Accelerating Drug Access: Lyfegen's Innovative Drug Contracting Simulator

In the heart of innovation, where technology meets healthcare, Girisha Fernando, CEO of Lyfegen, stands as a beacon of transformation. We sat down with him to discuss the groundbreaking launch of the Lyfegen Drug Contracting Simulator, a tool set to revolutionize drug access, pricing and contracting.

Fernando begins by outlining the quintessential challenge that spurred the creation of this novel tool. “Drug access, pricing and contracting has been entangled in the complexities of payer negotiations for far too long. Traditional methods like manually modeling pricing and contracting scenarios are not just cumbersome; they’re archaic, in light of the innovative drugs we are seeing, such as gene therapies.”

On the quest for a solution that addresses the underlying issues such as uncertainties that prolong or event prevent access, and finding a win-win scenario that both pharma & payers are happy with, Lyfegen has developed a groundbreaking solution – the Lyfegen Drug Contracting Simulator. The innovation embodies Lyfegen’s ambition to streamline and revolutionize the drug pricing and contracting process.

“What we’ve created is not just a better Excel, but a solution - intuitive, real-time, limitless. It was made to close the gap between old practices and new innovations within the healthcare space. It’s the future of drug access.”

As we delve deeper into the conversation, Fernando's enthusiasm for the simulator's potential benefits becomes palpable. “It’s about accelerating strategies, saving time, and fostering better decision-making,” he asserts. “The Lyfegen Drug Contracting Simulator is a multi-faceted solution that combines drug pricing, contracting, and business case generation, all within a collaborative and innovative framework.” The uniqueness of the Lyfegen Drug Contracting Simulator lies in its features, as Fernando highlights.

“We’re talking about a simulator that not only runs real-world simulations but also provides data-driven insights to empower negotiations.” This level of sophistication, according to Fernando, addresses concerns beyond simple discounts and delves into the nuances of value-based and outcome-based contracting models. What strikes most about Fernando’s vision is incorporating AI to guide users on optimal pricing and rebate models. “In today’s world, the intelligent use of data is crucial. The simulator can help pharma and payers to become more efficient and successful.”

As our conversation nears its end, Fernando touches upon a crucial aspect – data security. “Data privacy is non-negotiable. Lyfegen is committed to rigorous adherence to international data privacy standards and state-of-the-art data security.” Fernando’s final thoughts encapsulate the essence of the Lyfegen Simulator. “The Lyfegen Simulator is a paradigm shift in how the pharmaceutical industry will approach drug pricing. It’s about turning uncertainty into understanding, and that’s a powerful change.”

As we part ways, it’s clear that the Lyfegen Drug Contracting Simulator isn’t just another product launch. It’s a vision brought to life, a testament to Fernando’s belief in the transformative power of technology in healthcare. With this launch, Lyfegen isn't just offering a solution; it's shaping the future of drug access and contracting.

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Learn more about it here.

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A new study investigated how drug rebates affect out-of-pocket costs for health plan beneficiaries. Rebates lower costs for payers, but depending on the health plan, they can raise costs for the patient.

There is a lot of secrecy surrounding the final price paid for a drug at the pharmacy, as official data on drug prices does not factor in rebates or the end price for the patient. The rebates paid by manufacturers to pharmacy benefit managers is not publicly available. The study therefore sought out to understand the relationship between rebates and the prices paid by insurers and beneficiaries.

Results: The negotiated price, defined as the price paid by the beneficiary at the pharmacy and by the payer after rebates are taken into account, rose 4.3% from 2007 to 2020. However, the out-of-pocket price, or that paid by the patient at the pharmacy, rose 5.8% annually. Retail pharmacy prices increased 9.1% annually.

Implications: Low-income families may be especially impacted by plans with higher deductibles and lower premiums, as they are not prepared for surprise costs associated with cost-sharing. As the authors stated: “consumers with a low deductible or capped copays appear to be shielded from steep pharmacy price increases.” The main contributor to increases in out-of-pocket expenses were increasing deductibles and co-insurance payments.

The authors emphasize that drug price transparency is important for health policy recommendations and more work needs to be done to understand drug price inflation.

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Ongoing debate around GLP-1 drug coverage

Payers are seeing increased costs due to the demand of GLP-1 drugs. It’s estimated that 57.4 million adults under the age of 65 could be eligible for this class of drugs, based on currently approved FDA indications. There are 36.2 million people with an obesity diagnosis alone in the US.

If 10% of eligible adults take GLP-1 medications for weight loss, a $15 increase could be seen in the per-member-per month costs. This number rises to $50 if one-third of eligible adults start taking these drugs. Zepbound, manufactured by Eli Lilly, has a list price of $1059 per month, whereas Novo Nordisk’s Wegovy costs $1349 for a one month supply. However, last month, Eli Lilly announced a major price cut for their weight loss drug. Now, a 4-week supply of their drug at 2.5 mg will cost $399, whereas 5 mg vials will cost $549.

The measure is aimed at improving patient access, while reducing the risk of counterfeit medications. This price reduction was made without changes to insurance policies, and the drugs are available through LillyDirect, the company’s online pharmacy.

Not all insurers want to cover weight loss drugs like Zepbound, Wegovy, Mounjaro, and Ozempic, and innovative strategies are being explored to manage costs while keeping them available. One strategy is a utilization cap, which sets stricter standards for who is eligible. Another strategy is mentioned in Evernorth’s EncircleRX plan, which provides a 15% cost cap or a 3:1 savings guarantee when the medication is covered for weight loss.

The value of these drugs is still being investigated. If these medications can provide additional health benefits, there could be additional savings for payers down the road. Of note, studies have found reductions in cardiovascular death and sleep apnea when the drugs were used for weight loss.

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