Challenges in Precision Medicine: Aiming to Align Data, Value, and Costs

Precision medicine—also referred to as personalized, stratified, individualized medicine—delivers targeted treatments to specific groups of patients based on individual characteristics. With precision medicine, targeting the right patient with the right drug at the right dose at the right time can potentially improve patient outcomes and decrease healthcare costs.

Since 2014, these drugs have represented at least 20% of all FDA approvals each year. Examples of 2019 precision medicine approvals included Mayzent (siponimod) for the treatment of relapsing forms of multiple sclerosis, Balversa (erdafitinib) for the treatment of locally advanced or metastatic urothelial carcinoma, and Rozlytrek (entrectinib) for the treatment of metastatic non-small cell lung cancer.

Ensuring access to these products presents a challenge as payers struggle to capture long-term treatment benefits. This is especially problematic in the United States where roughly 20% of patients switch healthcare insurance each year.1

ISPOR’s Precision Medicine and Advanced Therapies Special Interest Group (SIG) has provided critical guidance on issues surrounding approval, payment, utilization, and evidence development related to the use of precision medicine. This group released its report on value frameworks for precision medicine in the May 2020 issue of Value in Health, highlighting the need to understand value drivers, challenges, and opportunities from both patient-level and system-level perspectives to ensure ongoing access to precision medicine products.2

Expanding on the SIG’s recent report, patient and payer representatives shared their views on recent trends in precision medicine and the ongoing challenge to ensure access. Chris Sotirelis, PhD, provided a patient perspective, while Josh Akers, PharmD, BCACP, CPHQ, and Flemming Sonne shared their thoughts from a payer perspective. These contributors highlight the ongoing concerns and objectives that different stakeholder groups face in their ongoing mission to expand access to precision medicine for patients who can best benefit. These payers represent and extrapolate on how precision medicine has evolved recently and how their organizations are addressing these changes.

Patient Voice Helping to Define Value and Stimulate Orphan Drug Development
For decades, Chris Sotirelis, PhD, previously Vice President of the United Kingdom national  thalassaemia patient association, has acted as both a patient advocate and an “expert patient” for rare genetic conditions for a variety of organizations, including the European Medicines Agency. As a patient with b-thalassemia major, an inherited blood disorder in which the body cannot make hemoglobin normally, Sotirelis brings important insight and experience into how patient perspectives may be incorporated into these precision medicine value conversations.

He noted that 20 years ago, there was little patient engagement during coverage and reimbursement conversations. He felt system-level stakeholders expected patients to hold the same goals—that patients merely wanted a wider choice of treatment options and more products to be funded, and therefore their direct opinions were not sought. Instead only clinicians were used to convey what they considered to be patient opinions. “In part, this was driven by the clinicians as well, in that they wanted to have more treatment options,” recalled Sotirelis.

Sotirelis has seen an increase in patient involvement over the past 15 years with expanded support for orphan drug development. Orphan drug legislation, both in the United States and in Europe, has created true incentives for orphan drug development. Patients are now commonly involved in value discussions, being asked their preferences, while also being invited to share their perspective about what constitutes value. These conversations have become increasingly important as public health system budgets buckle under the financial weight of increasingly expensive drugs.

Patient input in these value discussions is critical because he views value as “where a particular product stands on areas that are directly relevant to patients.” He believes that patient preferences should be incorporated into assessment of benefits and risk.

"I think by having an honest, open, and transparent discussion that includes patient perspectives, you can see the uncertainty and the risk in a different way.” —Chris Sotirelis, PhD


In Sotirelis’ view, every step of the clinical development pathway should involve the patient’s perspective of uncertainty. This is especially critical in rare diseases where there is limited understanding of the condition and a lot of variability in the disease due to the heterogeneous nature of these conditions.

