance, and actuarial analysis. 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 utilisation of therapies that can save the health care system significant cost and improve patient lives.”
