Malik Kaman co-wrote this blog post with Bernadette Bourjolly.
After two decades of failures and setbacks, it’s an exciting time in the field of cell and gene therapies as we witness pioneering advances in a wide range of indications in areas including blood cancers, immunodeficiency and ophthalmology. While cell and gene therapies represent a potential paradigm shift for the treatment of cancer and rare genetic disorders, funding and reimbursement of these unconventional therapies pose major challenges.
The cell and gene therapies’ high price points mainly stem from the complexity of the process required to manufacture safe and viable products for each patient. In the example of CAR (chimeric antigen receptor) T-cell therapies, patients’ own T-cells are isolated from blood and genetically reprogrammed to recognize and kill tumor cells before being reinfused in the patients’ bloodstreams. Reliably and safely modifying patients’ cells in a regulatory compliant environment and administering the right cells to patients without breaking the chain of identity and custody is a delicate and costly process.
Also, since most cell and gene therapies currently in development are targeting rare conditions, a higher price may be warranted to secure a return to manufacturers, a necessary condition to foster innovation and continue the development of more effective medicines.
How High Is Too High?
The technical complexity to manufacture personalized cell and gene therapy treatments combined with their transformative nature may command a high price, but manufacturers need to secure reimbursement and ensure access to patients in desperate need of a treatment option. The commercial failure of Glybera illustrates the risks of excessive pricing on market access. Targeting an ultra-rare condition at more than a million dollars per patient, most EU payers excluded the gene therapy from coverage, pointing to the limited clinical benefit to patients. Combined with a low number of eligible patients, Glybera didn’t see any uptake (only one patient received the treatment in a commercial setting in five years), and UniQure recently decided not to renew its marketing authorization in the EU.
Outside of the realm of cell and gene therapies, let’s also reflect on the Sovaldi case: While the hepatitis C drug represents a cure for more than 90% of the patients, the $84,000 price tag triggered a public outrage because low-income patients are denied access to the life-saving drug. Despite spending more than $1 billion on the drug in 2014, Medicaid programs were only able to treat 2.4% of the Medicaid patients infected with the disease. As tensions emerged between patients, prescribers and insurers, Gilead’s price hike turned drug pricing into a political issue, and while options are being discussed, no solution has yet been found.
Sharing the Risks
While cell and gene therapies have demonstrated remarkable efficacy in certain indications, significant work remains to demonstrate evidence of their long-term efficacy and safety benefits. In addition, contrary to conventional treatments that can be administered for up to a lifetime, some cell and gene therapies are single-shot therapies associated with high up-front cost. To date, these therapies don’t cure all patients, unfortunately. As a result, payers are looking for solutions to share the risks associated with high costs and long-term outcome uncertainties.
Managed entry agreements may be a way to address unknowns and overcome market access challenges. GlaxoSmithKline recently chose to implement an outcome-based agreement for Strimvelis, its $665,000 gene therapy indicated for the treatment of adenosine deaminase severe combined immunodeficiency. While the specifics of the agreement are undisclosed, the risk-sharing contract was well received in Italy, where the product will be administered. According to Dr. Luca Pani, director general of the Italian Medicines Agency, if the product doesn’t work, the company will return the money.
To the concern toward high up-front price, manufacturers argue that cell and gene therapies will drive cost savings in the long run. The total costs of care associated with conventional treatments such as chemotherapy or enzyme replacement therapies can reach far beyond the price of a cell and gene therapy over the course of a few years. However, constrained budgets may be limiting payers’ willingness to pay large up-front lump sum payments for these therapies. Managed entry agreements structured on payment over time may represent an option to overcome this hurdle, where a percentage of the therapy would be paid up front and the rest of the cost would be paid within the next few months or years following treatment, provided that the patient is still alive or achieves an agreed-upon outcome.
These performance-based payments relying on patients’ outcomes are likely to gain more traction in the near future as they reduce the cost burden to payers by shifting some of the risk on the manufacturers.
While the EU market is favorable to alternative payment models, U.S. payers are skeptical about their feasibility and concerned about the logistical hurdles they would generate, such as the creation of registries to track patients’ outcomes or establishing thresholds to define treatment success vs. failure. However, as an increasing number of transformative cell and gene therapies will soon enter the U.S. market, these therapies may be the ones finally pushing the pharmaceutical industry over the hill on risk-sharing agreements.
Overcoming the Obstacles
As one-time treatment options for patients affected with cancers or rare genetic conditions, cell and gene therapies have the potential to disrupt the clinical care paradigm. However, assessing the value of these therapies will be difficult given the limited number of patients treated in clinical trials and the lack of demonstrated, long-term durability at the time of launch. Cell and gene therapies’ overall budget impact is expected to be substantial given anticipated high up-front costs, and potential long-term cost-offset benefits will be difficult to estimate without real-world data. In an environment focused on value-based care, payers are likely to require more transparency on prices and may encourage manufacturers to offer money-back guarantees if the expected outcomes aren’t reached in order to mitigate the risks and spread budget impact over time.
While there are still hurdles in the path to cell and gene therapy commercialization, manufacturers have a unique opportunity to engage with patients and policymakers to shape the dialogue on value and develop truly innovative strategies to ensure that medicines are available and affordable for all.