No Silver Bullet for Paying for Gene Therapies

Gene therapies are transforming the treatment of many diseases. Currently there 17 gene therapies approved by the FDA. Over the past two years, gene therapies have been approved by the FDA with list prices that are higher and higher: Roctavian for hemophilia A at $2.9 million; Lyfgenia for sickle cell disease at $3.1 million; Elevidys for Duchenne muscular dystrophy at $3.2 million; Hemgenix for hemophilia B at $3.5 million.

The most recent gene therapy was approved in March 2024, Lenmeldy to treat children with juvenile metachromatic leukodystrophy developed by Orchard Therapeutics. Lenmeldy also has the distinction of having the highest ever price for a new treatment: $4.25 million.

In 2023, spending on cell and gene therapies increased 38% over 2022 to $5.9 billion in 2023, according to a recent report from IQVIA Institute for Human Data Science. Interest in and research for gene and cell therapies is growing. Venture capital funding in this area reached $3.4 billion in 2023, and there were 406 industry-sponsored clinical trials started in 2023 along, finds the recent IQVIA report.

In fact, by 2032, there could be almost 50,000 patients a year that could be treated with gene therapies, indicates a white paper by the Institute for Clinical and Economic Review (ICER) and NEWDIGS, Tufts Center for Biomedical System Design.

But ensuring patient access for gene therapies with fair prices and managing clinical uncertainty presents many challenges for manufacturers, payers, policy makers and others, according to the new paper.

Sarah K. Emond

There are no silver bullets for providing access to one-time and potentially curative gene therapies, Sarah K. Emond, MPP, president and CEO of the Institute for Clinical and Economic Review, said in an interview.

“What we’re hearing is that patients ultimately aren’t getting access to these therapies in a timely manner,” she said. “There’s a lot worry on the side of those paying for it — whether that’s the payers or the big employers — that they don’t know how they're going to afford this.”

From a policy level, access to the gene therapies will depend on the innovative approaches now being discussed by payers, Emond said.

The new white paper aims to provide an overview of the options that have been discussed for paying for gene therapies. These include: value-based pricing, value-based outcomes contracts, warranties, subscription insurance models, installment payment arrangements, and a federal carve-out benefit program are explored.

This paper relies on data and perspectives gathered from a literature review and draws on work on gene therapy done by both ICER and the NEWDIGS FoCUS (Financing and Reimbursement of Cures in the US) Project. ICER and NEWDIGS obtained feedback from 22 experts from payer organizations, large and small biopharmaceutical manufacturers, patient advocacy groups, providers, and ancillary vendors offering or providing necessary execution support for potential solutions.

One of the biggest concerns from payers is the uncertainty about the durability of gene therapies’ benefits over time. From their discussions, ICER and NEWDIGS found that payers believe there should be five years duration of clinical benefit to justify the high one-time prices. Additionally, payers want solutions that link real-world outcomes to total price paid.

Sharon Phares, Ph.D., MPH

“The uncertainty of outcomes is largely on two fronts,” Sharon Phares, Ph.D., MPH, associate director of research at NEWDIGS, Tufts Center for Biomedical System Design, said in an interview. The Center is part of Tufts Medical Center Institute for Clinical Research and Health Policy Studies (ICRHPS). NEWDIGS is the Center’s flagship program.

“One is durability; how long will it last? The second is whether patients will need additional therapy. Genetics is very complicated. But people want some certainty that it will work,” Phares said.

The value-based contracts that have been put into place have aim to address the clinical uncertainty, as well as the cost volatility and short-term budget impact, she said. The paper addresses the opportunities and challenges of stop loss/reinsurance; subscription models and federal coverage.

A Government Option

Among the people they interviewed, Phares said there was an interest in a government solution. “People are so concerned over patients having access and the affordability on at least a short-term basis for payers and what it will do to the budgets, that they’re looking for any solution that will ensure that patients can get what they need,” she said.

Earlier this year, the Center for Medicare and Medicaid Innovation (CMMI) — part of the Centers for Medicare and Medicaid Services that develops alternative payment models — launched a program to address state Medicaid programs’ access to gene therapies. This was in response to the first two therapies approved to treat patients with sickle cell.

The CMS model initially focuses on access to the two sickle cell gene therapies approved in December — Vertex Pharmaceuticals’ Casgevy at a cost of $2.2 million and Bluebird bio’s Lyfgenia at a cost of $3.1 million. Sickle cell affects more than 100,000 people in the United States. CMS indicates that 50% to 60% of people with sickle cell disease are enrolled in Medicaid.

The Cell and Gene Therapy Access Model is a voluntary model for states and manufacturers where CMS will negotiate outcomes-based agreements with manufacturers. This process begins in the spring 2024, and states can choose to participate in the program beginning between January 2025 and January 2026.

CMS and pharmaceutical manufacturers will negotiate a set of key terms, which would include pricing, including rebates, and outcome measures that would form the basis for individual contracts.

Emond said there there’s a lot of questions about the CMMI model, especially about what kind of participation there will be both from the states as well as from the manufacturers. “It’s great that CMMI is experimenting with this,” Emond said. “There is a lot of uncertainty about whether it is viable and how it could work to have negotiating power and the adjudication of the outcomes-based contracts in one authority. We will be paying attention to CMMI.”

Phares said that many of the states with the highest density of patients that have sickle cell are in states that opted not to do Medicaid expansion, and they tend to have less generous programs. “I am watching carefully to see which states participate because, unfortunately, politics gets involved. It will be interesting to see if people can set politics aside for the best public health decision.”

Phares said it's important for policymakers to have flexibility built into their programs ensure health equity, “because inflexible policies have a detrimental effect on certain populations.”