Isgur sees three main gene therapy reimbursement models gaining prominence in this space:
- Outcome-based models that offer rebates if a patient fails to achieve a promised outcome.
- Mortgage-based models that spread the cost of a drug out over time to lessen the shock of paying for an effective therapy.
- Financial support models that help healthcare providers to avoid paying for a gene therapy before administering it to a patient.
“We could also see additional models in this space depending on its evolution, including capitation models to limit the overall cost associated with a therapy and indication-based pricing to allow for a therapy to be paid for based on the disease being treated,” Isgur says. “While interviewing payer executives for this report, what we heard loud and clear was the need for flexibility to help payers afford these treatments, so biopharmaceutical companies may not just offer one model—they may offer several of them.”
There are three things healthcare executives need to know about gene therapy reimbursement, according to Isgur. They are:
- Patient affordability. “The expense of a patient meeting their insurance deductible, paired with the costs of out-of-network providers, time off work for treatment, travel and lodging for treatment, and other lifestyle adjustments could make treatment unaffordable even for some insured patients,” Isgur says. “Especially when 28% of consumers surveyed by HRI who have employer-sponsored insurance said they had $500 or less in emergency savings.”
- Supply chain complexity. Gene therapies rely on precise, temperature-controlled supply chains to get safe and effective products to patients, according to Isgur. “But unlike traditional drugs, the shelf-life of products can be extremely short, requiring advanced capabilities to get a treatment to a specific patient since even a short delay could ruin a product,” he says. “It also requires a great deal of patient coordination, since some patients require medical treatment before being administered a gene therapy, or the gene therapy may involve the patients’ own cells. Executives should think about how to keep track of products and keep patients and providers informed throughout the treatment process.”
- Heightened competition. Academic medical centers are experiencing a decline in revenue and are actively looking for new ways to bring in money, according to Isgur. “In some cases, they actually have the capabilities to research, develop, test, manufacture, and administer their own gene therapies to patients,” he says. “If hospitals can develop and offer gene therapy at a lower price point through reimbursement models, insurers could see them as a more attractive option to lower cost.”