Particularly in the case of advanced therapy medicinal products, this is compounded by the variability in the product manufacturing process, which has a definite impact on efficacy and clinical outcomes. This is vital for payers to realize when they are trying to assess reimbursement and could potentially become a powerful tool in price negotiation. He argued that development of these precision medicines requires an understanding of the medical needs of that condition and the medical needs of subgroups within the condition. Preferences of patients with chronic diseases, such as β-thalassemia, where through clinical advancement and innovation, over the years, patients are able to have a near-normal lifespan, differ significantly from those with life-threatening pediatric diseases, such as Duchenne Muscular Dystrophy or Spinal Muscular Atrophy. “This kind of variation between the two extremes has to be reflected because it impacts uncertainty.”

Sotirelis argued for greater involvement and true embedding of patients in all decision-making bodies along the entire clinical development pathway for these therapies. “I think by having an honest, open, and transparent discussion that includes patient perspectives, you can see the uncertainty and the risk in a different way.”

Collaboration is the Key to Easing Disease Burden
Sotirelis encourages more interaction between researchers and patient groups. He noted that until recently researchers have not had many opportunities to connect with patients and understand their viewpoints so that patient perspectives may be incorporated into the development process.

He highlighted his involvement with the Mechanism of Coordinated Access (MOCA), a group of payers from different European member states that work with sponsors and companies during the clinical trial process, discussing the kinds of evidence that may be required to meet payer needs. This process minimizes the likelihood of delays during the contracting process.

He also spoke of his participation with RD-Connect (rd-connect.edu), a European collaboration of scientists, researchers, bioinformatics experts, patients, and public health experts aimed at creating a platform for developing genomic tools and for funding therapies to treat undiagnosed rare diseases.

“I think these collaborations have been very beneficial because it opens up researchers’ eyes to what it means to have a specific condition, how your life is affected by that, and what are the points where researchers and patients can interact in trying to fix certain things to ameliorate this burden of disease.”

Establishing Accurate Expectations
Representatives from 2 different payer types contributed to this conversation. One, a US payer, where patient engagement is comparatively brief given the high frequency with which US patients change health plans, and the other, a European payer that covers patients throughout their lifetime.

Josh Akers, PharmD, Manager of Pharmacy Clinical Programs, Premera Blue Cross in Seattle, Washington, USA, shared his views from a US-payer perspective. Premera is the largest health plan in the Pacific Northwest, covering more than 2 million patients. It has also been a thought leader among US payers in adopting value-based approaches to its contracting processes.

Akers began his thoughts by emphasizing that his organization wants to ensure that their members have access to new precision medicines. “We want to do the right thing,” said Akers. “We don’t want to restrict access.”

He noted that Premera’s insured groups are playing a larger role in expanding access for new precision medicine products. “We have customers asking about very specific products,” he said. “They want to know if the client’s insured group includes anybody who is on some of these new gene therapies. They want to know what they should expect and what will the impact be when this therapy comes out.”

Premera and its clients must predict how these new precision medicine therapies may impact their budgets given how these budgetary changes may affect premiums, deductibles, and benefit plans, especially with self-funded groups.

“I think there’s a lot of interest in being very clear in our predictions about expected costs, patient experience, and outcomes.” —Josh Akers, PharmD


To better predict the budgetary effects of precision medicine drugs, Akers stated that payers need to better understand who the potential patient population is and how that population is represented within their membership. And they need to understand both long-term and short-term treatment effects in that population.

Akers revealed that payers may have limited understanding of the rare diseases targeted by many of the new precision medicine therapies due to lack of comparative treatment data, availability of treatment guidelines, etc. “When we’re looking at our entire membership, we need to know how does demand for these therapies align with our membership?” These products could have a tremendous impact on small insured pools or a relatively small impact on large insured groups.

Manufacturers’ prevalence calculators can be immensely helpful, Akers noted, especially when predicting the budgetary impact of new therapies for large insured groups. However, smaller insurance pools, where treatment for 1 or 2 members could total hundreds of thousands, even millions, of dollars, has a huge budget impact. Akers said, “How do these small groups pay for that?”

Treatment Benefit Complicated by Client Turnover
Premera and their clients also want to clarify treatment expectations: What constitutes “benefit” with precision medicine? Is a new therapy truly meeting an unmet therapeutic need? And over what timeframe? “Is the precision medicine therapy going to reduce their cost over the next 2 years? Over the next 4 years? Six years? If this is a true curative therapy or near-curative type of therapy, what should Premera’s expectations be?” asked Akers.

