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ACOs Get In Gear, Accelerating Biopharma’s Value Imperative

Executive Summary

Pharmaceutical companies have been reluctant to discuss their accountable care organization strategies, but the 32 “Pioneer” ACOs created this year could impact the way pharma develops and commercializes its drugs, and their influence will be felt well beyond their current Medicare remit.

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Germany’s Pricing Revolution: Why The World Should Be Watching

Germany’s new early-benefit assessment system for all new drugs launched since Jan. 1, 2011, radically changes the status of Europe’s largest market. It was once a bastion of free (and thus relatively high) pricing, which firms used to signal their drugs’ value to other markets. Now, prices of new drugs will be negotiated between sponsors and the country’s association of statutory sick funds, on the basis of an added-benefit score determined by the G-BA, or Federal Joint Committee. Since those net prices will be made public, and many other countries reference German prices, there’s a real risk of a downward price spiral across Europe.

Germany’s Pricing Revolution: Why The World Should Be Watching

Germany’s new early-benefit assessment system for all new drugs launched since Jan. 1, 2011, radically changes the status of Europe’s largest market. It was once a bastion of free (and thus relatively high) pricing, which firms used to signal their drugs’ value to other markets. Now, prices of new drugs will be negotiated between sponsors and the country’s association of statutory sick funds, on the basis of an added-benefit score determined by the G-BA, or Federal Joint Committee. Since those net prices will be made public, and many other countries reference German prices, there’s a real risk of a downward price spiral across Europe.

How Incentives Are Shaping Medtech’s Future

The US health care system is undergoing substantial change as payors increasingly flex their muscles to move the system from a Fee-For-Service model to an Outcomes-based model. The end result is likely to be a medical device industry comprised of fewer, larger companies working closely with hospitals and physicians to provide integrated patient care. This will impact the types of medical technology companies that will be launched and venture financed going forward. Companies that embrace and enable these industry changes will fare relatively better than those that do not.

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