Friday, October 28, 2022

How the Therapy Warranty Model Shifts the Paradigm of Therapy Success

Today’s guest post comes from Brooks Wildasin, Vice President of Product Management at CareMetx.

Brooks introduces us to CareMetx’s specialty therapy warranty, a specialty patient outcome-based contract model. Download CareMetx’s 2022 Report: The Evolving Landscape of Digital Healthcare Hubs to learn more about digital hub services and CareMetx’s solutions that improve the patient journey.

Read on for Brooks’ insights.

How the Therapy Warranty Model Shifts the Paradigm of Therapy Success
By Brooks Wildasin, Vice President of Product Management, CareMetx

The challenges associated with delivering specialty therapies to patients are well-known to both providers and payers within the healthcare ecosystem. Many of these medications can be costly, causing challenges with patient adherence, lengthy approval times, and numerous other hurdles.

Recently, CareMetx introduced the specialty therapy warranty, a solution that can help drive alignment between stakeholders within the healthcare ecosystem—primarily manufacturers and payers—with the mutual goal of driving positive outcomes for patients on specialty therapies.


The general premise of a therapy warranty is similar to that of warranties we’re familiar with in other markets. In the case of a healthcare warranty, the manufacturer of a therapy elects to guarantee certain therapeutic outcomes. That way, if these outcomes are not achieved, the warranty is there to help offset additional healthcare expenses (e.g., additional therapeutics, treatments), to remedy the fact that the therapy was not as effective as expected.

We've seen a lot of evolution in the healthcare warranties market over the last couple of years. Changes to the Centers for Medicare and Medicaid Services (CMS) Medicaid Best Price Reporting rulings and regulations have helped in providing payers, providers and patients with other options in paying for therapies, as well as sharing in the efficacy and durability risk. These changes removed some of the barriers that notoriously limited what types of innovative models (such as warranties) could be put in place.

Ultimately, the goal behind our CareMetx therapy warranty is to foster an industry-wide reevaluation of how stakeholders can tie the cost of therapies more directly to positive patient outcomes.


Warranties are value-based contracts that have been around for many years. But traditional value-based contracts in healthcare (particularly those involving specialty therapies) can be difficult to administer. They can place additional burdens on patients and providers. In addition, I’ve observed that traditional value-based contracts are frequently grounded in attractive price points, rather than grounded in a goal of reaching specific outcomes. This makes this model impractical to apply to something like specialty therapy efficacy.

This observation has led to a call for a more holistic approach to delivering specialty therapy warranties. For example, if a specialty therapy is highly efficacious but comes at an upfront high cost, it most likely reduces the total cost of care for patients. Thus, it is much more valuable to the healthcare ecosystem as a whole and merits wider implementation. With the advent of therapy warranties as an outcome-based contract model as opposed to a value-based contract model, the outcome of a therapy and its overall efficacy and performance can be tied to the underlying cost of that therapy over time.


The therapy warranty model can also drive greater alignment between the interests of payers and manufacturers. When new therapies enter the market (whether they are novel or in areas where other therapies exist), there are typically many questions around their efficacy and durability. This often leads to slower adoption of these therapies, as they must be reviewed by each stakeholder in their own manner and in their own time.

The therapy warranty allows manufacturers to stand behind specialty therapies and “guarantee” that certain results are going to be achieved by the patient population. This eliminates many of the questions around the therapies themselves and helps to support and supplement the available data (e.g., clinical trials).

In bridging these gaps and ensuring that therapies will perform, greater alignment between the interests of payers and manufacturers is more readily achieved.


As of today, it seems this therapy warranty solution is favorably received by both payers and manufacturers. Over many years, payers have been asking for ways to differentiate between specialty therapies, and how to represent and support them based on the available clinical data. Having warranties in place drives a greater exchange of data regarding specialty therapies, thus providing payers and manufacturers with more information on how to support and represent these therapies, respectively.

For patients, the therapy warranty solution ultimately means that they will be able to get access to effective therapies more quickly, since many of the impediments on the payer side that held up the initiation of treatment will be addressed sooner. Warranties also serve to mitigate some of the concerns that patients themselves have around the efficacy of a treatment (due to the existence of the warranty).

Finally, therapy warranties can benefit patients in that payers’ reduced exposure allows them to afford better pricing and discounts to patients, since the payers have a much higher level of confidence that a given therapy will produce the desired patient outcome.

For more information on innovative solutions that improve the patient journey download CareMetx’s 2022 Report: The Evolving Landscape of Digital Healthcare Hubs.

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