As cell- and gene-based therapies become available for new and expanded indications with a higher incidence of patients, payers will be challenged to find ways to provide access to patients.
One-time cell and gene therapies are providing therapeutic options to patients with cancer and rare disease. In June 2023 alone, two gene therapies were approved to treat patients with Duchenne muscular dystrophy (Elevidys) and hemophilia A (Roctavian).
“These are pretty amazing medications, and the impact on society and the healthcare system is significant," David Baker, Pharm.D., director of clinical sales at Abarca, said during a session at the Pharmacy Benefit Management Institute’s annual conference in Orlando.
Currently there are just a handful of million-dollar cell and gene therapies available to treat rare diseases. But that is going to change in just a few short years. The pipeline is full, with more than 500 gene-based therapies that could be approved for new and expanded indications with a higher incidence of patients.
IQVIA Institute for Human Data Science expects that 55 to 65 cell, gene and RNA-based therapies will launch globally by 2027, and U.S. spending on cell, gene and RNA-based therapies could rise to $12 billion by 2027.
But figuring out how to pay for these cell and gene therapies has payers concerned, Baker said. In one survey, half of payers see gene therapies as a top concern, he said. Recently gene therapies now $2 million and $3 million.
“We’re supposed to be making sure that we’re providing access and appropriate access to these medications. We're in the role of making sure that we're providing the right drug to the right patient at the right time, and safety, a safe and cost-effective manner.”
Baker said gene therapies have the potential to be cost-effective. For example, last year, the FDA approved Hemgenix, the first one-time gene therapy for patients with hemophilia B, which is priced at $3.5 million. Hemgenix delivers a gene that when expressed produces factor IX protein. But payers today cover the costs of weekly infusions of factor IX for these patients at a cost of $10,000 a week, more than $500,000 annually, Baker said.
Payers and health plans are concerned about fronting the cost for a treatment when patients may not be with the plan the following year. Additionally, the cost of the gene therapy itself is not the only concern that payers have. Adding to costs is any specialized care before treatment and patient monitoring after treatment. And cell and gene therapies often have to be administered in specialized centers with trained clinicians.
“Cell therapies require a patient’s cells to be harvested before treatment,” Baker said. “Patients may require chemotherapy or radiation. They may need to travel to a specific hospital, and they may need to be monitored for weeks or months for different side effects. This is a considerable burden on the payer.”
In his presentation, Baker reviewed potential strategies for covering cell and gene therapies. One option for self-funded plans is stop-loss insurance, which supports the employers in case of transplants and other catastrophic medical claims.
Baker said many traditional stop loss insurers don’t sell coverage for gene therapy, or if they do cover gene therapy, it’s for a single year. “The next year, however, the employer group may have to carve out that patient. This presents a hurdle and a real complication for that employer, especially if the patient experiences complications later or a loss of viability of that therapy.”
Baker said he has seen newer companies enter the market to fill the gap providing specific stop-loss for cell and gene therapies. But there are questions about how large the premiums and deductibles for these policies could be.
“If you take this approach, you’re going to have to make sure you have good underwriters, people who know how to understand the risk that that specific employer group,” Baker said.
Another option for providing coverage for cell and gene therapies is through vertically integrated health insurers and PBMs that would be able to carve out coverage for cell and gene therapies and be able to secure access to stop-loss programs. The larger players, he said, are likely to be able to access established provider networks and are better equipped to spread risk.
Evernorth, for example, offers a program called Embarc Benefit Protection, which offer protection against the costs of a gene therapy for an additional per member per month charge. The company said it shields payers and provides no additional out-of-pocket costs for patients.
“We don’t know the impact yet of these programs,” he said. “It’s a wait and see because these are relatively new programs.”
A third strategy for providing coverage is delegating to third-party consultants with stand-alone provider networks and where pharmaceutical companies share in the risk when the outcome doesn’t meet expectations. “You have third party entities subject matter expertise in these conditions and how to properly underwrite and estimate the risk for employer groups. One con is those entities may form provider networks with hospital systems that have been certified and may not be part of your hospital network.