Specialty remedy costs within the U.S. are uncontrolled. Regardless of making up about 2% of total prescription quantity, specialty medication accounted for 53% of complete annual pharmacy spending final yr — up from 27% in 2010 — precipitated partially 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. Traders is likely to be beginning to really feel the identical — on Tuesday, the corporate raised $8 million in an oversubscribed Sequence A funding spherical.
Based in 2018, the startup gives software program for value-based contracting for prime price drugs.
“It’s actually about enabling a future for drug pricing the place the worth of a drug relies on the worth that it gives to sufferers and to the healthcare system,” Girisha Fernando, Lyfegen’s CEO and founder, stated 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 knowledge after which matches these knowledge factors towards contract situations. Primarily, the startup guarantees to automate your entire means of figuring out whether or not a drug has offered advantages to a affected person, in addition to produce an evaluation of the worth {that a} drug ought to have relying on the end result it has delivered.
“[The platform] automates the entire means of adjudicating the worth based mostly contract and creates transparency round which medication have labored and which haven’t for every affected person,” Fernando stated. “That’s what the platform does, and it does it at scale. You possibly can run a large number 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,” in keeping with Fernando. He stated the corporate at the moment 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 stated. The remainder of the corporate’s prospects are European insurers, in addition to one government-run payer in Saudi Arabia.
Lyfegen’s Sequence A financing spherical was led by aMoon, with extra participation from Apex Ventures and European household places of work, in keeping with Fernando. With this inflow of funds, he stated Lyfegen needs to “massively broaden” its presence within the U.S.
“The problem of drug pricing within the U.S. is absolutely the very best on the earth, sadly,” Fernando stated. “Within the U.S., sufferers simply pay three to 5 occasions the costs paid elsewhere, and that has a detrimental impact on folks having the ability to afford these medication.”
Rising prescription prices have led almost 40% of Individuals to ration or skip their drugs, in keeping with analysis GoodRx launched in March.
Worth-based contracting is desperately wanted within the U.S. as a result of specialty drug costs should not anticipated to return down anytime quickly, in keeping with Fernando. The truth is, Lyfegen’s announcement stated that the price of specialty medication within the U.S. rose by 12% from 2020 to 2021 alone.
Photograph: Lyfegen