CAR-T Therapy Pioneers 'Pay-for-Performance' Model with Up to ¥600,000 Refund Amid Repeated Exclusion from National医保 Negotiations
Fosun Kairos
Developer of Tumor Immune Cell Therapy Technologies and Products
Product indications continue to be approved, and the sales of the same product overseas are growing significantly. However, the CAR-T listed company's value has continued to drop, losing 95% compared to its high point in 2021, with a market cap now less than 1 billion Hong Kong dollars.
"What is the 'main culprit'? There is no doubt that it is the exorbitant price and the unresolved innovative payment. This is also something that all CAR-T companies in China cannot reach."
Fosun Kite was the first to take the initial step. On January 11, it announced the launch of "China's First Lymphoma Value-Based Payment Program for Yikai Da," in collaboration with Chenxi Health, a health management and patient service platform under Sinopharm Holding. According to the plan, eligible patients who do not achieve complete remission (CR) after using Yikai Da will receive a refund of up to 600,000 RMB for the CAR-T treatment, which originally costs 1.2 million RMB per injection—effectively halving the price. Although there is still some distance to go before reaching an implicit negotiation threshold, this marks a significant step forward.
According to reports，This program will be China's first innovative payment model for lymphoma drugs based on efficacy value, and Yikaida will also become China's first bio-innovative drug paid for based on efficacy value.
Extending from CAR-T, in recent years, the research and development of innovative drugs in China has generally fallen into an "involution" arms race. Meanwhile, in the medical market dominated by public hospitals, the much-anticipated payment system reform has yet to be implemented. If the business model of "paying for efficacy" can successfully become widespread, it might not only be a way out for companies to "save themselves," but also bring good news to many patients.
In the view of Chen Yi, a professor and researcher at the Institute of Hospital Management of Tsinghua University, the pharmaceuticals industry is a high-investment, high-risk sector.Without payment innovation, technological innovation is bound to be suppressed.Currently, the global market places significant emphasis on the research and development of CGT. Particularly, the rapid advancement of gene and cell therapy technologies in China has positioned the country at the forefront worldwide. "Out of the nine CAR-T products approved globally, five are from Chinese companies. If payment innovation does not keep pace, it may impact the sustainable development of innovation in China."Has a significant impact."
Unlike traditional chronic disease medications that require lifelong use, CAR-T therapy, as a one-time curative treatment, is not only expensive but also requires a one-time upfront payment. On the other hand, due to its personalized nature, there is uncertainty regarding clinical efficacy.These peculiarities introduce uncertainty into the assessment results of traditional health technology evaluation methods. Therefore, innovative payment models, such as pay-for-performance, are commonly used internationally. There are mainly two types of innovative payment methods used globally.
Among them, the international Payment for Performance (P4P) is a results-based payment agreement: if effective, the health insurance pays; if ineffective, the company bears the cost. Another model is Coverage with Evidence Development (CED), which offers conditional temporary reimbursement. Under this model, health insurance provides a provisional payment standard for new drugs while requiring pharmaceutical companies to collect real-world data within a specified period. The health insurance then evaluates the efficacy based on real-world clinical evidence and adjusts the payment criteria accordingly.The characteristic of the P4P model is that the price and profit of a pharmaceutical company's new drug are directly linked to the performance of the drug's efficacy in real-world clinical use.
Innovative Payment for CAR-T in China, such asHuimin Insurance and Special Drug Insurance have made significant breakthroughs --Insurance for CAR-T efficacy was launched in 2021.。But for a long time, the focus of domestic discussions on CAR-T payment, commercial insurance, or medical insurance has been more onOn how to control costs, rather than completely focusing on such asHow to evaluate the therapeutic effect.
Fosun Kite's move is seen by industry insiders as a potential bridge to close the gap between technological innovation and payment innovation. From a business perspective, this is also Fosun Kite’s pricing strategy to address competition from newcomers. As technology becomes more widely used, matures, and clinical experience accumulates, paying based on efficacy to achieve cost control may become the direction for the future. This shift in thinking is also seen as driving the enhancement of efficacy-based payments towards more refined management.
But this is just passing the first hurdle. Returning to the practical level, there are still many issues that need to be resolved.
