An analysis of member retention patterns for adult rare disease cohorts to support evaluating multiyear payment arrangements for novel therapies.

Abstract

BACKGROUND: Traditionally, treatment for chronic conditions addressed symptoms or was disease modifying and required lifelong periodic administration and recurring costs. Cell and gene therapies for rare diseases often require a short administration period relative to their expected long-term clinical benefit. Costs have historically been recognized when the service or treatment is administered, resulting in the potential for the cost associated with the possible long-term clinical benefit of cell and gene therapies being incurred during a short administration period. Innovative payment arrangements have been proposed to improve the synchronization of the payment and the emergence of the clinical benefit. Expected payments associated with a multiyear payment arrangement will depend on many factors, but key drivers of the payments include efficacy, durability of effect, mortality, and member retention. This research extends a previous study by analyzing member retention for adult patients with certain rare diseases. OBJECTIVE: To develop member retention estimates from a US commercial payer s perspective for adults diagnosed with certain rare diseases during a 10-year period. METHODS: Four population cohorts were examined: (1) self-insured - all subscribers, (2) self-insured - rare medical condition, (3) fully insured - all subscribers, and (4) fully insured - rare medical condition. Seven rare medical conditions were prospectively selected: cerebral palsy, cystic fibrosis, Gaucher disease, hemophilia, sickle cell disease, spina bifida, and thalassemia. We limited the study cohort to members who were either the subscriber or the subscriber s partner and were aged 18 years or older; dependent children were excluded from the analysis, regardless of age. The IBM MarketScan Commercial Claims and Encounters research database for the 10 years ending December 31, 2016, was used as the basis for the analysis. The analysis was completed using the lifetest procedure available in version 9.4 of the SAS Software System for Windows. The Kaplan-Meier method was used to produce retention rates. A log-rank test with chi-square statistic was used to determine statistically significant differences between pairs of curves. RESULTS: The study found that the subscriber retention for the rare medical condition cohort is significantly higher than the all-subscribers cohort by at least 12 points at each 1-year period. The finding was statistically significant (P < 0.0001) for the self-insured and fully insured cohorts. At year 5, approximately 20% more of the rare medical condition cohort was retained as compared with the all-subscribers cohort regardless of payer type. In addition, the study found that the probability of retention for adults with each rare medical condition in the rare disease cohort was also statistically significantly higher than all subscribers regardless of payer type. CONCLUSIONS: In multiyear payment arrangements, it may be important to set expectations for member retention based on studies specific to particular member cohorts. Health insurers and plan administrators may have inaccurate expectations if standard assumptions based on all member populations are used. This study found that adults diagnosed with 1 of 7 rare medical conditions are retained longer, on average, than all adult subscribers. DISCLOSURES: Milliman received funding from bluebird bio for the conduct of this study and fees from AveXis, outside the submitted work. Jackson, Runyan, and Metz are employed by Milliman. Jackson and Metz are members of the American Academy of Actuaries and meet the qualification standards for performing the analyses in this report. Kenney is an independent managed care consultant and received consulting fees from Milliman during the conduct of this study; Kenney also serves as preceptor for the Massachusetts College of Pharmacy and Health Sciences, is immediate past president of the Academy of Managed Care Pharmacy, and is a member of the Massachusetts Pharmacists Association Legislative Committee.