Gene Therapy Advances: What Health Execs Should Know


Gene therapy is leaving its mark, while payers contemplate payment models, value, and efficacy issues.

Although only three gene therapies have been approved in the United States-all in 2017-these innovative treatments are leaving their imprint on the healthcare system.

Novartis’ Kymriah (tisagenlecleucel), a chimeric antigen receptor (CAR)T-cell therapy for certain pediatric and young adults with a form of acute lymphoblastic leukemia  received a nod last August, and Kite’s Yescarta (axicabtagene ciloleucel), a CAR T-cell therapy for non-Hodgkin lymphoma, in October. 

Spark Therapeutics’ Luxturna (voretigene neparvovec-rzyl) for retinal dystrophy, approved in December, is the first gene therapy in the U.S. to be administered directly, delivering a normal copy of the RPE65 gene into retinal cells.

Price tags for these therapies are unprecedented but hardly unexpected. Luxturna sells for $850,000 per course of treatment, Kymriah for $475,000 per course, and Yescarta for $373,000 per course.

Other targeted areas ripe for gene therapy are hemophilia, immune deficiency, and sickle cell anemia, and all are in clinical trials. Strimvelis, which treats a rare immune system disorder called ADA-SCID, or “bubble boy” syndrome, has been approved in Europe but not in the U.S.

How it works

Gene therapy, which restores an abnormal or mutated gene but does not remove or modify defective DNA, introduces genetic material into cells via a carrier called a vector. Vectors are usually viruses that can infect a cell but won’t cause disease. The two primary types of viruses are retroviruses that integrate their genetic material into a chromosome for replication and adenoviruses that enter a cell’s nucleus, the latter most commonly used in cancer treatment.

DNA is injected or given intravenously directly into a specific tissue (in vivo), or cells can be removed, treated in a lab setting, and returned to a patient to make a functioning protein (en vivo). The latter method is used for Kymriah, in which T-cells are genetically modified to contain a protein that targets and kills leukemia cells.

Genome editing, which can facilitate gene therapy, allows DNA to be inserted, deleted, modified, or replaced in a human cell to correct defective DNA. In essence, editing can eliminate problems in DNA and remove deadly inherited diseases. CRISPR-Cas9 (clustered regularly interspaced short palindromic repeats) is the gene editing technology du jour, in which a Cas9 protein performs like molecular scissors, cutting strands of DNA and shutting off the targeted gene.

“Gene editing has tremendous promise; it can fight back against cancer by making cells resistant,” says Ben Solomon, managing director, GeneDx, a genetic testing company.

Thus far in the United States, CRISPR has not successfully fixed a genetic defect in a human patient, but has in human embryos with a mutation that can cause serious heart problems. China is far ahead of the U.S. in deploying the technology with fewer regulatory barriers and has already genetically engineered at least 86 cancer and HIV patients, according to an article in the Wall Street Journal in January 2018. The University of Pennsylvania is awaiting federal clearance to move ahead with the technology.

Next: Challenges





As with any new medical technology, promoting efficacy, safety, and limiting side effects are prime objectives. Terence Flotte, MD, provost dean and professor, University of Massachusetts Medical School, says gene therapy treatments in general could face problems if vectors cannot deliver enough of a correct virus into a sufficient number of cells to make a difference in treating a condition and to uphold safety.

Christos Kyratsous, senior director, infectious disease and viral vector technologies for Regeneron, a biotechnology company, is concerned about how patients’ immune system will respond to gene therapy. “Vectors and/or viruses are foreign to our body; our immune system might start to fight against them and generate a response against it. We are trying to understand this process and exploring ways to avoid it from happening."

KyratsousAnother unknown, adds Kyratsous, is how long a gene therapy will remain effective once delivered.

Sam Falsetti, PhD, head of medical strategy at Cambridge BioMarketing, a communications company specializing in rare orphan diseases, says one of the biggest challenges creating a barrier to gene therapy is the lack of treatment centers across the country.

Payment models

FalsettiOne of the most ambivalent issues surrounding genetic therapy and editing is insurance coverage. Falsetti is unsure whether committing to a million-dollar price tag for gene therapy holds more value than spending money for ongoing patient treatment, maintenance, and care using traditional therapy. He also expresses concern over the economics of a payer covering gene therapy for a member who later moves to another insurer, leaving little time for a payer to recoup its investment.

