Gene and genetically modified cellular therapies: Coverage considerations for payors

Technological advances have ushered in many new gene and genetically modified cellular therapies that have the potential to cure diseases that once were incurable. They also come at an extraordinarily high cost. Plan sponsors have a lot to consider in terms of coverage, affordability, and long-term value.

Long-term efficacy. Clinical trials have demonstrated the effectiveness of gene therapies, and early information has built confidence in the short-term durability of patient response. But long-term data is mostly lacking because many of these therapies are new.

Data on long-term durability comes from ongoing evaluation of patients enrolled in clinical trials that led to U.S. Food and Drug Administration (FDA) approval. This data has yielded promising results:

• Studies have shown that symptoms disappeared and stayed away in the first patients who received CD19-targeted chimeric antigen receptor T-cell (CAR-T) therapy for B-cell lymphoma more than a decade ago.¹ This raises the potential that this treatment may cure the disease, at least for a subset of patients.
• Published data for Luxturna, a treatment for inherited retinal dystrophy, found that results lasted for at least five years.²

Safety concerns. Gene therapies are complex and may carry risks. These can include life-threatening immune responses, higher risk for certain types of cancer, allergic reactions, or damage to organs or tissues. Gene editing technologies add an additional concern, with the possibility of “off-target effects,” the unintentional editing of genes beyond the specific target gene(s). Although lab controls are built in to minimize this risk, there is still limited data on the long-term safety profiles of these products.

Coverage and affordability. These therapies are costly, making coverage a challenge for plan sponsors. Models suggest there may be cost savings over time for selected therapies. In one analysis, access to therapies for even a small number of patients each year with multiple myeloma, sickle cell disease (SCD), and hemophilia A reduced overall costs.³

The analysis estimated a reduction in overall disease costs of nearly 23 percent over a 10-year period, resulting in approximately $31 billion in direct health care savings and $3 billion in productivity gains. However, these models are based on assumptions of effectiveness and at least a 10-year durability of response. Even if validated, the medical return on investment does not solve the challenge of the upfront cost to the plan sponsor that may not benefit from long-term medical and disability savings.

Fragmentation. These therapies are typically covered under medical benefit plans because they require use of medical services and are administered in clinical settings. Benefit plans that separate or carve out coverage for gene therapy products can fragment the experience for the member and provider. This can increase the risk of inconsistent decision making, redundant provider work, and delayed or poorly coordinated care. Plan sponsors must weigh any savings that may come from fragmented benefit structures against the risk of a disrupted member and provider experience, as well as poor clinical and economic outcomes.

Manufacturing. Gene and genetically modified cellular therapies pose unique challenges for manufacturing with implications for availability due to:

• Shorter half-lives, which means that the therapies’ concentration does not last very long in the body
• More complex production of component parts, including cell lines or viral and other vectors
• Special temperature requirements
• Other complexities related to the collection and modification of cells from the patient prior to administration

As gene therapies target more common conditions, coordinating manufacturing and distribution will be increasingly important in ensuring the availability of high-quality products.

Scalability. The number of providers who are qualified to administer these innovative products is limited. This is due to complex product handling and administration, as well as the traits of the targeted diseases. CAR-T and other ex vivo therapies use transplant-like procedures that require specially equipped facilities and providers with expertise in transplant services. Other products have handling requirements such as temperature sensitivities that may limit the number of facilities certified by the manufacturer to administer them. Geographic gaps in available providers may arise.

Market timing. Anticipating the timing of FDA approval for pipeline products and planning for their impact is an uncertain process. Some biotech companies have discontinued or delayed development of gene therapy candidates due to regulatory, manufacturing, and/or economic factors. On the other hand, the FDA has shown interest in speeding up the approval process for therapies for rare diseases. We saw this with recent accelerated FDA approvals of

• Tecartus (Kite Pharma) for mantle cell lymphoma
• Skysona (bluebird bio) for cerebral adrenoleukodystrophy
• Elevidys (Sarepta Therapeutics) for Duchenne muscular dystrophy.

Additionally, the FDA announced its intention to increase the development pace for therapies for very small populations with high medical need through Operation Warp Speed for Rare Diseases.4 This initiative will use some of the successful framework created for vaccine development during the COVID-19 pandemic.

Health equity and stigma. In addition to health care inequities rooted in economics, the historic treatment of underserved populations may impact the uptake of available products. SCD, as one example, mainly affects people in underserved communities, impacting health care access, delivery, and outcomes.

Medicaid covers an estimated 50-60 percent of all individuals with SCD who will be eligible for gene therapy products in the pipeline.⁵ Coverage policies for gene therapies can vary at the state level. An individual living in one state may be eligible for a therapy that they could not receive in another state. This may drive even greater health inequities among the most vulnerable individuals.

We must help ensure that all populations can access gene therapies through a robust health equity strategy including:

• Proactive engagement
• Clinical expertise
• Community collaboration

The risks of excluding coverage

While gene and genetically modified cellular therapies are expensive, including coverage for them under benefit plan designs can help prevent much suffering, disability, and costs associated with the underlying diseases they treat. Consider the following examples:

• Most patients born with spinal muscular atrophy (SMA) type I become severely disabled and dependent on a ventilator during the first two years of life. Without gene therapy treatment, most die before age three. Others with less severe disease require lifelong, chronic care.
• Without gene therapy treatment, the vision of patients with inherited retinal dystrophies will continue to worsen and may result in blindness.
• Patients with refractory cancer who have failed multiple trials of chemotherapy will continue to be exposed to costly and less effective cancer treatment without access to CAR-T therapies.

As the clinical scope of gene therapy widens, so too does the need for cost management options, such as our Gene Therapy Stop-Loss solution, that can help mitigate the financial impact and enable affordable coverage.