Gene therapy involves introducing genetic material into cells to compensate for abnormal genes or to make a beneficial protein. However, this is a very costly treatment option, and questions remain on how to structure payment. During a presentation at the AMCP Annual Meeting, Sophie Schmitz, BA, MA, managing partner at Partners4Access in Amsterdam, the Netherlands, discussed payment models and strategies for managing drug spend when incorporating gene therapy.
The following are commonly used models to pay for gene therapy:
- Annuity‐based (staged), which is a popular model under consideration to soften the near‐term impact on healthcare budgets, while providing sufficient return for investors. Innovator companies become de facto banks, and this method can be combined with outcomes‐based agreements. This helps payers spread payments over time and offers manufacturers a more normal revenue stream.
- Reinsurance, which minimizes the financial uncertainty of high payouts for individual patients, but there are challenges surrounding who will provide the insurance and how it be financed.
- Outcomes-based, for which payments are conditional based on patients reaching predefined milestones and targets. However, manufacturer revenue is at risk depending on the long-term effectiveness. This was used at launch for both tisagenlecleucel and voretigene neparvovec.
- Milestones, in which payments are based on the achievement of specific events, such as therapeutic response.
Staged payment models address short-term budget impact, but not affordability, as the cost of gene therapy can reach $1 million per year.
Despite different payment options, challenges remain for payers, including the possibility for disproportionate costs to some payers, uncertainty surrounding long-term outcomes, and overall affordability.
Questions also remain for patients, such as portability (what happens when a patient’s insurer changes), privacy (surrounding the collection and sharing of patient data), and copay and costs that are not covered by insurance (including expenses related to treatment in a specialist center).
U.S. manufacturers also face challenges related to policy (price reporting implications, revenue recognition), data (tracking data, communicating and sharing data across organizations), and market dynamics (fragmented market, patient movement from one health plan to another).
Payer concerns may result in slow or inadequate reimbursement, and cashflow concerns may impact uptake and access to these therapies. This could limit the number of hospitals that are willing to administer gene therapy, resulting in unequal access to gene therapies based on geographic location.
Ultimately, payment models for gene therapies will depend on the treatment archetype: novel breakthrough, orphan disruptor, oncology product, and quantum leap, said Ms. Schmitz. Novel breakthroughs are treatments for a small disease population for which there is a high unmet need and no alternative therapies, but some medical standards of care exist for the condition. She said the budget impact is probably manageable with outcomes-based staged payment, and this may be attractive to payers if the long-term effect is very uncertain. Orphan disruptors are treatments for orphan diseases that have an established treatment pathway. The existence of a standard of care in the disease space can complicate payment for gene therapies. The budget impact may be manageable with outcomes-based staged payment, but only if the therapy is used in newly-diagnosed patients. For oncology products, such as chimeric antigen receptor T-cell therapies, the budget impact will likely be manageable with outcomes-based staged payment. Lastly, the quantum leap is treatment for indications that impact large cohorts of patients, such as cardiology, metabolic disorders, neurology, and rheumatology, which would result in a significant cost burden. Outcomes-based staged payments may ease the pressure, but the overall budget impact is the key concern.