Estimating the impact of gene therapy claims

The extraordinarily high cost of gene and genetically modified therapies present a unique challenge to plan sponsors. Single-dose treatments can cost millions of dollars, and there’s no way of knowing for sure if your plan will incur a claim for one or more of these breakthrough treatments.

With more than three dozen therapies now approved, widening clinical scope, and a robust pipeline of treatments expected to enter the market in coming years, the likelihood is increasing… but by how much?

While no one has a crystal ball, prevalence modeling can be a useful tool to help you better understand your organization’s estimated potential for incurring gene therapy claims based on the size of your membership.

What is prevalence modeling?

Prevalence modeling takes information we have about how many people are likely to be candidates for certain therapies, the cost of those therapies, and other data and boils it down in a way that is meaningful for a select population.

We use information from our pipeline surveillance, along with our proprietary market intelligence and other clinical sources to create Prevalence-based Gene Therapy Reports for our clients. The reports include information for therapies that are already FDA-approved and those in the pipeline.

For current FDA-approved therapies, we consider:

• Percentage of members likely to take therapy – accounts for various factors including disease state prevalence, clinical trial inclusion and exclusion criteria, and the likelihood that a member could receive the therapy
• Estimated members to take therapy – accounts for the percent of members to take therapy and client membership size
• Cost for course of treatment – the one-time list price for single-administration gene therapies, based on Average Wholesale Price. These figures do not include ancillary medical benefit spend.

For pipeline therapies:

• Disease state prevalence – estimates the percentage of members that may have the specified disease based on national prevalence
• Estimated members with disease state – estimate of members that may have the specified disease based on national prevalence and client membership size
• Expected date of FDA decision – anticipated FDA decision (PDUFA) date

The reports are available quarterly. While they can be a useful tool in understanding the potential risk of incurring gene therapies, there are some limitations:

• Membership must exceed a threshold of 10,000 lives for the data to be valuable.
• The costs in the reports are just for the therapies themselves. They do not include ancillary medical costs that may be associated with obtaining the therapy, such as doctor visits, hospital stays, pre-medications, infusion time, facility costs, and so forth. Ancillary fees for ex vivo therapies can be especially costly.

Of course, the biggest limitation is that the reports offer prevalence-based estimates only. Actual claims experience will vary. While the risk for incurring claims for many of these therapies may be small, when they do happen, costs are significant. We have solutions that can help you stay prepared.