KLARITOS Develops Assurance-Based Managed Care Model to Address Critical Inefficiencies in Specialty Drug Spending

MENLO PARK, Calif.--(BUSINESS WIRE)-- KLARITOS announced today that it has developed a transformative managed care model by integrating a precision medicine approach.

Specialty drugs are expensive. The list prices are ca. $50,000-300,000 per patient-year. In all-comers treatment settings, most of these drugs provide disease remission, cure, or excellent response only in 10-30% of patients. The U.S. healthcare system is fraught with critical inefficiencies at the level of treatment, distribution, and payment. These inefficiencies, including the issues of drug pricing and wasteful drug spending, are complex and intertwined.

“We have developed a proprietary managed care platform to address these inefficiencies. The K360^TM platform adopts precision medicine approach on a disease-specific basis. It provides continued touchpoints between approved drugs and patients—from the selection of right therapies from its formulary and prior authorization to continued treatment guidance,” said Vijay Ramakrishnan, CEO and Founder. “The K360 platform eliminates the need for external pharmacy benefit management companies (PBMs) and specialty pharmacies, the entities involved in structuring drug discounts, rebates, and coupons--all of which affect list pricing.”

“We have developed a proprietary assurance product, KlariPay^TM, which provides a priori therapeutic efficacy and financial assurances to our customers—employers and independent payers. Depending on the disease indications, the financial assurance may involve either full or partial limited money-back guarantee,” said Ramakrishnan. “We are actively building our drug formulary and establishing partnerships with employers and payers. We expect to be market-ready in early 2020.”

Some of the distinct features of the model are:

• K360 is an integrated platform that consists of a novel treatment paradigm and efficient drug distribution and payment system;
  • a multi-sided platform with market-making capabilities, connecting multiple users: employers, payers, and patients on the one end, and pharma and diagnostic companies on the other end;
• Klari-PDP^TM: Disease-specific prescription drug plan; the drug formulary will carry specialty drugs for which clear efficacy correlations are observed in stratified subsets of patients;
• Integrated treatment system—comprised of prior authorization, continued theragnostic guidance, and disease & therapy management; and
• Product differentiation features for the drugs included in its formulary.

In rheumatoid arthritis, e.g., our analyses demonstrate that we can achieve significant efficiencies across the entire healthcare system:

• enhanced therapeutic efficacy in 1-2x patients;
• reduced wasteful drug-spending by at least 35%; and
• increased patient therapeutic adherence of >80-90% versus approximately 60%.

SPECIALTY DRUGS are mostly biotech drugs, extensively used to treat cancers, chronic autoimmune and inflammatory diseases, and rare diseases. A significant majority of eligible patients cannot afford these therapies because of high co-insurance amounts, typically 20-25% of list price. Specialty drug spending has become an unsustainable proposition for employers, pension funds, and payers in the U.S., and it could reach approximately $1.7 trillion by 2030.

THERAGNOSTICS provide actionable therapeutic guidance—appropriateness, guidance, evaluation--for a single patient, stratified subsets, and for an entire disease-specific population. This proprietary guidance is integrated across the K360 platform: in drug reimbursement contracts, drug formulary design, prior authorization, disease & therapy management, and KlariPay.

KLARITOS is a privately-held, novel managed-care company specializing in precision medicine. It strives to provide therapeutic efficacy and financial assurances to its customers. A Stanford spin-off, the Company is well positioned to scale its patent-protected platform to autoimmune diseases, inflammatory disorders, rare diseases, and cancers. For more information, visit http://www.klaritos.com.

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