Systems and methods for structuring the financing of high cost therapies

Abstract

Presented herein are systems and methods for structuring the financing of high cost therapies such as GCTs to address the issues of high-upfront cost (affordability), uncertain durability of the treatment, and portability/transferability of the liability. In certain embodiments, the systems and methods described herein involve a combination of (a) a uniquely-designed, multi-year structured loan that facilitates portability, (b) a performance-based guarantee of efficacy in the form of a value based agreement that may be tied to the tenure of the loan, and (c) securitization of the loan.

1 . A method for assessment of an application for an instrument, and
 upon approval, for determination of one or more terms of the instrument, for financing one or more of (i), (ii), and (iii) as follows (collectively, the HCT financing):   (i) a high cost therapy (HCT) to be administered to a HCT beneficiary,   (ii) bundled expenses for pre- and/or post-therapy therapeutic treatments and/or services rendered to the HCT beneficiary related to an underlying medical condition of the HCT beneficiary addressed by the HCT, and/or monitoring and/or analysis of the efficacy of the HCT administered to the HCT beneficiary, and   (iii) an associated performance-based guaranty of the efficacy of the HCT administered to the HCT beneficiary,   wherein said instrument is structured in a manner to facilitate portability of said instrument over the tenor of the instrument, the method comprising:   (a) receiving, by a processor of a computing device, a first set of data of the application for the instrument from a remote client computer; and
 (b) determining, by the processor, according to one or more factors, an approval of and/or a structure of the instrument using the first set of data, said determining performed such that: 
 (i) said HCT financing comprises bundled expenses for pre- and/or post-therapy therapeutic treatments and/or services rendered to the HCT beneficiary related to an underlying medical condition of the HCT beneficiary addressed by the HCT, and/or monitoring and/or analysis of the efficacy of the HCT administered to the HCT beneficiary, said bundled expenses being compensated for a contractually-defined episode of care, wherein said episode of care is a time period associated with the HCT for which a bundled payment is made; and 
 (ii) said HCT financing comprises a multi-year repayment period having a tenor that ends contiguously with a defined episode of care, wherein said episode of care is contractually defined to establish a pre-existing condition of the HCT beneficiary, thereby facilitating portability and/or transferability of associated liability from one party to another party while the HCT beneficiary is considered to have the pre-existing condition; 
   (c) dynamically updating, by the processor, at least one of the one or more factors accounted for in step (b), such that the determination in step (b) accounts for one or more changing factors and permits the determination in step (b) to be made where time permitted to reach a decision is short; and   (d) transmitting, by the processor, the determination in step (b) to the remote client computer.   
     
     
         2 . The method of  claim 1 , further comprising:
 (e) identifying a bundle of cash flow receivables arising from HCT financings to include in a securitization basket and determining one or more terms of the securitization basket.   
     
     
         3 . The method of  claim 1 , wherein the high-cost initial treatment is a drug having a National Drug Code (NDC) that identifies mechanism of payment via the HCT financing. 
     
     
         4 . The method of  claim 1 , wherein step (b) comprises determining, by the processor, the structure of the instrument, wherein the instrument comprises a multi-year payment plan having a tenor that matches said episode of care, and wherein the payment plan comprises:
 an upfront draw to be paid upon administration of a high-cost initial treatment to the HCT beneficiary, and   a second, subsequent payment to be made upon a final close of the payment plan following and contingent upon a determination of initial efficacy of the HCT for the HCT beneficiary.   
     
     
         5 . The method of  claim 4 , wherein the final close is in an amount that covers the remainder of the cost of the HCT, which may or may not include the associated services, less a holdback to be paid by the manufacturer of the high cost initial treatment. 
     
     
         6 . The method of  claim 5 , wherein the payment plan comprises a senior tranche amortization period, and wherein the holdback is subordinate to the senior tranche. 
     
     
         7 . The method of  claim 4 , wherein the upfront draw is paid off upon a determination of initial non-efficacy of the initial treatment in the HCT beneficiary. 
     
     
         8 . The method of  claim 1 , wherein step (b) comprises determining, by the processor, a structure of the instrument of the HCT financing based on one or more of the following: total cost of the HCT; credit rating of a borrower; current debt service of the borrower; assessment of ability of the borrower to collateralize the instrument; assessment of financial solvency and cash flow generating capability of the borrower; assessment of desire of the manufacturer to provide subvention; amount, if any, of manufacturer holdback; projected efficacy of the HCT; nature, cost and terms of an associated warranty; duration of the warranty; the existence, if any, and cost of a current, non-HCT or HCT standard of care therapy; level of an interest rate benchmark for a variable rate loan; prevailing market interest rates for loans of similar tenor and risk profile; market-wide default rates; existence, if any, of prepayment penalties; and size of any upfront draws. 
     
