The ascent of cell and gene therapies (CGT) over the past few years has been astonishing. Almost three dozen marketed cell and gene therapies are now available globally. However, the road to a seamless reimbursement system for CGT in the US is still rocky. When surveyed, both payers and developers list considerable limitations around program complexity, information tracking burden, insurance, regulatory barriers, and government price/reporting requirements. At the same time, at Certara, we believe a sense of optimism is warranted if we pay attention to the most recent position of the Centers for Medicare & Medicaid Services on innovative contracting, as well as the activity of trailblazers in the market in recent years. Gilead, Novartis, AveXis, Spark, and Kite are among the leading developers who have pioneered functioning reimbursement models, driving patient access to their transformative therapies within the status quo.
Unlike most drugs which are taken chronically by patients, CGTs are often only administered just once as a long-lasting, potentially lifetime treatment. Without question, collapsing decades worth of potential cost-offsets into a single administration of a drug may produce considerable up-front budget hits for some payers. The actuarial challenge isn’t entirely new, however, as payers have already found effective mechanisms to pay for complicated, high-cost surgeries, which are also sudden, one-time events from a budget perspective. Third-party stop-loss insurers do offer services that can provide relief for incident populations as well. Finding ways to set up predictable costs ahead of time is key in helping to alleviate payers’, and in turn employer groups’, concerns about a broader pipeline of 10-18 therapies coming to market in the next 18 months.
To prevent shock claims for employers and plan sponsors, Cigna started bundling services from its Pharmacy Benefit Manager Express Scripts (PBM), medical management, and specialty pharmacies to offer health plans the ‘Embarc Benefit Protection platform’, a network for two gene therapies with possible expansion to other marketed products. Members pay a $12 monthly fee per patient. CVS Health (with insurer Aetna and through PBM Caremark) responded by launching a similar service.
Further innovation is in progress. Leading developers are engaging with payers, employer benefit consultants, financial entities, and other non-traditional actors to collaborate on the next generation of payment models. New kinds of commercial players may emerge to serve so far unmet market needs. Such new entities may seek to combine the risk-bearing of reinsurers with the contracting capabilities of PBMs, distribution facilities and provider network building, and medical management capabilities of insurers.
While paying-over-time arrangements coming from the developer are challenging today, such payments can be administered through a third party. Under current regulations, payment over time in Medicaid conflicts with States’ obligations to deliver balanced budgets. Notably, the one bipartisan legislation in the last Congress, the Senate Finance Committee drug bill (Grassley/Widen), enables Medicaid plans to amortize the cost of delivering curative gene therapies over time. Several floor amendments from both sides doubled down on the notion, and there is strong likelihood for a commonsense consensus with a new Democratic Administration.
In the long-term, health insurance portability is not as big a barrier as it may appear today. 25-30 million Americans are estimated to live with a rare disease already, with diagnosis rates rising. For every rare disease patient insurers lose today where they paid for CGT, they will likely gain a new patient who’s on therapy over time. Furthermore, research shows that the churn in orphan populations tends to be much lower. Rare disease patients tend to stay with their insurance for five to seven years. At the current cost to treat one hemophilia A patient ($500,000 annually at the current standard of care), a novel gene therapy with a $2M price tag would already be cost-effective within years.
Balancing the insurance pool is important, but considering advances in epidemiological analytics and prediction, it should not become the next new reason to avoid entering value-based agreements. Regulation may furthermore address portability concerns. Some have suggested that essential health benefits under the Affordable Care Act (ACA) to function as purveyors, drawing on the protections of preexisting conditions to provide a basis for coverage requirements if gene therapy is considered as the standard of care.
As they prepare for the new reality, successful developers are well advised to identify and simulate real-world effectiveness in populations of interest, pressure-test program designs with their customers, and then adequately provision for monitoring and adjudication systems with market participants, old and new. Our recent engagements with leaders at some of the most innovative companies leave us hopeful: Pockets of the future already exist in the present.
Certara experts have completed more than 60 gene and cell therapy assessments in the last few years. Get in touch with our Evidence & Access team today to discuss your product’s successful path to patient access.