We find ourselves today at a critical juncture in the market introduction of groundbreaking therapies. After years of promise, 2017 finally marked the first approval of a gene therapy in the US, Novartis’ Kymriah, with the approval of Kite’s Yescarta and Spark Therapeutics’ Luxturna soon thereafter. To date, there are more than 500 clinical trials for gene therapies in the US alone, 34 of which are in pivotal stages, and there is significant activity in other key geographies. The arrival of these therapies portends disruption in the industry—being able to treat heretofore incurable conditions, but at prices that concentrate significant treatment costs for these patients over a short period of time and in the hands of only one industry stakeholder, the pharmaceutical manufacturer.
Cell and gene therapy approved in 2017
|Kymriah||Novartis||CAR T therapy (tisagenlecleucel)||B-cell precursor||Aug 2017 (US)||$475,000|
|ALL in children|
|and young adults|
|Yescarta||Kite Pharma / Gilead||CAR T therapy (axicabtagene ciloleucel)||Relapsed or refractory large B-cell lymphoma (after two or more lines of systemic therapy, including DLBCL)||Oct 2017||$373,000|
|Luxturna||Spark Therapeutics||Gene therapy (voretigene neparvovec)||Vision loss due to confirmed biallelic RPE65-mediated IRD||Dec 2017 (US)||$425,000 per eye|
There is limited evidence so far, however, to demonstrate that such therapies have been true market disruptors. Several cell and gene therapies approved in the EU were withdrawn after only a few years of commercial presence due to costly manufacturing processes, insufficient demand, or dubious safety and efficacy. In the wake of some high-profile failures (e.g., Glybera, Provenge, ChondroCelect), can cell and gene therapies successfully displace established competitors and generate growth? If so, what paradigm shifts will be required in product discovery, manufacturing, pricing, patient access, and commercialization?
Research and development
Cell and gene therapies do not have a standardized discovery path or delivery mechanism. Based on the novelty of these platforms, there is also a dearth of technical expertise that could contribute to the resolutions of such challenges or the refinement of necessary processes. Many cell and gene therapies have and will continue to target monogenic disorders, which often have easily characterized, at least in theory, but extremely small patient populations. These small populations hinder clinical trial design by making it difficult to find eligible patients and to demonstrate robust statistical evidence of efficacy and safety. If an adverse event occurs, determining its cause can be vexing given the large number of variables (e.g., the therapy’s target, its platform, or its vector). Additionally, given the lack of real-world evidence, it is unclear whether adverse events may have unanticipated long-term consequences to a patient’s genome or overall health. All of these issues contribute to higher labor, infrastructure, and regulatory compliance costs throughout the discovery and development lifecycle that will not likely be balanced by the traditional route of scalability given the personalized nature of these therapies.
As with other new products, these cell and gene therapies must be evaluated in terms of “value.” Value is quantified in different ways by a number of different payers, Health Technology Assessment (HTA) bodies, and independent Health Economics and Outcomes Research (HEOR) agencies. The curative nature and timing mismatch between cost outlays and realized benefits of some cell and gene therapies complicates pricing discussions, especially in light of short-term pressures to manage total healthcare system spending. How should payment be phased over time and how would payment mechanisms impact the commercialization of these therapies? It is likely that facilitating access for cell and gene therapies will require the implementation of new pricing and payment models through public, private, and hybrid partnerships that reallocate risk burden and introduce shifting roles for both incumbent and new stakeholders.
Even if cell and gene therapies overcome R&D and market access challenges, they are likely to face additional commercial headwinds. The manufacturing and supply chain processes for these therapies are labor-intensive, time-consuming, and complex, requiring samples with limited shelf-lives to be sent to multiple processing centers and points-of-care. Akin to rare diseases, cell and gene therapies will require nuanced, high-touch sales and marketing efforts. We expect predictive analytics and the potential associated development of biomarkers and related diagnostics to become more commonplace and even require tool in the successful commercialization of these therapies.
Convincing the right decision makers and influencers regarding the safety and value of these therapies may also require different, interdisciplinary go-to-market models and message delivery platforms. Many cell and gene therapies will have shorter commercial lifecycles since, ideally, most patients will be captured within the first few years after launch, limiting future sales only to incident patients. Opportunities for commercial growth also will be curbed. Unlike traditional molecules, the specificity of cell and gene therapies will not allow for improvements in mode of administration, delivery, or expansions to new indications that could expand a therapy’s lifecycle, and will instead need to rely on the expansion of the platform rather than the drug itself.
Gene and cell therapies have the potential to disrupt the healthcare market. They are in trials to treat and cure many rare diseases, with the promise to one day treat more common diseases or even emerge as the standard of care for global patient populations. To realize this potential, manufacturers need to recalibrate and augment their capabilities to take on the associated development, launch, and continued commercialization challenges. Addressing these challenges will require bold, strategic mindsets working within multifaceted partnerships that capitalize on each stakeholder group’s strengths around a patient-centric approach.
CRA will address these points in a forthcoming three-part series on cell and gene therapies. Part 1 will examine some of the challenges that cell and gene therapies face along the developmental pathway. Part 2 will consider issues related to securing market access and reimbursement. Part 3 will explore adaptive strategies to commercialize cell and gene therapies.
Join us in BIO-Europe Spring in Amsterdam from March 12-14, 2018 and hear CRA at the workshop "What is the right price for access and sustainability?" With a focus on European innovation and global collaboration, BIO-Europe Spring is the premier springtime partnering conference bringing together a “whoʼs who” from biotech, pharma, and finance in the most innovative biopharma clusters in Europe.
About CRA (Charles River Associates) and the Life Sciences Practice
Written by: Walter Colasante, Pascale Diesel, Stephanie Donahue, Lev Gerlovin, Mike Krepps
CRA is a leading global consulting firm that offers strategy, financial, and economic consulting services to industry, government, and financial clients. Maximizing product value and corporate performance, CRA consultants combine knowledge and experience with state-of-the-art analytical tools and methodologies tailored to client-specific needs. Founded in 1965, CRA has offices throughout the world.
The Life Sciences Practice works with leading biotech, medical device, and pharmaceutical companies; law firms; regulatory agencies; and national and international industry associations. We provide the analytical expertise and industry experience needed to address the industry’s toughest issues. We have a reputation for rigorous and innovative analysis, careful attention to detail, and the ability to work effectively as part of a wider team of advisers. To learn more, visit crai.com/lifesciences.
The conclusions set forth herein are based on independent research and publicly available material. The views expressed herein are the views and opinions of the authors and do not reflect or represent the views of CRA (Charles River Associates) or any of the organizations with which the author is affiliated. Any opinion expressed herein shall not amount to any form of guarantee that the author or CRA has determined or predicted future events or circumstances, and no such reliance may be inferred or implied. The author and Charles River Associates accept no duty of care or liability of any kind whatsoever to any party, and no responsibility for damages, if any, suffered by any party as a result of decisions made, or not made, or actions taken, or not taken, based on this paper. Detailed information about CRA, a registered trade name of CRA International, Inc., is available at www.crai.com.
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