shutterstock_1024645213-459130-editedRecent advancements in gene and cell therapies have raised both excitement and anxiety in the global medical community. Luxterna (voretigene neparvovec-rzyl) and CAR-T therapies Kymria (tisagenlecleucel) and Yescarta (axicabtagene ciloleucel) have provided potential cures for a significant share of patients with just a single treatment. However, that single treatment, with amazing patient value delivered over years or even decades, also requires a single payment under our current healthcare funding mechanisms. This is causing some additional complexities in an already complex and sensitive prescription drug pricing environment.

Healthcare funding mechanisms have broadly been scrutinized as the cost of healthcare has skyrocketed over the past decade. Public and private payers have put initiatives in place to shift from fee-for-service to value-based payment systems. While that transformation is gradually occurring, high-cost drug treatments are dominating the drug pricing debate. Curative treatments, such as Sovaldi/Harvoni in hepatitis C and immune-oncology treatments like Keytruda and Opdivo have added the dimension of societal affordability to the discussion of value versus price for specialty prescription drugs. With the addition of gene and cell therapies, such as CAR-Ts, the time horizon and evidence of benefit versus the need of immediate funding is adding additional complexity.

The pharmaceutical industry has been exploring the benefits and needs of outcomes-based contracting, alternative pricing and funding mechanisms, and other ways of addressing payer concerns on demonstrated value and affordability. While these arrangements are fundamentally aligned with the evolving payer and provider focus on outcomes metrics, we have seen few successful deals implemented due to a combination of differing perspectives on value, mutual trust, logistical complexities and compliance hurdles. However, as the need for these deals is increasing, a combination of good mutual understanding, collaboration and creativity will help the leaders in this space gain a competitive edge.

My colleague Jennifer Tedaldi recently wrote an excellent article entitled “Paying for Gene Therapy” in the June issue of In Vivo. In the article, she provides a detailed analysis of the situation and its complexities, reactions from U.S. payers and some suggestions on how to approach the challenge. Feel free to reach out to Jennifer or me and share your thoughts, or to discuss these topics further.


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Topics: oncology, Drug pricing, pharmaceuticals, outcomes-based contracting, value-based pricing, cell and gene therapy, healthcare funding