In 1996, Doug Olson was diagnosed with Chronic Lymphocytic Leukemia which responded to treatment for years. In 2010, he was given the harsh reality that his cancer had mutated and was no longer responding to standard therapy. A story that many patients face every day. For Doug, his story would have a happy ending. Ten years after undergoing an experimental therapy, CAR-T, he lives free of Leukemia. While treatments like CAR-T are on the rise, the high cost for these treatments could make them inaccessible to many patients.

Gene Therapies on the Rise

According to scientists from the Center for Biomedical Innovation in Cambridge, Massachusetts, there are enough trials currently underway that we could see 40 to 50 new gene therapies approved for clinical use by 2030. Many of these will be used in the fight against cancer. The American Society of Gene and Cell Therapy stated in their Q2 2021 report that more than 1,300 gene and cell therapy candidates are in development for oncology, more than double the number of therapies since 2018. In Q2 2022, they reported gene therapies continuing to rise by 4%. Oncology remains the most active therapeutic area of research (preclinical through pre-registration). Big pharma is paying attention to this emerging market.  They’ve invested 22.7 billion dollars in 2021, with companies like Gilead Science and Bristol Myers Squibb presenting therapies that performed well against second-line standard of care for large B-cell Lymphoma.

The Costs of Therapy

A study published by the Aspen Institute, the Blue Cross Blue Shield Association, and an association of American insurance companies looked at the expected arrival of new gene therapies by 2031. This study estimated the annual acquisition cost for 550,000 patients would be $30b. With our country’s prescription-drug bill at approximately $577b this seems small, but it still presents a warning. Buyers for health care in the United States are concerned about the cost burden they expect as numbers grow.

Others suggest we are past the warning stage. “I think everyone agrees that the pricing of gene therapies is a crisis,” says Dr. Nicole Paulk of the University of California, San Francisco. Dr. Paulk compares gene therapies to “snowflakes,” each AAV program being completely unique. She states that for some diseases, it requires more effort and resources to manufacture therapies, “It is not uncommon that we need to use at least a 50 liter, if not a 200 liter, bioreactor to make a single dose for a single patient.” Due to the complexity of manufacturing by third parties, the process is expensive and limited. Boston Consulting Group estimated that the cost of manufacturing these therapies range from $100,000 to $500,000 per dose, while a study by Dr. Rebecca Borgert, PharmD, BCOP in August 20201 estimated the average cost of CAR-T ranges from $373,000 to $475,000. The bottom line is that the cost for these therapies are high and insurance companies have expressed concerns with reimbursement.

Handling Costs

Although the US health system isn’t designed for extremely expensive one-time therapies, some biopharmaceutical companies are estimating a $2-3m therapy could save the healthcare system more than $20m over a typical patient’s lifetime. As pricing strategies emerge, several are gaining traction. Payment-over-time is an installment model that allows insurers to lessen the shock of initial therapies by spreading out costs. Outcome-based models require payers and manufactures to agree (contractually) on therapy performance, along with payment amounts and timing. These models may offer rebates if a patient fails to achieve a promised outcome. Financial support models are those that support healthcare providers by avoiding payment for the therapy before administering it to a patient.

What these payment models do is allow flexibility, so biopharmaceutical companies can offer multiple payment options that address payer concerns. Flexibility is critical in the US because our healthcare system is highly fragmented, with a wide variety of public and private health insurers. This makes for a more complex environment around reimbursement and patient access.

Conclusion

Gene and cell therapies are exciting, a significant scientific and medical advancement. As they become more widespread, monitoring their efficacy, along with accessibility could prove beneficial. “Reimbursement models are crucial to the commercial success of gene therapy,” says Ben Isgur, PwC Health Research Institute Leader. He states, “Without functional reimbursement models, it will take longer for patients to realize the full potential of gene therapies.”