SummaryWith new cell and gene therapies poised to revolutionize treatment for a growing number of disease states, stakeholders are working to reimagine existing value and reimbursement models to meet the special challenges these breakthrough services present.
Because these therapies are often delivered once, target relatively small populations, and are curative in nature, they are likely to carry a high up-front cost. Traditional coverage strategies developed to support ongoing episodes of care and conventional pharmaceuticals may not apply.
In their place, a new framework may be needed to recognize the transformative nature of cell and gene therapies within the context of value-based care. Third-party hubs and specialty pharmacy providers, along with other types of entities, can play a significant role in addressing some of the issues associated with ensuring patient access to these life-changing treatments.
A Tipping Point
Amid uncertainty about how to define and ensure optimal access and coverage, cell and gene therapies have arrived. The process of altering a living cell or inserting live genetic material into human DNA to replace or inhibit mutated, morbidity-causing cells or genes is moving into practice after decades of research, development, and false starts.
To date, the Food & Drug Administration (FDA) has approved a total of 17 cell and gene therapies for various cancers, viral infections, and inherited disorders. By 2025, the FDA expects to approve between 10 and 20 of these types of therapies a year.
Worldwide, more than 1,000 cell and gene therapy clinical trials are underway, with nearly 700 currently in Phase 2 or 3. By indication, the majority of trials (650) are focused on types of cancer. Analysts predict the market will grow rapidly over the next 5 years, expanding at a compound annual growth rate of 34% to exceed $5 billion by 2025.
Achieving that level of growth will require commercialization strategies that can solve complex problems involving access, coverage, financial risk, and value. Key regulatory updates may be necessary to allow for this expected growth.
A New Approach to Patient Access
Gene and cell therapies are by nature highly targeted to specific patient populations identified by diagnostic tests. As a result, manufacturers’ market strategies will likely encompass predictive analytics deployed across diagnostic and procedure claims data to rapidly identify suitable patient cohorts. Equally important will be establishing ongoing communication and educational channels with both patients and clinicians, as well as creating liaison capabilities to coordinate care.
Similarly, close collaboration with a variety of stakeholders, such as patient advocacy groups and data warehouses, will likely play an important role in addressing a host of critical issues—such as treatment protocols, eligible treatment sites and locations, and long-term patient monitoring. This requires manufacturers to develop new tools and new partnerships to secure and sustain a market for their products while ensuring optimal and effective execution.
Solving the Coverage, Reimbursement, and Value Calculus
Not unlike the impact that disruptive technologies have had in other sectors, the unique characteristics of cell and gene therapies pose significant ethical, practical, and financial questions for healthcare stakeholders.
These uncertainties largely turn on how single-administration treatments that provide life-changing or life-saving cures should be covered, valued, and reimbursed. Payers are likely to factor in amortization and trade-off considerations when weighing the 1-time cost of a such a therapy versus the expense of ongoing hospitalizations and treatments across multiple years.
For payers, self-insured employers, and providers, developing mechanisms to absorb, spread, or mitigate the cost of cell and gene therapies may require stakeholders and government entities to develop new financing tools and strategies. These tools could include the facilitation of annuity payment structures, new stop loss or reinsurance arrangements, or financial pools funded by contributions from governments, plan sponsors, manufacturers, or other third-parties.
Outcome-based agreements may also play a key role in the cell and gene market to reflect the possibility that an intervention may be unsuccessful, especially given the absence of long-term data surrounding the efficacy and side-effects of these products.
Additionally, the chance that a patient will either leave a self-insured company or switch insured plans at some future point presents questions about how best to balance the cost-benefit of initial treatment with long-term treatment value.
Given these considerations, the traditional payment and coverage practices may need to be revised to better reflect the nature of the cell and gene therapy market and its impact on coverage entities and payment programs. This may require both operational improvements, such as the ability to robustly track patient outcomes over time and across payers, and legal and regulatory updates to address a host of federal and state regulatory barriers—including state and federal anti-kickback statutes, beneficiary inducement, and cost-sharing application rules that limit potential access and coverage approaches, particularly in public programs like Medicare and Medicaid.
The Emerging Role of Patient Services Hubs
Just as third-party hubs have played an increasingly prominent role in providing patient support services for biologic and orphan drug pharmaceutical manufacturers, so too are they in a position to meet many of the new demands facing cell and gene therapy stakeholders.
Key functions that hubs can deliver to support the emerging cell and gene therapy ecosystem include:
- Financing, contracting, and reimbursement services
- Provider-enrollee support
- Affordability assistance
- Nurse educators
- Delivery coordination
- Patient and caregiver travel assistance
- Data collection and quality measurement
Manufacturer relationships with third-party entities—including, for example, the outsourcing of data collection and quality measurement functions—have the potential to play an important role in ensuring that existing and future cell and gene therapies can be scaled to broader patient populations.
Shaping the Future
The emergence of viable cell and gene therapies marks a turning point in the evolution of medicine. To realize the potential to cure previously fatal or untreatable conditions at the genetic or cellular level depends on close collaboration between all stakeholders to make sure the treatments remain available and affordable. If your organization is already playing a role in this critical arena or is interested in doing so, contact Avalere today to learn how we can be of help.
Find out the top 2020 healthcare trends to watch.
produces measurable results. Let's work together.