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Cell & Gene Therapy
Drug Pricing

The challenges in reimbursement for cell and gene therapies

Posted by on 21 February 2022
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What makes cell and gene therapies such a complex area for pricing and reimbursement in the US drug market? At Biotech Week Boston 2021, Conference Director of Cell and Gene Therapy Manufacturing & Commercialization, Sarah Lintern, sat down for a chat with Kristin Wolff, VP of Global Policy, Strategy and US Government Payer at bluebird bio.

SL: Can you tell us a little about your current role and what that involves at bluebird?

KW: At bluebird, my role is created to bring together the nexus between policy and the government payer - perhaps the nexus that is drawn the tightest in the cell and gene therapy world. These are new therapies, they operate under new paradigms and they really require a greater flexibility and thinking, from the full spectrum of ‘what does the market landscape look like?’, all the way through the traditional coding, coverage and reimbursement processes that actually pull through approved therapies to patients [for them] to be able to access.

I wear both of those hats at bluebird. I work to make sure that our global policy is coordinated and consistent across markets and then specifically in the US in addition to that. I lead a team that I like to call the ‘block and tackle’ of negotiations through approved therapies with US government payers, primarily Medicare and Medicaid.

SL: That makes sense for why you’re joining our panel this month that’s focusing on value regulatory considerations and access for novel therapies. What do you think are the biggest challenges when it comes to these high-cost, one-off therapies?

KW: The challenge I would say, universally across both the regulatory policy side as well as the reimbursement policy side, is the newness of the therapy and the paradigm shift that a one-time administered, potentially curative therapy represents. The systems that we have, the standards that we’ve set up, the rubrics that we utilize to judge value, safety and efficacy in the first place really grew up around chronic disease therapies - as we should have - those were the only therapies we’ve had for the last 30, 40, 50 years.

And so, making sure that we’re maintaining the absolutely gold standard of safety and efficacy on the FDA side and then balancing patient access with the need for healthcare system sustainability on the reimbursement side, those principles have to stay the same, but how do we put them into the lens of cell and gene therapy, because it is one-time administered? All of the value of the therapy is conveyed at that single point of administration, from a payment perspective, but then, of course, it accrues to the patient and the healthcare system over decades. How do you sort of mirror and match those two and the key principles? That’s the challenge that we’re facing over and over again in different environments.

SL: You mentioned reimbursement and pricing is linked to that. What do you think are the main challenges when focusing on applying the right payer models to different markets when looking at the therapies?

KW: Payer model itself is actually a term that has been helpful for us to be specific about, internally and externally, because you can think of payer model - and this applies much more in the European context - as a traditional health technology assessment model, and there are specific parameters like there would be in any kind of modelling methodology that need to be adapted to be more appropriate for a cell or a gene therapy than for a chronic disease therapy.

But looking more broadly at the use of the term 'payer model', how does the system take into account the full benefit of a cell or a gene therapy? When you think about what that challenge means, it really means a reorientation, both on the side of policy makers who are often the ones making the macro decisions about what gets paid for and how it gets paid for across entire healthcare systems, all the way down to the more local decision makers who have to manage annual budgets.

It’s that tension, when we think about pricing and reimbursement, for gene therapies in particular, that we see and that we’re trying to work through and it's one of the reasons that bluebird has drawn such a close nexus between their policy work and their payer work. Because in the end, again, for a completely new technology, they’re one and the same - getting to change the macroscopic lens of how does a society value, how does a system value these therapies over time, but then how do you balance that with the actual, real annual budgetary requirements that are often in place, where there’s sometimes much less flexibility, and then so you need even more creative solutions.

SL: When looking at the US and CMS and state medication agencies and private insurers, what can be done to facilitate wider access to these types of therapies?

KW: I would actually say that on the US side, we’re on the path to change. We’ve seen some pretty significant evolutions, not just in how payers across the spectrum, Medicare, Medicaid, commercial, are thinking about paying for cell and gene therapies, but how they are actually doing it. So four years ago, if you'd asked me that question I would have had a long list of things that needed to change across each of those payer segments to really have meaningful, timely access to gene therapies.

Now I would say we need to accelerate the pace of progress, but that pace of progress is there. It’s happening. A great example is the CMS Final Rule for Value based Payment for Drugs and Medicaid that was released at the end of last year (it was part of the bigger rule-making; bluebird’s focus was only on that one piece around value-based purchasing for drugs). That represented a huge evolution in CMS’s thinking to remove what has often been considered one of the biggest barriers to creative payment models for gene therapies, which is the Medicaid Best Price Rule. In showing that creativity, CMS really demonstrated how they wanted to work within the confines of statute, but make progress in a meaningful way toward what could be possible.

Is it the ideal state? Definitely not. But is it ideal in terms of what is possible now and how much progress we can make? It gets us definitely down that field, for sports analogy, towards that goal post. We’ve seen commercial payers take really creative approaches that take into account the diversity of their customers, employer sponsor plans for instance, and thinking through what solutions make the most sense, and one that we’ve really gained is a focus on operational ease. We have to be creative and we have to be novel, but we can’t totally issue operational ease because that in the end can prove to be a significant barrier all on its own, even if we solve the regulatory and legal challenges that we face.

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