Navigating pricing and access for a healthier future
By Eunmi Ha, Senior Analyst, IPG Health Global Market Access
In the evolving landscape of healthcare, few innovations hold as much promise as cell and gene therapy (C>). These groundbreaking treatments have the potential to revolutionize the way diseases are treated, offering a onetime functional cure. These drugs can command multimillion-dollar prices and provide hope to patients who may previously have had no meaningful treatment. The potential held by C> comes with a complex challenge for manufacturers, payers, prescribers and patients: how can the extraordinary benefits of these therapies be balanced against the extraordinary costs, while maintaining equitable access for those most in need?
The power of cell and gene therapy
As of January 2023, 32 novel C>s in the US and 21 in the EU received marketing authorization.1, 2 These therapies have the potential to “cure” severe and previously incurable diseases, offering hope to patients whose only current options are lifelong pharmaceutical treatment. To patients whose current outlook is limited to mitigation of symptoms and, in many cases, continual progression of their disease, C> is a transformative path to improve health and quality of life. To these patients, it is a lifeline.
Navigating pricing pressures
The most expensive pharmaceutical products in the world are C>s. Currently, at the top of that list stands Hemgenix, a one-time treatment for severe haemophilia B, with a price of $3.5 million per dose in the US.3 This title was taken from Zolgensma, a C> for spinal muscular atrophy, priced at $2.1 million per dose in the US and £1.79 million per dose in the UK.4, 5 With almost 400 investigational C> drugs in the pipeline, another is likely to take the crown in the next few years.6
Although cell therapy prices differ widely depending on the indication and the type of product, the Institute of Clinical and Economic Review (ICER) in the US estimates the average cost of a gene therapy at between $1 million and $2 million per dose,3 ushering in a new era of targeted drugs priced in the multimillions.
The ultra-high prices of these treatments are at the forefront of public discourse. At the same time, inability to reach a consensus on fair pricing can result in manufacturers pulling out of the market completely, leaving patients without a functional cure. The withdrawal of bluebird bio from the EU market shows the fragile nature of the current state of play, particularly in the EU.7-10
bluebird bio’s exit from the EU market8
“European authorities were unwilling to recognize the value of a one-time, potentially curative medicine.” —Andrew Obenshain, President, severe genetic diseases, bluebird bio
One-time gene therapy of adult and pediatric patients with β-thalassemia who require regular red blood cell transfusions
Withdrawal: Operations in the EU and UK ceased after two years of discussions with European reimbursement authorities
Assessment: NICE draft guidance rejected Zynteglo, citing the small sample sizes and lack of long-term follow-up data. Additionally, the cost estimate was “considerably higher than what NICE normally considers an acceptable use of NHS resources.”9
One-time gene therapy to treat boys 4-17 years of age with early, active cerebral adrenoleukodystrophy
Withdrawal: Regulatory marketing authorization withdrawn from EU and the UK by bluebird bio for commercial reasons
Assessment: Based on a review of data on quality, safety and efficacy, the risk-balance of Skysona was found to be favourable by the European Medicined Agency10
Market access considerations
Payers have shown resistance to multimillion-dollar price tags, with concerns regarding the high upfront costs and the long-term efficacy of novel C>. To provide equitable access, healthcare stakeholders, including pharmaceutical companies, regulators, payers, and patient advocacy groups, need to work together to find a balance between innovation, pricing, and access.
Pain points for payers when considering reimbursement
- Limited data long-term efficacy available fuels payer hesitancy to commit to large sums
- Healthcare budgets with a one-to-several year term and hospital budgets designed for chronic treatments are structured for long-term, progressive costs rather than the high, upfront costs of C>
Collaboration between stakeholders is required, with adaptive approaches to quantifying value and innovative reimbursement models.
Shift to value-based pricing
- Framing of the potential healthcare benefits of new treatments in a language that resonates with payers
- Ties the price of a therapy to its demonstrated clinical value, taking into account factors such as improved quality of life, reduced hospitalizations, and increased patient productivity.
Several analyses by the ICER have indicated cost savings, with the high price of these drugs balanced by the long-term cost savings to the healthcare system.11, 12 By framing the clinical benefits in a manner familiar to payers, the long-term savings of C> can be assessed more fairly. Discussions with payers and patients should be conducted early to identify the payer reimbursement framework and insights built into evidence generation and launch strategy to directly target concerns when negotiating reimbursement agreements.
Innovative reimbursement plans may also be considered. Two reimbursement models gaining traction are the payment over time model and the pay for performance model.13-15 Similar to a mortgage, the first better reflects the value provided by C> as a long-term investment. This model may help reimbursement systems configured to long-term, progressive costs cope with the high upfront costs of C>.
Payers have shown willingness to engage in the second, nontraditional finance model to share risk. These innovative payment agreements help reassure payers and offset perceived risks of novel treatments with limited long-term evidence. 13-15
Innovative financial models reduce payer risk associated with large upfront payments.
Zynteglo, bluebird bio13
- Wholesale acquisition cost: $2.8M
- Financial model: Outcomes-based contract, single upfront payment and up to 80% risk-sharing
- Reimbursement conditions: bluebird will reimburse payers up to 80% of the cost of the therapy if a patient fails to achieve and maintain transfusion independence up to two years following infusion
- Evidence: All patients in Phase 3 studies who achieved transfusion independence have remained transfusion free
- Industry impact: Largest outcomes-based agreement seen in US healthcare
- Wholesale acquisition cost: $2.9M
- Financial model: Outcomes-based warranty program
- Reimbursement conditions: Warranty will reimburse payers up to 100% of the cost should a patient not respond. If response is lost within the first four years, payers will be reimbursed on a prorated basis
- Evidence: Durability, efficacy and safety results from the largest & longest phase 3 study for a hemophilia gene therapy, reporting more than 3 years of data
- Industry impact: Approval with a "blockbuster" price tag despite effective treatment options already in market
Ensuring equitable access
The number of products in the C> pipeline are growing, with the rate of approvals likely to increase significantly in the coming years. Patient assistance programs, reimbursement strategies, and innovative insurance models can all play a role in widening access and reducing financial barriers. C> holds immense promise for patients. However, realizing this potential requires a delicate balancing act between innovation, pricing, and access. By adopting a value-based pricing approach, fostering collaboration among stakeholders, and ensuring equitable access, a way can be paved to a healthcare landscape where life-changing cures are within reach for all.
To find out more about market access strategies for C>, or if you have any questions, please reach out to Eunmi.Ha@ipghealth.com.