Evolving outcomes-based agreements with cell & gene therapies

By Jessica Cherian, PharmD, Strategic Planning Director, Mosaic

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 OBAs^9-12

Novartis

• 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

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• 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.

bluebird bio

• 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

Spark Therapeutics

• 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
 

Shared opportunities

• Establish best practices
• Expand evidence
• Optimize health outcomes