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Validating effectiveness and payment for single treatment gene therapies

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With the recent FDA approval of the fourth single-treatment gene therapy available in the US, as well as hundreds of clinical trials for others in progress, we are now fully entering a new age of treatment. Larry Blandford, executive vice president of Precision Value & Health, discusses how single treatment gene therapies will require new approaches to validate long-term effectiveness and establish workable payment structures.

The long-held promise of gene-modifying, one-time curative treatments is coming to fruition with FDA approval of 4 gene therapies and hundreds of other such therapies in the pipeline. Gene therapies represent breakthroughs on multiple fronts, particularly clinically as major advancements for patients who may suffer from devastating conditions and financially, with list prices crossing the $1 million threshold.

While the price tag will stun many, spread over several years, the cost does not differ much on an annualized basis from existing chronic treatments for some rare conditions or from some of the combination regimens currently in use in oncology. The challenge for the healthcare system is twofold: determining value by assessing the impact of these treatments over time across clinical, economic, and humanistic outcomes and understanding how to pay for one-time treatments where the value is accrued over time.

To assess value we must consider how there are differences in applying currently used methodologies to gene therapies. Cost-effectiveness analyses are key to the evaluation of value in many markets around the world, either by government agency mandate or privately led interests. Several traits of gene therapies create new challenges when creating cost-effectiveness analyses such as accounting for duration of effect.

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While on the surface many gene therapies appear curative, there is sparse data on maintenance of treatment effect beyond a few years; even within that time period some show either partial effect or a relapse. Determining how to apply duration within analyses has a major impact on the results. Second, determining the appropriate utility measures that accurately represent impact on humanistic outcomes is difficult to assess for some age groups and over long periods of time. This can also lead to a confounder of accounting for the likelihood for onset of other conditions that occur in a “normal” population as life is extended.

Lastly, the assessment of value can vary by stakeholder perspective, including those of clinicians, payers, and patients. Based on our recent experience in creating cost-effectiveness analyses for gene therapies, some suggestions include greater flexibility in setting thresholds of perceived value (given differing stakeholder perspectives), expanding the scope to capture unrelated medical costs (cost of treating non-related medical conditions later in life), and utilizing multiple modeling techniques (such as cost consequence models that focus on the clinical benefit).

Even when a gene therapy is considered cost-effective or valuable, the mechanics of paying for that value can be difficult. Much like purchasing a home, many families and individuals are unable to afford a single payment upfront. Similarly, recent research we have conducted identified that 1 in 4 payers felt that they did not have the operational capacity to facilitate payments over time for gene therapies.

Moreover, the ability to track outcomes that could impact those payments requires significant effort to both agree on the terms and manage the appropriate data to determine the outcome. Finally, the fact that individuals move between plans creates concerns over who actually accrues the value for the investment. While all of these factors create challenges, all of the companies with an approved gene therapy product, along with some with near-term launches planned, have publicly commented on offering some type of alternate financing arrangement. Some have postulated other entities could evolve to address this challenge as well, including risk pooling and re-insurer benefit management.

With our healthcare system not accustomed to assessing value nor experienced in handling high single-cost treatments, it will be important to watch how providers engage with patients and how payers handle reimbursement. US payers will certainly provide coverage given the clinical benefits. How they handle coverage in cases where duration of effect is not achieved, as well as installment payments over multiple years, will influence the path for additional curative therapies that are increasingly filling the pharmaceutical pipeline. While these major clinical advances are truly exciting for all parties, eyes worldwide will be watching how assessments of value and financial agreements impact access.

Join industry leaders in Boston on September 9-12, 2019 and discover the latest technologies & commercialization techniques at Cell & Gene Therapy Bioprocessing & Commercialization.


- Larry Blandford, PharmD, Executive Vice President, Customer Solutions – Precision Value & Health
- Jeremy Schafer, PharmD, MBA, Senior Vice President, Director – Access Experience Team – Precision for Value
- Phil Cyr, MPH, Vice President, Consulting Services, HEOR and Policy Research – Precision Xtract


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