Healthcare payers and leading pharma companies, including Novartis, Roche, MSD, Bristol Myers Squibb (BMS) and Johnson & Johnson, use Lyfegen’s value-based contracting software. The healthtech startup announced an oversubscribed $8 million Series A financing round led by aMoon, with additional participation from APEX Ventures and others.
Currently, less than 2% of the health insurance population requiring speciality drugs is responsible for 51% of drug spending. The cost of speciality drugs in the US is spiralling out of control, increasing 12% from 2020 to 2021 alone, with no sign of slowing down due to the increase of cell and gene therapies expected to come to market. As a result, value-based contracting is becoming a more viable alternative for healthcare payers to only pay for drugs that actually work.
By 2025, total net medical spending in the US is expected to reach $400B. Additionally, new drugs regularly enter the market, but when pharmaceutical companies fail to agree on commercial terms with payers, patients are at risk of being denied access to life-saving therapies.
Lyfegen’s platform helps regulators, pharma companies, and payers more easily adopt value-based payment models by digitizing the end-to-end process of data collection, anonymization and contract negotiations for all parties to agree upon drug pricing and reimbursement. With Lyfegen’s patent-pending platform, health insurances & hospitals can implement and scale value-based healthcare, improving access to treatments, patient health outcomes and affordability.
“We are excited to be announcing this funding round and to have this vote of confidence from aMoon, APEX and our other investors who understand the shift in healthcare that we are experiencing, and are supporting our efforts to expand the Lyfegen platform,” said Girisha Fernando, CEO and founder of Lyfegen.
The funds from the latest financing round will enable the startup to drive down drug costs and help patients access life-saving medications. Elaborating more on the company’s next plans Girisha said, “We currently work with leading government payers, health insurance companies in Europe, the US and the Middle East, and some of the world’s largest pharma companies. Our plan now is to further expand our presence in the US, partnering with both private and public healthcare insurance companies. The move away from volume-based healthcare has never been more needed, and we are happy to play an important role in the shift to value-based contracting.”
(Press release)
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