Since the payment is based on efficacy, how is the efficacy determined? Who evaluates it? How can the evaluation criteria be made clearer? Additionally, in case of disputes, who resolves them and how?Jin Chunlin, director of the Shanghai Health Development Research Center, raised this series of issues that still need to be observed and resolved with E-Pharm Manager.
"These are all very practical issues." In the view of Jin Chunlin,Efficacy evaluation and dispute resolution may become a very important part in the future.The industry also needs to consider how to continuously improve the quality of medical care and how medical institutions can find the right population to use innovative products, thereby realizing their true value.
Chen Yi also raised some questions. Besides who will prove its effectiveness,Who will collect the data?In the past, the industry had already set its sights on paying by efficacy, but one of the main reasons it has not been implemented is the insufficient capability for efficacy evaluation and data collection. Since the monitoring and evaluation process of "paying by efficacy" is extremely complex, it inherently involves higher project management costs.
She observed that there are already quite a few related practical cases internationally.Although all are based on efficacy, namely real-world data, the phased indicators reached and set by the two parties of efficacy agreements in different countries are not entirely the same.For example, in 2017, the U.S. CMS began paying for Novartis' Kymriah based on its efficacy. The agreement stipulates that as long as the patient responds within one month of receiving the treatment, CMS will cover the full cost. France adopts a phased payment approach at 28 days, 100 days, six months, and every six months thereafter.
More importantly, Chen Yi raised a key issue,Since payment is based on efficacy, it will inevitably involve refunds if the efficacy does not meet the expected standards. For instance, under a co-payment mechanism involving commercial insurance and personal contributions, refunding the patient's portion is relatively straightforward. However, if the process goes through the social security mechanism, the current funding structure and characteristics of China’s social medical insurance system mean that the medical insurance department lacks the function of collecting fees and cannot directly receive refunds from enterprises.
Therefore, in order to promote payment by efficacy and further drive the technological innovation of new drugs in China,She looks forward to a policy breakthrough in the refund mechanism in the future.What kind of refund mechanism would be more appropriate? This question also involves all parties, such as how to implement the refund mechanism, whether a national special refund account can be established, and at the same time, use this refund fund as a national medical insurance adjustment special fund?
This is also a significant constraint and promotion for medical institutions. Jin Chunlin also pointed out another major issue: the prevention of abuse. "For medical institutions, encouraging technologies with genuine efficacy, improving medical quality as much as possible, and achieving promised outcomes will lead to compensation. At the same time, this prevents abuse, which is also beneficial for saving medical insurance funds."
The significance lies not only in this. Chen Yi put forward her own expectations,If commercial insurance can carve out a replicable and highly operational path in China, it may also bring some inspiration to the domestic medical insurance system in the future. Further efforts could be made in the integration of medical insurance and commercial insurance, thereby improving payment for expensive technology sectors.
Jin Chunlin also proposed an idea, suggesting that in the future, it may be possible to explore a method that combines with the reimbursement of basic medical insurance. This could further evolve into a payment model based on the number of patients using the product. Once the volume is high, it might allow for further negotiation with the medical insurance department. "Companies can commit to pricing models such as: how much for 100 people, how much for 1,000 people. Identify a price range that both the medical insurance side and the company can accept. What would be the approximate price for 10,000 people? And what about for 20,000 people? This would encourage companies to reduce costs."
Everyone is waiting for the final results of this pilot, but at least it's a good start.
Not a New Concept
As early as 2007, the UK's National Institute for Health and Clinical Excellence (NICE) approved a risk-sharing agreement for the multiple myeloma drug Velcade proposed by Janssen-Cilag.The agreement will allow patients who show a complete or partial response after up to four treatment cycles to continue receiving treatment, with full reimbursement by the UK National Health Service (NHS). Anyone showing minimal or no response will lose eligibility for drug reimbursement, and the full cost of the medication will be reimbursed by the pharmaceutical company.
Following the agreement, Celgene launched Revlimid (lenalidomide), also used for multiple myeloma. The agreement will have the NHS cover the costs of treatment for the first two years, while Celgene will bear the costs for any patients requiring treatment after two years. This agreement ensures that the NHS can effectively predict the maximum cost per patient, while guaranteeing no restriction on the supply for patients requiring long-term treatment.
