Current state of cell & gene therapy outcomes-based agreements
Cell and gene therapies (CGTs) may be transformative for the treatment and cure of diseases but come with a price tag ranging from approximately $400,000 to nearly $3,000,000.1,2 The promise of these high-cost therapies paired with rising healthcare expenditures, budgetary pressures, and calls for healthcare reform have generated heightened manufacturer and payer interest in supporting access to CGTs through outcomes-based arrangements (OBAs).3 An OBA is a type of value-based contract in which payers and manufacturers share financial risk by linking reimbursement to outcomes achieved, creating improved alignment of value and reward.4-6
CGTs are particularly apt for OBAs due to their enormous upfront costs, often as a single-administration therapy, which places a significant amount of risk on payers as compared to that associated with traditional therapies.7 The hefty price tags are particularly difficult to digest at launch because it is unknown how long the therapy will provide benefit, whether for a limited time, or a lifetime. This is problematic for US insurers because it is difficult to follow patients in the healthcare system for more than 3 years due to enrollee turnover.7 If a member switches plans, benefits accrued from the payment of a cell and/or gene therapy by one insurer may be transferred to the next without equal transfer of financial burden.
While there are 25 FDA-approved CGTs, 6 of which are chimeric antigen receptor (CAR) T-cell therapies for the treatment of blood cancers, and 3 of which are gene therapies for the treatment of rare diseases, only 4 of the products have publicly identifiable OBAs in place in the US with limited information on term details and outcomes to date.8-10
Publicly identifiable US cell and gene OBAs9-12
- Product and indication covered in agreement: Zolgensma (onasemnogene abeparvovec) for spinal muscular atrophy
- Time frame: Up to five years
- Agreement details: Pay-over-time option of up to 5 years, which places a portion of the cost at risk, dependent upon demonstrating continued performance over a 5-year period
- Product and indication covered in agreement: Kymriah (tisagenlecleucel) for acute lymphoblastic leukemia
- Time frame: 30 days
- Agreement details: Based on patient response at 30 days and operationalized at the hospital level where the therapy is shipped without an invoice. Only once the 30-day period is reached and a positive outcome is achieved, is an invoice sent.
- Product and indication covered in agreement: Zynteglo (betibeglogene autotemcel) for ß-thalassemia
- Time frame: Up to 2 years
- Agreement details: One upfront payment paired with an OBA in which payers will be reimbursed up to 80% for patients who fail to achieve and maintain transfusion independence up to 2 years following infusion
- Product and indication covered in agreement: Luxturna (voretigene neparvovec-rzyl) for inherited retinal disease
- Time frame: 30-90 days and 30 months
- Agreement details: Rebates tied to short-term efficacy and long-term durability based on light-sensitivity testing scores
Looking forward: manufacturer and payer considerations for CGT OBAs
With the predicted approval of 10 to 20 CGT products a year by 2025, we can anticipate an increase in both competition and appetite for OBAs from manufacturers and payers.13 For years, CGT manufacturers have had concerns about offering OBAs due to the Medicaid best price (MBP) policy and fears that a refund provided to a payer for a failed cell or gene therapy would be determined to be the new best price for that drug.14,15
However, an MBP reform final rule from the Centers for Medicare and Medicaid Services (CMS) went into effect on July 1 of this year, which provides options for price reporting that reduce the impact of refunds on MBP and will ideally spur manufacturer willingness to offer OBAs going forward.14,15
Future payer and manufacturer CGT OBA opportunities
- Increase interest in offering CGT OBAs
- Seek differentiation among competitor CGTs
- Establish leadership among CGT manufacturers
- Increase influence on OBAs
- Monitor budget impact of growing number of CGTs
- Select preferred therapies in competitive indications
- Establish best practices
- Expand evidence
- Optimize health outcomes
As manufacturers increasingly consider OBAs, they will also need to consider how they can differentiate their product among competitors. A manufacturer with a currently approved cell or gene therapy product will have generated a significant amount of data by the time new entrants reach the market, which can provide a leg up on newer agents with uncertain long-term outcomes. However, a manufacturer with a new agent with significant improvements (whether in efficacy/safety) can leverage this clinical data to displace the use of other therapies and potentially shift treatment practices.
On the other hand, payers will be motivated by the growing number of CGTs and resulting financial impact to go beyond current management measures, including the offering of risk-bearing products for plan sponsors specifically designed for CGTs as well as utilization management and site precertification policies. They will be uniquely positioned to influence OBAs, as they will increasingly have opportunities to prefer and/or exclude CGTs. While the drivers of CGT OBA interest and actionability will differ for manufacturers and payers, both will have the opportunity to learn from previous OBAs to optimize patient use and outcomes, resource management, and evidence generation and application.
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