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Transformative therapies require innovative payment models
The cell and gene therapy landscape continues to change at an unprecedented pace—14 CGTs are in the US market today, and an estimated 30–40 manufacturers have CGTs in their near-term pipelines. Some estimates suggest that approximately 100,000 patients will be treated with CGTs by 2030, with an estimated annual spend of $24 billion.
CGTs are unique when compared to traditional therapies—they are potentially curative, will likely only require a one-time administration, and typically come with a high upfront cost. While there are differences in costs, administration, and coverage for gene versus cell therapies, the personalized nature of CGTs, complex manufacturing processes, and limited longitudinal data have contributed to access challenges for patients.
Most of the CGTs in market today are to treat oncology or rare diseases. However, treatments are beginning to come to market for more prevalent diseases such as sickle cell anemia, beta thalassemia, and hemophilia. As more treatments come to market, move to earlier lines of therapy, and target more prevalent diseases, the eligible patient population will meaningfully increase.
Managing gene therapy costs
The current one-time administration or per-dose price tag for a CGT treatment is significantly higher than traditional, typically chronic, treatments that “amortize” the cost of care over months or years. This creates a single, high-dollar, or “lightning strike,” claim that makes legacy financing models inadequate as they are built on the expectation of chronic care and more moderate chronic payments.
These products demonstrate a health benefit and value case, but they still create a challenge to the legacy health care financing models. While all health plan sponsors (commercial and government) face exposure, small and medium self-insured employers in the United States—representing approximately 40 million beneficiary lives—are especially vulnerable to the overall rising cost of care and, in particular, lightning strike claims.
Explore three payment financial solutions
There is no one-size-fits-all solution that can meet the various aspects of the financing challenges and types of coverage that exist. So, addressing the complexities of CGT financing necessitates a tailored and multifaceted approach. Opportunities to create innovative financing models lie both within and outside of the current health care value chain. These opportunities can include supplementing existing offerings or creating new offerings.
Exploring potential solutions requires mitigating the current market frictions and creatively considering novel roles and opportunities for both existing and, potentially, new stakeholders. Bringing solutions to market will require a shift from the traditional health care paradigm. There will be a need for cross-industry collaboration, there may be a need for government or regulatory support, and there might be opportunities for nontraditional players.
Putting aside the idea of potential government intervention in this space, we have explored three innovative models that we believe could fundamentally change the way CGTs are financed.