Accelerated Approval of Gene Therapies Intensifies Reimbursement Questions

Pictured: Graphic of DNA helix structure/iStock, anusorn nakdee

Pictured: Graphic of DNA helix structure/iStock, anusorn nakdee

Efforts are underway by the FDA to hasten the progress of gene therapies for severe conditions to the market—but reimbursement of these expensive medicines is still at the heart of the challenge. 

The FDA's recently introduced Operation Warp Speed for Rare Diseases in part encourages the use of biomarkers as surrogate endpoints to help facilitate the accelerated approval of gene therapies for serious or life-threatening conditions affecting small numbers of people, Peter Marks, director of the FDA’s Center for Biologics Evaluation and Research (CBER), told BioSpace in a previous interview. 

Biomarkers, which include measurable traits like pulse and blood pressure, can be predictive of clinical benefit in trials.

“For some of these products, we may need to accept some level of uncertainty around these questions at the time of approval,” Marks said.  

The FDA’s accelerated approval pathway has sparked some debate around reimbursement.

A Fraction of Medicaid Spending

A June 2022 Health Affairs article questioned Medicaid spending data on accelerated approval drugs. Specifically, the authors cited data from The Centers for Medicare and Medicaid Services (CMS) for each state, reporting that in 2020, Medicaid spent .2% on these medicines. 

The authors noted that the data raise several health policy questions, such as: “Should policymakers, CMS or state Medicaid authorities deny patients struggling with severe diseases access to innovative care to save less than 1 percent in Medicaid costs?”

A February HHS report underscores these issues.

The price tags for cell and gene therapies often exceed $500,000 per course of treatment. This “high upfront cost…poses a challenge to beneficiaries and payers, including state Medicaid agencies,” according to the report.

The report points to the therapies’ rare disease indications and notes that the resulting limited utilization and outcomes data pose challenges that “make underwriting and assessing the value of the therapies difficult.”

Medicaid and other payers are “hesitant to pay the high, one-time cost” of gene therapy. They are “increasing cost-sharing, instituting stringent utilization management programs, and/or purchasing reinsurance, as legally permissible and generally applicable.”

This way of dealing with the challenges of cell and gene therapies brings frustration to companies like California biotech Ultragenyx, which has six gene therapies in development.

“Paying less for accelerated approval is a misguided attempt to lower drug prices by unqualified policy people with no idea what it will do to all the people hoping to get the very first treatment developed to save their lives,” Emil Kakkis, president and CEO of Ultragenyx, told BioSpace.

Kakkis said he heard a payer repeat this “misguided idea” during a panel session at the recent annual American Society of Cell and Gene Therapy meeting. He added that talking about drug pricing is one thing, but creating a two-tier system that would essentially discriminate against accelerated approvals in terms of reimbursement “will be very damaging.”

CMS's Accelerating Clinical Evidence Model

In February, CMS announced it had selected three new models in line with President Biden’s Lowering Prescription Drug Costs for Americans executive order.

Under the Accelerating Clinical Evidence Model, CMS would develop payment methods for accelerated approval drugs in consultation with the FDA “to encourage timely confirmatory trial completion and improve access to post-market safety and efficacy data,” according to a news release from the agency.

The Alliance for Regenerative Medicine (ARM) took issue with modifying payments for drugs approved under the Accelerated Approval Program (AAP).

Stephen Majors, an ARM spokesperson, told BioSpace via email that the organization believes “this approach will undermine the intent of AAP and could discourage developers from investing in potential cures for diseases with high unmet medical needs.”

Majors, who contributed to the organization’s policy and advocacy objectives, stressed the importance of AAP for patient access to cell and gene therapies.

“Established more than 30 years ago, AAP is a vital pathway for getting promising therapies to patients who have few other treatment options and could be a lifeline for patients seeking access to cell and gene therapies in the future,” he said.

Ana Mulero is a freelance writer based in Puerto Rico. She can be reached at and @anitamulero on Twitter. 

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