Drug Warranty Solutions

An innovative risk management tool that enables pharmaceutical companies to expand patient access to life-changing gene, cell, and specialty therapies

Marsh and Octaviant Financial, Inc., the leading innovator in novel drug warranty and payment models, offer a specialized drug assurance program that enables pharmaceutical companies to expand patient access to their life-changing gene, cell, and specialty therapies.

The high costs associated with advanced gene, cell, and specialty therapies can create barriers for patients and end payers, complicating market access to potentially life-altering treatments. Pharmaceutical manufacturers can offer buyers financial assurance — in the form of warranties — that their therapies will deliver on clinical promises, at the same time protecting their own reputations and business models.

Drug warranty programs, also known as drug assurance programs, are designed to empower pharmaceutical manufacturers to provide robust financial recourse to end payers, enhance market differentiation, and improve patient access, potentially leading to improved patient outcomes.

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Drug Warranties 101

A therapeutic warranty accompanies the sale of a pharmaceutical drug — meaning the terms are set by the manufacturer from the outset and clearly outline the financial recourse available to end payers if the therapy does not meet defined clinical objectives.

Consider a hypothetical drug designed to treat a genetic blood disorder. The warranty for the therapy defines a specific level of improvement or other clinical result for the patient over a defined period. If the goal is not met, the end payer is eligible to file a warranty claim to receive a pre-defined payment from the policy.

A therapeutic warranty solution tailored to you

Marsh and Octaviant Financial, Inc., a designer of drug warranty and payment models, have created a warranty platform for pharmaceutical companies for gene, cell, and specialty therapies (GCTs). Our team of specialists works with you to design a customized warranty that complies with regulations and outlines the details of the specific warranty, including its duration, triggers, and amount of payout.

FAQs

A therapeutic, or drug, warranty program is an innovative risk management tool that provides financial recourse to end payers if a gene, cell, or specialty therapy does not meet its intended clinical outcomes. Drug warranties typically assure that if a particular clinical or health outcome is not achieved during a prespecified time, the manufacturer will reimburse the end payer a predefined amount.

At a high level, a drug warranty is a similar concept to purchasing a warranty with a new retail product. For example, a TV warranty might specify that a manufacturer will repair or replace the unit if it has defects or malfunctions within a certain period.

In a drug warranty, the terms are designed to address the effectiveness of the therapy in achieving specific health outcomes for patients. Instead of covering physical defects, the warranty specifies the financial recourse available to end payers if the drug fails to deliver defined clinical results. Drug warranties are thus highly customized, for example, defining what constitutes a successful clinical outcome, the warranty duration, and the amount of reimbursement or compensation.

This complexity reflects the unique challenges and risks associated with healthcare treatments, making drug warranties more tailored and outcome-focused compared to traditional product warranties.

A well-structured and compliant drug warranty program can benefit:

Manufacturers: Warranty programs can differentiate their products in the market and make end payers more inclined to pay for expensive therapies by providing some assurance of financial recourse in cases of inefficacy. Warranties also provide some measure of reputational protection by showing that manufacturers financially back up their claims.

End payers: Because warranties offer financial protection when clinical end results are not achieved, end payers are more inclined to cover and authorize the use of therapies that provide them an assurance of effectiveness. Being able to recoup some or all of the expense of therapies that do not fully deliver also helps end payers to keep premiums low for plan beneficiaries.

Patients: Warranties foster patient trust and alleviate financial burdens from ineffective treatments in cases where patients are themselves the end payer. This can lead to improved medication adherence, better health outcomes, and increased patient satisfaction.

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How Marsh and Octaviant can help

Marsh and Octaviant’s specialists help you confidently use warranties to address challenges in the pharmaceutical industry while enhancing your product's market position, providing you with:

Risk mitigation: Our team works with you to design comprehensive, tailored warranty programs, balancing the actuarial risk of a program with the ability to spread risk across insurance markets.
Regulatory compliance: We help you navigate and comply with the latest CMS guidelines and relevant insurance regulations.
Strategic insights: We provide valuable insights into market trends, regulatory changes, and payer dynamics to inform your warranty strategies.
Proprietary technology and tools: We offer access to innovative technology to assess risk and optimize warranty structures.
Platform approach: The Marsh/Octaviant program provides clients access to strategic insights and proprietary tools, such as therapeutic actuarial services and Octaviant’s precision finance platform, to bring highly competitive warranties to market.

Our ongoing support and expertise help you implement therapeutic warranty solutions that are suited to your organization and support your continued development of highly effective, and potentially life-altering treatments.

Drug Warranty Solutions

Marsh and Octaviant Financial, Inc., the leading innovator in novel drug warranty and payment models, offer a specialized drug assurance program that enables pharmaceutical companies to expand patient access to their life-changing gene, cell, and specialty therapies.

Risk mitigation

Customization

Market differentiation

Review our article series exploring the use of drug assurance programs in a pharmaceutical environment

Using Drug Warranties to Mitigate Financial Risks of Costly Therapies

Drug warranties, outcome-based agreements, and barriers to costly therapies

Drug warranties: A spotlight on end payers