Specialty remedy costs within the U.S. are uncontrolled. Regardless of making up about 2% of general prescription quantity, specialty medication accounted for 53% of whole annual pharmacy spending final yr — up from 27% in 2010 — induced partly by progress in oncology and autoimmune medication.
Lyfegen, a startup based mostly in Switzerland and New York, thinks the answer to this drawback lies inside value-based drug contracting. Buyers is likely to be beginning to really feel the identical — on Tuesday, the corporate raised $8 million in an oversubscribed Collection A funding spherical.
Based in 2018, the startup supplies software program for value-based contracting for prime value drugs.
“It’s actually about enabling a future for drug pricing the place the value of a drug relies on the worth that it supplies to sufferers and to the healthcare system,” Girisha Fernando, Lyfegen’s CEO and founder, mentioned in an interview.
Lyfegen’s software program digitizes value-based drug pricing contracts between payers and pharmaceutical producers. Its platform makes use of algorithms to gather and analyze real-world information after which matches these information factors in opposition to contract circumstances. Primarily, the startup guarantees to automate your complete technique of figuring out whether or not a drug has offered advantages to a affected person, in addition to produce an evaluation of the value {that a} drug ought to have relying on the result it has delivered.
“[The platform] automates the entire technique of adjudicating the worth based mostly contract and creates transparency round which medication have labored and which haven’t for every affected person,” Fernando mentioned. “That’s what the platform does, and it does it at scale. You may run a mess of hundreds of contracts on the similar time.”
Lyfegen sells its software program to pharma producers and “any entity that holds drug pricing agreements with producers,” based on Fernando. He mentioned the corporate at present has about 20 prospects.
A few of Lygen’s drugmaker prospects embrace Pfizer, Roche, Novartis, Johnson & Johnson, Merck and Bristol Myers Squibb. The startup additionally has contracts with a state Medicaid plan and a U.S. built-in supply community, Fernando mentioned. The remainder of the corporate’s prospects are European insurers, in addition to one government-run payer in Saudi Arabia.
Lyfegen’s Collection A financing spherical was led by aMoon, with extra participation from Apex Ventures and European household places of work, based on Fernando. With this inflow of funds, he mentioned Lyfegen needs to “massively broaden” its presence within the U.S.
“The problem of drug pricing within the U.S. is admittedly the very best on the earth, sadly,” Fernando mentioned. “Within the U.S., sufferers simply pay three to 5 instances the costs paid elsewhere, and that has a detrimental impact on folks with the ability to afford these medication.”
Rising prescription prices have led practically 40% of Individuals to ration or skip their drugs, based on analysis GoodRx launched in March.
Worth-based contracting is desperately wanted within the U.S. as a result of specialty drug costs aren’t anticipated to come back down anytime quickly, based on Fernando. In reality, Lyfegen’s announcement mentioned that the price of specialty medication within the U.S. rose by 12% from 2020 to 2021 alone.
Picture: Lyfegen