“I think there’s a lot of interest in being very clear in our predictions about expected costs, patient experience, and outcomes.”

For US payers, the question of treatment benefit is complicated by a pattern of frequent turnover in insurance membership rolls. “You may need to look out 2 years, 4 years, 5 years to really see a benefit. That’s where the real return is.” But as Akers emphasized, members may have long left Premera by year 5, having switched jobs or moved. In this case, will contracts between Premera and its insured groups cover these treatment benefits?

Establishing Value and Minding the Gaps
According to Akers, Premera recognizes that there are many ways to consider value—understanding the unmet clinical need, including the history of disease, the disease burden placed on individuals, and current treatment options. He noted that ICER reports hold influence over how Premera looks at the value of therapies as they come onto the market. He continues, “We want to include other reviews that may be available. Beyond our own analysis, can ICER and other independent reviews help us establish the value of these therapies, and what kind of fair market pricing should we expect?”

Akers recognizes that manufacturers may differ with ICER’s conclusions. However, he emphasized that Premera welcomes manufacturers’ arguments regarding ICER’s analyses. “We are definitely open to listen. We want to hear the argument.”

Gaps in value assessment continue to concern Akers. He noted that nonmedical, humanistic benefits may not be fully incorporated into the value determination of precision medicines. Akers added, “What we don’t see is real-world data on the impact on quality of life. Do patients have more productive workdays? Better quality of life?”

Akers emphasized the importance of patient perspective in evaluating new treatments. Premera highlights its work with patient advocacy groups. “We want to take patient feedback into consideration. We want to hear their perspective,” he stated. While these groups often voice an eagerness to gain access to precision medicine therapies, Akers notes that these patient groups sometimes reveal patients’ hesitancy regarding new products, especially when there may be well-established, safe treatment alternatives. Alternatively, treatments filling a significant unmet need, especially in pediatric conditions where there may not be a treatment alternative that may change the trajectory of someone’s life, are usually a top priority to patient advocacy groups.

Limiting Risk, Increasing Access
Flemming Sonne, CEO, Amgros, Copenhagen, Denmark, expanded on Akers’ system-level perspectives, providing the views of a payer with longer-term patient engagement. While the Danish Medicines Council approves new medicines and determines their added clinical value, Amgros negotiates pricing contracts for all prescription drugs within Denmark.

In his work to make precision medicines accessible and affordable, Sonne discussed Amgros’ work with innovative pricing models. Sonne spoke to the challenge of ensuring access to these products given the limited data on long-term efficacy. “We would like to see the effect of the product before actually accepting to use it fully.”

“Under this kind of arrangement, we get an exit door in the contract if the patient’s treatment doesn’t work.” —Flemming Sonne


He emphasized the need for risk-sharing arrangements to overcome the financial uncertainty of a drug’s first few years on the market, stating, “We have to find a way where we will only accept a limited amount of risk with the new product.”

During a products’ initial 2 years on the market when data are sparse, Sonne proposed that manufacturers, or even hedge funds, could assume some of this initial risk by accepting a discounted price until a clearer picture of a product’s long-term efficacy comes into view.

“I think in this case we may go into the negotiation suggesting paying a fifth of the contract in the beginning (ie, only a part of the contract). Then we will follow the quality of patient outcomes.” Sonne noted that this discount would be critical, especially given the significant costs of administration for these contracts associated with increased data collection.

“Under this kind of arrangement,” Sonne said, “we get an exit door in the contract if the patient’s treatment doesn’t work.”

Amgros has also employed the Netflix model in contracts for these newer therapies, paying a monthly fee for a specific number of patients. He emphasized the uncertainty surrounding which party may benefit most from this model, noting “The manufacturer could be the winner or we could be the winner because we actually don’t know how many patients will be in the treatment.”

Premera is also examining methods to possibly share risk. “I think we have to look at multiple methods. Are there opportunities for outcomes-based rebates or other opportunities for value-based contracts?” said Akers.