     
         9 . A system for assessment of an application for an instrument, and upon approval, for determination of one or more terms of the instrument that forms part of a high cost therapy (HCT) financing, the system comprising:
 a processor of a computing device; and   a memory having instructions stored thereon, wherein the instructions, when executed by the processor, cause the processor to:   (a) receive a first set of data of the application for the instrument from a remote client computer;   (b) determine, according to one or more factors, an approval of and/or a structure of the instrument, said determining performed such that:
 Ii) said HCT financing comprises bundled expenses for pre- and/or post-therapy therapeutic treatments and/or services rendered to the HCT beneficiary related to an underlying medical condition of the HCT beneficiary addressed by the HCT, and/or monitoring and/or analysis of the efficacy of the HCT administered to the HCT beneficiary, said bundled expenses being compensated for a contractually-defined episode of care, wherein said episode of care is a time period associated with the HCT for which a bundled payment is made; and 
 (ii) said HCT financing comprises a multi-year payment plan having a tenor that ends contiguously with a defined episode of care, wherein said episode of care is contractually defined to establish a pre-existing condition of the HCT beneficiary, thereby facilitating portability and/or transferability of associated liability from one party to another party while the HCT beneficiary is considered to have the pre-existing condition, 
   (c) dynamically update at least one of the one or more factors accounted for in step (b), such that the determination in step (b) accounts for one or more changing factors and permits the determination in step (b) to be made where time permitted to reach a decision is short; and   (d) transmit the determination in step (b) to the remote client computer.   
     
     
         10 . The method of  claim 1 , wherein said HCT financing is a payment plan. 
     
     
         11 . The method of  claim 1 , wherein said HCT financing is a loan. 
     
     
         12 . The method of  claim 1 , wherein said HCT financing comprises an upfront draw paid to a party that provides and/or administers the HCT to the HCT beneficiary and is made at or near the time of administration of the HCT to the HCT beneficiary, and wherein said HCT financing comprises a second draw paid within an agreed-upon period of time after administration of the HCT and upon determination of initial efficacy of the HCT for the HCT beneficiary. 
     
     
         13 . The method of claim  19 , wherein said upfront draw is an initial use of proceeds and said second draw is a subsequent use of proceeds. 
     
     
         14 . The method of  claim 1 , further comprising:
 (e) identifying a bundle of loans to include in a securitization basket and determining one or more terms of the securitization basket.   
     
     
         15 . The method of  claim 1 , wherein step (b) comprises determining a structure of the instrument of the HCT financing based on one or more of the following: total cost of the HCT; credit rating of a creditee; current debt service of the creditee; assessment of ability of the creditee to collateralize the instrument; assessment of financial solvency and cash flow generating capability of the creditee; assessment of desire of the manufacturer to provide subvention; amount, if any, of manufacturer holdback; projected efficacy of the HCT; nature, cost and terms of an associated warranty; duration of the warranty; the existence, if any, and cost of a current, non-HCT or HCT standard of care therapy; level of an interest rate benchmark for a variable rate loan; prevailing market interest rates for loans of similar tenor and risk profile; market-wide default rates; existence, if any, of prepayment penalties; and size of any upfront draws. 
     
     
         16 . The method of  claim 1 , wherein said HCT financing comprises an upfront draw paid to a party that provides and/or administers the HCT to the HCT beneficiary and is made at or near the time of administration of the HCT to the HCT beneficiary. 
     
     
         17 . The method of  claim 1 , wherein said HCT financing comprises a premium payment for a value based agreement (VBA) structured as a performance guaranty of initial efficacy of the HCT for the HCT beneficiary. 
     
     
         18 . The method of  claim 1 , wherein said HCT financing comprises a second draw paid within an agreed-upon period of time after administration of the HCT and upon determination of initial efficacy of the HCT for the HCT beneficiary. 
     
     
         19 - 20 . (canceled) 
     
     
         21 . The method of  claim 1 , wherein said HCT financing comprises a value based agreement having a period that ends contiguously with a defined episode of care, wherein said episode of care is contractually defined to establish a pre-existing condition of the HCT beneficiary, thereby facilitating portability and/or transferability of associated liability while the HCT beneficiary is considered to have the pre-existing condition. 
     
     
         22 . The method of  claim 1 , wherein the one or more factors dynamically updated in step (c) comprises one or more of the following: (i) data regarding a total cost of care, which includes one or more of the following: costs charged by a formulating pharmacy, cost charged by a therapeutic manufacturer, and a value-based agreement premium; (ii) a determination period for determination of initial efficacy of the HCT for the HCT beneficiary, (iii) data regarding timing of cost of care over the determination period, (iv) an amount and/or percent of an upfront draw, (v) data regarding a borrower and/or its credit data, (vi) data regarding the manufacturer preferred loan terms, which includes one or more of the following: amount and/or timing of cash payments, and size and/or timing of holdback terms; (vii) the stated and/or probabilistically calculated efficacy of the HCT; (viii) data on an associated warranty, which includes one or more of the following: its nature, its cost, and its terms; (ix) prevailing variable interest rate floors established by a benchmark; (x) current market interest rates for loans of similar tenor and risk profile; (xi) market-wide default rates; (xii) pre-determined penalties for pre-payment; and (xiii) aggregate and/or individual risks. 
     
     
         23 . The method of  claim 1 , comprising auto-filling an offer term sheet and/or loan agreement document by the processor.