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FDA’s plan to evaluate gene therapies’ impact on surrogate end points is amping up concerns among payers. Here’s why
The FDA’s plan to evaluate gene therapies’ impact on “surrogate end points” in order to speed up the review process and bring these therapies to market sooner, is amplifying concerns among payers.
Surrogate end points are often chemical or biological changes that are thought to be predictive of broader benefit, such as a reduction in LDL cholesterol and a connection to fewer myocardial infarctions. Reviewing surrogate end points-such as increased clotting factor levels instead of clinical endpoints like bleed rates-allows for shorter clinical trials and faster development.
“The FDA appears to be using this strategy only in certain categories at first, with hemophilia being an initial target,” says Jeremy Schafer, PharmD, senior vice president and director of Precision for Value’s Payer Access.
The FDA, payers, and manufacturers are no strangers to using surrogate markers as efficacy end points, according to Matthew Majewski, vice president in Life Sciences Practice at the global consulting firm CRA.
“Some of the most widely-known surrogates are LDL-cholesterol for cardiovascular disease and HbA1c for diabetes which are respectively linked to coronary heart disease risk and glucose control,” says Majewski. “These surrogate end points allow products to get to market years faster and with smaller clinical trial costs but carry the risk of not illuminating the full clinical benefits and risks of the product in development.”
The FDA appears to be growing more comfortable with current research and development efforts for gene and cell therapies but it still seems unlikely that it will go out on a limb and allow for any surrogate end points that have not been validated or accepted as part of the current clinical development paradigm, according to Majewski.
Payment without proof
“Payers have been living with the realities of surrogate markers and are very likely not to be excited by this development,” he says. “As an example, with the launch of the PCSK9 inhibitors, payers found themselves paying for these products years before the release of cardiovascular outcomes trials which were less desirable than originally hypothesized. This was even more starkly felt a decade ago when Zetia and Vytorin were unable to show outcomes benefits despite millions of patients being prescribed those products.”
However, a survey, presented at the recent Academy of Managed Care Pharmacy meeting (AMCP annual meeting, Boston, April 23 to April 26), conducted by Precision for Value, shows that payers are not ready. About one-third of the respondents, 25 managed-care medical or pharmacy directors, have yet to have had experience with delivery of new cell and gene therapies and half of them said that the therapies have had minimal impact on plan spending so far.
“The primary concerns of payers regarding gene therapy were selecting appropriate patients and the potential need for retreatment in patients in the event that gene therapy effects wane,” Schafer says. “The use of surrogate end points by the FDA will likely heighten both of these concerns. Surrogate endpoints do not always result in more positive clinical end points later on. For healthcare execs, this new FDA strategy means that payers will still pay a significant price for gene therapies, but now with more uncertainty on whether the gene therapy’s effect will last or even produce a clinical benefit at all. This means that healthcare execs may be compelled to be more restrictive on new gene therapies until a more concrete clinical benefit is demonstrated.”
The Precision for Value survey found that payers are still playing catch-up with regard to gene therapy. Payers’ primary information needs from manufacturers include data on durability or response, the gene therapy pipeline, information on long-term economic benefits, and what patients are most appropriate for therapy.
“Even with the shift in FDA strategy, payers are likely still going to want information reflecting clinical benefit and long-term outcomes,” Schafer says. “Manufacturers should be prepared to present as much of this data as available to aid in coverage.”
Impact on coverage strategies
“Gene therapy is a paradigm shift in how we manage disease and the FDA, understandably, wants to make these options available to patients as soon as possible,” Schafer says. “However, payers are charged with using limited healthcare dollars as efficiently as possible which can create a challenge for new therapies with limited outcomes data. Payers may be compelled to be more restrictive of new gene therapies if only surrogate end point benefits are shown.”
Without data on reduction in more meaningful clinical events, it may be difficult for payers to justify the significant up-front cost, according to Schafer. “The issue may extend to health systems and integrated delivery networks, as well, which have shown a reluctance to administer certain gene therapies unless coverage from payers is assured,” he says.
A gene therapy may come to market sooner under the new FDA guidance, but the overall clinical value proposition of the product, at least at launch, may appear weaker, according to Schafer. “Surrogate end points are not as compelling as changes in clinical outcomes,” he says. “Payer policy may end up more restrictive and provider uptake more tepid until data are released showing that these gene therapies are truly improving patient outcomes. In competitive gene therapy categories, such as hemophilia, it could result in better coverage for products with clinical outcomes data versus those with only surrogate end point data.”
How payers want to pay
Precision for Value research found significant payer interest in alternative payment models for gene therapy. Outcomes-based contracts, where payers would pay less-or nothing at all, if the gene therapy doesn’t work-is the most popular option, according to Schafer.
“Payers are also interested in a model where the gene therapy is distributed through a specialty pharmacy, thus eliminating much of the provider overhead cost,” he says. “Annuity payments over time are also of interest to payers. Our research indicated a minority of payers already had outcomes arrangements in place for some of the gene therapies on the market today including the CAR-T agents.”
Majewski believes that using surrogate markers is unlikely to cause any material change in the way that gene and cell therapies are priced. “However, by using surrogate end points it is possible that the payers will be funding gene and cell therapies that are less effective than would be expected based on initial clinical trials,” he says. “These findings will likely be realized over the course of post-marketing trials. In order to guard against the risks of the unknown, payers may be more restrictive when determining who can receive gene and cell therapies until the final clinical benefits are fully established.”
Short-term value poses problems
“I think one of the closest corollaries when we think about payers being confronted by significant upfront cost in the hope of a long-term benefit is actually hepatitis C,” says Schafer. “Part of the issue when the newest HCV drugs came to market was that payers were being asked to pay a significant up-front cost for 12 weeks of therapy with the hope of saving money many years later via reduced rates of liver cancer and liver failure. Unfortunately, payers in the U.S. often only have members for a couple of years, so the long-term savings payoff was remote.”
In addition, the sheer volume of HCV patients meant that the up-front cost was staggering, according to Schafer.
“Conditions treated with gene therapy are not nearly as prevalent as HCV, but the lessons of high up-front cost for potential long-term benefit, as learned in HCV, still apply,” he says.
Another example that is relevant is stem cell transplant. “In the case of stem cell transplant a patient is treated with a very costly medical intervention, often in an academic health center or other large institution, with the hope for cure in the future,” he says. “Gene therapy behaves very similar. In fact, one of the respondents of our survey said they were lumping gene therapy under transplant in terms of management. The more manufacturers of gene therapies can provide payers on when meaningful changes in clinical outcomes occur, as well as short- and long-term value, the better.”