New Brunswick, NJ -- November 21, 2024 -- Octaviant Financial, Inc. (OFX), a recognized innovator in drug warranty and payment models, announced today that Starr Insurance will join Octaviant and Marsh, the world’s leading insurance broker and risk advisor, in offering drug warranty services that enable pharmaceutical companies to stand behind the effectiveness of high-cost therapies. Octaviant will provide its drug warranties under the terms of the partnership through its subsidiary, Actuaria Insurance Services LLC.
With the addition of Starr as the lead underwriter of warranties designed by Octaviant, pharmaceutical manufacturers can now access a full suite of warranty services, including clinical, actuarial, regulatory, legal, accounting, and finance, from a single warranty platform to build a drug assurance program.
Unlike conventional performance contracts negotiated between pharmaceutical companies and intermediaries, warranties designed by Octaviant are issued directly to true end payers, like organizations that sponsor the health plan and pay for the therapy. The warranties reimburse payers, in some cases, up to the full price of the drug should it fail to perform to expectations.
Many advanced therapies hold the promise of curing rare diseases, genetic disorders, and cancers in a single dose treatment. Since 2017, the US Food and Drug Administration (FDA) has approved over 25 such therapies, with hundreds more in preclinical development or clinical trials. Each of these treatments can carry prices ranging from hundreds of thousands to several million dollars, straining the healthcare system with upfront costs despite the potential to lower overall healthcare expenses over time. Because of their costs many payers are also hesitant to authorize the approval of such therapies in fear that they may not work in a particular patient beneficiary. A drug warranty is a simple and efficient mechanism that pharmaceutical manufacturers can utilize to allay payer concerns, stand by the performance of their products, and provide meaningful recovery value when an individual patient fails to achieve the promised benefit.
“Our approach to drug warranties, which has significant advantages over conventional approaches like value-based agreements, requires flexibility and a willingness to innovate as key partner characteristics. Starr exemplifies these characteristics and is well-recognized as an industry innovator. Starr’s awareness of the complex regulatory landscape faced by the pharmaceutical industry supports our clients in offering highly strategic and competitive drug assurance programs,” said Octaviant Senior Vice President, Marc Marion. “Octaviant’s warranties gives payers a tool that can genuinely diminish the risk associated with high-cost therapies and provides a payout to the most deserving party. It simultaneously can achieve significant commercial objectives for the pharmaceutical manufacturer, which includes facilitation of payer authorization and differentiating a product in a competitive market. In this manner a drug warranty benefits all parties, most importantly, the patient, by reducing barriers to essential therapies.”
“High-cost goods and services such as industrial equipment and consumer appliances come with a warranty that lets a buyer recoup some or all of the purchase if the product doesn’t perform as expected,” noted Matt Taylor, Vice President, Extended Warranty at Starr. “The same should be should be true of high-cost therapies. Successful implementation of a drug warranty, however, requires an in-depth understanding of healthcare and insurance that Octaviant, Marsh and Starr now bring together. This unique warranty offering may help encourage greater patient access to life-changing, sometimes life-saving, therapies that might otherwise not have been approved.”
Eddie Albers, US Life Science Industry Practice Leader at Marsh, which will act as a broker and provide reinsurance, actuarial, and related risk consultative services on the platform, added: “Innovative therapies require equally innovative approaches to the market. With this first-of-its-kind platform, clients can unlock the full potential of their drug warranty programs by accessing specialized services through a growing number of aligned partners. We are excited to have Starr join us in this endeavor.”
Marsh and Octaviant announced the initial launch of the warranty solution last April.
Octaviant Financial offers innovative financial, warranty and reinsurance solutions designed to help drug makers, payers and patients manage the cost of gene, cell and specialty therapies. Octaviant’s mission is to facilitate the adoption of transformational therapies by removing significant barriers for payers and patients seeking access. Our core strength is to leverage our combined experiences in the life sciences, finance, insurance, and reinsurance industries to meet our mission. Octaviant’s culture – to be innovative, collaborative, and client-centric – has allowed the firm to develop cutting edge ideas to fuel its proprietary instruments and services offerings. We provide full-service advice to our clients and assist them to think strategically through the most complex challenges facing drug delivery and reimbursement. In doing so, it is our hope that a healthcare system evolves to bring about more cures for patients living with disease. For more information, visit www.octaviantfx.com or follow us on LinkedIn.
Starr Insurance (or Starr) is a marketing name for the operating insurance and travel assistance companies and subsidiaries of Starr International Company, Inc. and for the investment business of C. V. Starr & Co., Inc. and its subsidiaries. Starr is a leading insurance and investment organization with a presence on six continents; through its operating insurance companies, Starr provides property, casualty, and accident and health insurance products as well as a range of specialty coverages including aviation, marine, energy and excess casualty insurance. Starr’s insurance company subsidiaries domiciled in the U.S., Bermuda, China, Hong Kong, Malta, Singapore, Switzerland and U.K. each have an A.M. Best rating of “A” (Excellent). Starr’s Lloyd’s syndicate has a Standard & Poor’s rating of “A+” (Strong).
