title: Financing a Cure for Diabetes in a Multipayer Environment.
abstract: BACKGROUND
  Financing medical breakthroughs or cures is becoming increasingly challenging in the current fiscal environment.
  
  
  OBJECTIVE
  In this paper, we develop the precise conditions needed for a financing mechanism, HealthCoin, to work between a private payer and Medicare, to incentivize the former to invest in breakthrough therapies or cures in the US.
  
  
  METHODS
  We illustrate the valuation of such a currency for a cure of Type 2 diabetes.
  
  
  RESULTS
  We show that without a HealthCoin, a private payer does not invest in the cure, a small fraction of the patients live up to age 65, Medicare pays for the full price of the cure at age 65 and incurs net loss in returns over the elderly ages, and the manufacturer only sells cures for those who reach age 65. In contrast, a HealthCoin is feasible in this market, incentivizing the private payer to invest in the cure during the non-elderly ages and leading to Pareto improvements for all three stakeholders.
  
  
  CONCLUSIONS
  Discussions around the applicability of HealthCoin for breakthrough therapies on the horizon, such as gene therapies for blindness and hemophilia B, and the feasibility of instituting such payments through new legislations or demonstration projects could be of great value.
authors.affiliation: Pharmaceutical Outcomes Research and Policy Program, Department of Pharmacy and Departments of Health Services and Economics, University of Washington, Seattle, WA, USA. Electronic address: basua@uw.edu.
authors.forename: Anirban
authors.initials: A
authors.lastname: Basu
authors.affiliation: Global Health & Value Innovation Center, Pfizer Inc, New York, NY, USA.
authors.forename: Prasun
authors.initials: P
authors.lastname: Subedi
authors.affiliation: Global Health & Value Innovation Center, Pfizer Inc, New York, NY, USA.
authors.forename: Sachin
authors.initials: S
authors.lastname: Kamal-Bahl
mesh_terms: D000368:Aged; D003695:Delivery of Health Care / Q000191:economics*; D003924:Diabetes Mellitus, Type 2 / Q000191:economics*; D006801:Humans; D007348:Insurance, Health / Q000191:economics; D006278:Medicare / Q000191:economics; D017149:Private Sector; D017150:Public Sector; D012052:Reimbursement, Incentive; D014481:United States
keywords: HealthCoin; cures; diabetes; financing; medical breakthroughs