One possible approach Akers suggested may be a warranty agreement, such as those used by some providers for total joint replacements. He suggests that with precision medicine drugs, a single treatment providing curative, near curative, or long-term solutions that could help vastly improve someone for the rest of their life, a warranty agreement or other guarantee could be an option.

Data: To Wait or Not to Wait
Insufficient data complicate negotiations over these alternative pricing models for precision medicine drugs. Data used for regulatory approval differs greatly from data needed for access and reimbursement. “We don’t have the evidence or the real-world data in a way to follow (treatment effects),” said Sonne. “But we try to find some models and we work with it.”

Sonne emphasized the complicated task of accessing data. “We know that the data are there. But the way they have set it up at the moment doesn’t work, so we can’t get the data out of the system.”

For high-priced treatments, the lack of efficacy data can limit early access. “The medicine council are quite cool at the moment if you don’t have the data (for a drug with) a very high price with 40 or 50 patients treated. They wait.”

He highlighted the case of orphan drug, Spinraza nusinersen. “As an orphan drug, we don’t have the data. That’s why we haven’t accepted full use of Spinraza until now.”

But Sonne also reflected on the potential ramifications of limiting early access as they await better efficacy data. “Waiting for better efficacy data will cost the lives of some of patients. But on the other hand, it could be that we save some lives.”

The Key to a Long-Term Future Is Short-Term Data
Both Sonne and Akers spoke to what they would like to see from manufacturers. And both voiced the same desire: more data early in process.

“We need access to important data to make accurate calculations based on the price agreements,” said Sonne. “However, we know that several good initiatives have already been taken to make this possible within the near future.”

Akers continued. “We want the data to show the clear markers on how this improves outcomes. What are the real-world outcomes—emergency room visits, inpatient admissions, morbidity/mortality—that are going to improve? We need to know what we can monitor to make sure these are the highest value therapies within these disease states.”

“Waiting for better efficacy data will cost the lives of some of patients. But on the other hand, it could be that we save some lives.” —Flemming Sonne


Akers reiterated this call for timely data on outcomes and timeframes. “We need to know as early in the development of a drug as possible what outcomes we can expect.” He continued, saying, “When we’re looking down the road, how do we make sure that patients are getting those benefits within these contracts? What are the checkpoints? Can we pull that data to be able to look at it?”

However, Akers noted the challenge faced by manufacturers in producing these data, especially for precision medicine drugs. “This is one of the toughest things for a lot of the manufacturers and researchers in general. It takes a long time to get these data, and they may not have as much long-term outcome data yet in the process of making these therapies available for patients.”

To help their organizations prepare for these new therapies, both Amgros and Premera invest resources in horizon scanning and in monitoring the drug pipeline. “It’s really trying to monitor what’s coming down the line and what adjustments are we going to need to make with the precision therapy?” said Akers. In Denmark, Sonne noted that his organization employs horizon scanning to help estimate future year budgets.

Akers notes that monitoring the pipeline for precision therapy products requires additional resources because these therapies are “so specific and have a very unique impact on the niche populations that that they’re designed for.”

Looking at the Partnership of Payers and Manufacturers
Akers welcomes manufacturers bringing their creative ideas about pricing and contracts for these new therapies, such as offsetting risk, as well as how to address members switching insurance plans. For example, how can payers help ensure that patients continue to receive the benefit of a therapy, even when they’re switching plans?

Sonne echoed Akers’ openness to input from manufacturers during this period of expanded use of precision medicine. “We need a lot of good ideas from the industry. We listen to them. We see them as a partner for us.”


1. Cunningham PJ, Kohn L. Health. Plan switching: choice or circumstance? Health Aff (Millwood). 2000 May-Jun;19(3):158-164. doi: 10.1377/hlthaff.19.3.158. PMID: 10812794.
2. Being precise about precision medicine: What should value frameworks incorporate to address precision medicine? A report of the personalized precision medicine special interest group. Value Health. 2020 May;23(5):529-539.

About the Author
Michele Cleary is a HEOR writer in Minneapolis, MN.


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