Spark has three payer programs for Luxturna:

  • An outcomes-based rebate arrangement with a long-term durability measure

  • An innovative contracting model

  • A proposal to CMS under which payments for Luxturna would be made over time

The first arrangement provides rebates to an insurer if patients fail to meet a specified threshold of short-term efficacy, 30 days to 90 days, and long-term durability of 30 months. Spark’s rebates will not exceed those of Medicaid. Harvard Pilgrim Health Care has negotiated with Spark to establish this kind of contract.  


“We are looking at innovative efficiencies by targeting the right population,” says Michael Sherman, MD, chief medical officer. “Luxturna could be life-changing although expensive. It is difficult to pay such a high price if a drug fails.”

To define “value,” he says, it’s critical to look at outcomes compared to costs. “There are medications, such as PCSK9s, that are expensive and effective but only of high value when patients with very high cholesterol take them; otherwise statins would suffice.”

Sherman says Harvard Pilgrim will cover Luxturna despite the price-especially when downstream costs of social services, family support, and the small number of patients are taken into consideration. Coverage will be based on the FDA labeling for the drug, and will expedite claims processing and cap out-of-pocket amounts at in-network limits.

In Spark’s innovative contracting model, a commercial payer’s specialty pharmacy, rather than a treatment center, would purchase Luxturna. In return, a payer would agree to put Luxturna on its formulary. Accredo, Express Scripts’ Specialty Pharmacy is managing the program.

Bill Martin, vice president and general manager, Accredo, says the tab for Luxturna should not be too high for any one insurer, as there are only about 1,000 people with retinal dystrophy in the United States, thus the cost will be spread across many payers.

Harvard Pilgrim has an agreement with Spark to purchase Luxturna directly from the manufacturer and in turn, reimburse treatment centers to administer the therapy.

Martin says this nontraditional model reduces the risk providers and hospitals face in keeping expensive inventory in their possession for such a limited patient population.

Finally, the arrangement with CMS would enable Spark to offer payers an option to spread payment for the drug over multiple years. Otherwise, a one-time payment would tax insurers with tremendous upfront costs, what Martin calls “budgetary shock.” 

“I believe that coverage decisions are based on severity and benefit, but affordability is the big problem so we need to do anything we can to manage costs,” Martin says. He anticipates therapy will be a one-time treatment even though he believes reimbursement is not geared toward a single intervention.

Novartis also has developed a value-based arrangement with CMS in which the manufacturer will only accept full payment after patients respond to Kymriah by the end of the first month of treatment.

Next: Gene testing



Gene testing

Genetic testing has a longer history than gene therapy and came to light in the early 1970s with screenings to detect fetal anomalies, such as Down syndrome and Tay-Sachs disease. The science took a dramatic turn in the 1990s, when mutated genes, BRCA1 and BRCA2, were found to be predictive of breast cancer.

Since then, just a drop of saliva can unearth a person’s genetic history, which might supply information for predisposition to certain diseases. Genetic testing also is used in diagnoses, to determine if a person is a carrier of a specific disease, in newborns to detect metabolic disorders, and for pharmacogenetics.


Karen Lewis, solution management director, Genetic Testing Solution for AIM Specialty Health, a Chicago-based specialty benefits management company and Anthem Blue Cross subsidiary, says there are 65,000 clinical genetic tests; however, most do not have clinical evidence. 

“Our clients struggle with how they can ensure tests done for members make sense based on evidence, and then pay for them while avoiding those that drive up costs for everyone. It’s challenging for providers to keep up-to-date on data,” Lewis says.

To add to the dilemma, she says that there are only 200 CPT codes for those 65,000 tests with many of the same ones used for different tests.

AIM’s Genetic Testing Solution, implemented in July 2017, for fully insured and self-insured members, provides a real-time, automated system that can deliver prior authorizations to doctors and allow them to select tests and labs. Lewis says the new method, which incorporates a requirement for genetic counseling, can reduce paperwork errors and cut average time for submitting and processing claims from days to minutes. The prior authorization provides specific CPT code information to insurers facilitating claim processing.

Prior to the implementation, physicians had to verify test orders against medical necessity requirements and once approved, send paperwork to a lab. It was a post-service review.

United Healthcare has implemented a similar program for genetic and molecular tests, which started last November for fully insured commercial members.


Mari Edlin is a frequent contributor to Managed Healthcare Executive. She is based in Sonoma, CA.

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