Interview: As Gene and Cell Therapies Grow, Reimbursement Model Needs to Change

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Although the advent of cell and gene therapies is revolutionizing medicine, it is arguable that the therapies that have been approved to date in this area aren’t living up to expectations. They often come with sky-high prices and healthcare is still adjusting to how to provide access and reimbursement. For example, Gilead’s CAR-T therapy, Yescarta, has a price tag of $373,000 and Novartis’ competitive CAR-T product, Kymriah, has a price of about $475,000. Both of those are cancer drugs. Spark Therapeutics’ Luxturna, the first approved gene therapy for a rare eye disease, has a list price of $425,000 per eye.

For the most part, because these are cutting-edge therapies for diseases with largely unmet medical need, payers are willing to reimburse at these prices. However, it’s not clear if that business model is sustainable and there appears to be some lag in the uptake of these therapies.

Recently, Kris Elverum, senior vice president of Corporate Development of Turnstone Biologics and Maria Whitman, Managing Principal of ZS Associates, published a review in the journal Gene Therapy, “Delivering cellular and gene therapies to patients: solutions for realizing the potential of the next generation of medicine,” that addressed the subject.

Elverum and Whitman took time to speak with BioSpace about their study and the challenges facing the industry.

Kris Elverum Turnstone Biologics

Kris Elverum, senior vice presidents of Corporate Development at Turnstone Biologics.

Elverum told BioSpace, “It was clear from my perspective that this next generation of medicine and scientific advances around gene and cell therapies had a lot of potential for patients, but there were a lot of systemic challenges to realizing that potential. The more we thought about it, the more we realized these therapies don’t fit into the current delivery system.”

Whitman agrees, saying, “The way the system is set up now, there are too many roadblocks, both process and system artifacts, to make them happen.”

The authors outline four challenges. One is that many of the new therapies are only going to be delivered at specialized facilities. The second, mentioned above, is cost. This issue also gets even more complicated when you consider that many of these therapies are in-patient, while others are out-patient, or hope to be out-patient therapies. Third, Elverum says, “the material sourcing and logistics required, the challenge of that is difficult. But when you multiply that by a large number of products that are typically given to a smaller patient population, that makes it quite challenging.”

And fourth, how do you disseminate this to the industry when it shifts from a clinical product to a commercial product that so it can be delivered by more and more physicians?

Whitman adds, “There’s no common standard of practice around how to do this, how to engage or interact in a way that is common by institution to institution or manufacturer to manufacturer.”

Maria Whitman ZS Associates

Maria Whitman, Managing Principal of ZS Associates.

It takes on additional weight when you consider who should oversee this. On one level, medical associations and societies need to develop best practice guidelines for much of this. Elverum notes, “There are non-government agencies developing protocols, but if they’re not overseen by the government, what kind of teeth do they have? And what does that mean for the future of manufacturing approaches? It is something that requires multiple stakeholders to get together because the FDA might regulate portions, like quality control of manufacturing, while Health & Human Services’ Office of Inspector General might regulate manufacturing interactions, and the Centers for Medicare and Medicaid Services (CMS) might be responsible for the coding systems for these therapies and how they’re treated in different settings.”

In their article, Whitman and Elverum present a call to action with six components. The first is for government organizations, such as FDA and OIG to remove barriers. The FDA has already issued six scientific guidance documents in July 2018 for diseases specific to gene therapy manufacturing. They believe the FDA should expand these efforts and work with industry groups to add enforcement to self-regulated areas.

They call for payers, both government and private, to accelerate innovation on new reimbursement mechanisms for cell and gene therapies. Elverum told BioSpace, “I think there is very much a reality in our space that innovation typically occurs in the area of R&D, but companies are very hesitant to innovate and be bold in terms of commercialization because they’re so anxious to obtain revenue. From a standpoint of mindset, adopting an innovative approach in commercialization—which also requires investors to take that perceived risk—is critical.”

Along those lines, they also call for manufacturers to collaborate to ensure consistent standards for incoming material quality and increased collaboration between various stakeholders.

The next is for leadership and coordination between industry and nonprofit organizations in creating uniform standards and education by product class.

Provider organizations, they say, should take a leadership role in how to scale the delivery of these new therapies. This includes long-term follow-up and monitoring and creating a model for expert collaboration regarding safety and efficacy education and delivery.

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And finally, they call for healthcare professionals and patients to fight for progress within the healthcare system. “Action is not likely unless patients, caregivers, patient organizations, and healthcare professionals fight for progress,” they write in the paper.

It's easy to lock into the potential of these next-generation therapies—they’re new and shiny and can often cure diseases that were previously untreatable, while others do a terrific job of turning an acute disease into a chronic, treatable disease. But they will only really revolutionize healthcare if they can be accessed by patients and healthcare providers while allowing manufacturers to run profitable companies.

Whitman says, “We live in a system where everyone has a well-defined role—FDA approves, doctors prescribe, CMS pays, patient takes medicine. It’s very well defined. And we’re talking about a change in mindset—everyone needs to work together for this to work because the boundaries of our traditional roles are starting to cross. The underlying capabilities need to be aligned.”

Whitman emphasizes that we’re no longer exclusively talking about one-shot hits on a system that works with lump sums on an annual basis. “We’re talking long-term mindsets and breaking down barriers for individuals’ roles. We’re seeing players doing this a bit more, for example, CAR-T having two-year data collection. That could be part of players starting to build policies around a class. But they require more cross-communication than we’re used to talking about.”

At its root, Elverum says, “the first and foremost for those of us working in the industry is a collective goal of helping patients. The challenges of getting these new therapies to patients can’t be solved with a silver bullet or a tweet. They really are systemic and multifactorial. And that led to the desire to try and start a dialogue on how the system can be improved to bring these therapies to patients.”

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