Novartis quickly grasped the essence as well. In 2015, Novartis's heart failure treatment drug Entresto was approved for marketing by the FDA.This drug was priced at about $4,500 per year when it was first launched in the United States, exceeding the affordability of many patients and leading to sales performance below expectations.In 2017, Novartis changed its pricing strategy, proposing to price Entresto based on its real-world clinical performance: increasing discounts if the expected efficacy is not met, and decreasing discounts if the efficacy exceeds expectations.With the support of big data and other technologies, the new payment solution has been successfully implemented, and the market performance of Entresto has also rapidly improved.
The difficulty in the above series of cases lies in how to solve the intermediate technical problems.Multinational pharmaceutical companies have sufficient motivation to actively test the waters in order to promote new drugs.Although China has similar policies, due to the lag in the development of the innovative drug industry at the same time, there are significant differences in specific implementation: for imported drugs, the main approach is to use insurance to share risks for patients; additionally, restrictions are placed on medical institutions with the aim of promoting fairness and saving medical insurance funds, rather than promoting innovative drugs.
China's first efficacy insurance appeared in 2017, for BMS's hepatitis C drug, with Huatai Insurance as the insurer.One course of treatment is set at 24 weeks, followed by a 12-week follow-up. If the treatment is ineffective, part of the medication cost will be compensated, with a premium of 9.9 yuan.
In terms of medical institutions, in 2017, Zhejiang Province took the lead in implementing a value-based medical insurance payment model for liver transplant surgeries. This approach focuses on covering patients with end-stage liver disease who have clinical treatment value. Based on the feasibility of clinical care, it scientifically delineates the scope of medical insurance coverage for liver transplants and innovatively establishes a "risk-sharing" mechanism between medical insurance and hospitals.In principle, the longer the patient survives after surgery, the more medical insurance compensation the hospital receives.
For example, if the patient does not survive for the agreed 3-year period, the medical insurance will not fully compensate the hospital.On the contrary, if the patient survives beyond the agreed 3-year period, the health insurance will provide excessive compensation to the hospital.The excess compensation of medical insurance costs refers to the corresponding costs deducted from the insufficient compensation.
In addition, most of the explorations in pay-for-performance have appeared in special diseases treated by Traditional Chinese Medicine (TCM). To date, regions such as Shanghai and Zhejiang have been exploring this approach to address the unfair distribution between TCM and Western medicine, where "same disease, same effect, but different prices" occurs.Taking fracture treatment as an example. Traditional Chinese medicine (TCM) mostly adopts manual reduction and splint fixation, while Western medicine tends to rely more on surgical treatment, which generates higher costs related to examinations, tests, medications, and consumables, resulting in a significant difference in the compensation received by practitioners of each approach. Promoting a "TCM payment mechanism based on therapeutic value" can not only save expenditures for medical insurance but also encourage hospitals to expand their TCM services.
The same type of policy has shown completely different effects and application scenarios. Fundamentally, this still reflects the backward development of innovative drugs in China at that time.
But now, as China's innovative drug research and development gradually reaches international first-class levels, the payment mechanism naturally needs to start aligning with international standards.This is not only to cope with the domestic competition in China, but also to prepare for "expanding territory" globally.Before Fosun Kite, insurance products covering the efficacy of CAR-T were launched in 2021. Insurance products such as "Jinghui Bao", "Suhui Bao", and "Special Drug Insurance" from China Pacific Insurance have already included CAR-T drugs in their compensation coverage.The specific terms of each insurance company are different. Some commercial insurance products provide disease progression coverage for members who have upgraded their benefits package, and empower family members to apply for a 12-month installment drug purchase service with zero interest and zero fees.Some pharmaceutical companies are trying other methods, such as cooperating with innovative payment platforms to offer patients installment payment options or medical loans.
Compared to relying on insurance companies for empowerment, this move by Fosun Kite was largely driven by the company itself. From various perspectives, it has taken a crucial step forward.Everyone is waiting for the final results of this pilot, but at least it's a good start.
Reply "Sustainable" to learn more about the e-journal.
Featured Recommendations
