Gene therapy has captivated the oncology treatment community for years. After promising results in clinical trials, the first generation of gene therapies are being introduced to the market following Food and Drug Administration (FDA) approval. The FDA recently approved Kymriah (tisagenlecleucel, Novartis), a chimeric antigen receptor T (CAR-T) therapy designed to treat young adults diagnosed with relapsed or refractory acute lymphoblastic leukemia.1 Clinical trial results showed an overall remission rate of 83% within 3 months of treatment with Kymriah for this vulnerable patient population.2
Although much excitement has surrounded the FDA’s decision to approve the first CAR-T therapy, many questions remain. The one-time therapy carries a price tag of $475,000, which has caused some analysts to suggest that the market might not be ready for the payments required by these drugs. In a blog post titled “Gene Therapy Holds Great Promise, but Big Price,”3 Steve Miller, MD, MBA, chief medical officer of Express Scripts (St. Louis, MO), wrote that “gene therapies will require payment and patient care systems which are as novel as the medications themselves. … As these life-saving and revolutionary treatments continue to be developed, it is up to payers, pharma companies, and policymakers to unite and ensure they reach patients.”
Journal of Clinical Pathways spoke with Dr Miller about his blog post, and how he sees future payment models adapting to an influx of costly new therapies as they enter the marker.
Your blog post alluded to the FDA’s first major gene therapy approval as a major challenge for the current health care system. What are some of those financial challenges?
The new CAR-T therapy for childhood leukemia obviously carries a big price tag of $475,000. This will not be the biggest challenge, but it is just the beginning of gene and cell therapy coming to the marketplace at what are going to be some extraordinary high prices. In this particular case, you have a very lethal condition that is associated with large spending already, because what we spend for chemotherapy and stem cell transplants for these children is often up to $400,000, and the survival rate is still below 50%.
In this particular case, you are going to have a product that is priced at a premium, but it is a well-deserved premium because the survival rates go up to about 80%. And so, it is an exciting breakthrough—a movement in the right direction to curing more kids—but when you see prices of products that are upwards of $500,000, it gives the payers a great pause.
Gene therapies have been demonstrably effective, so they are likely here to stay. Yet, they are exceedingly expensive due to their one-time-only administration. What are the best measures for ensuring appropriate patient selection?
What we have always done, and what we do for many high-priced products, is called utilization management. We always make sure that it is the right diagnosis, the right patient, being treated with the right methodology, through the right provider. And so, if you think about it, we already have products in the marketplace that costs hundreds of thousands of dollars. But making sure that you have the right patient, that they are getting the right product, that there is not a competitive product that actually works just as well at a lower price, making sure it is the right provider, are all parts of the keys to making sure were using our dollars the best, and getting the best clinical outcomes.
You wrote in your blog that “the health care system isn’t set up for this type of economic model.” What can drugmakers, policymakers, patient groups, payers, and pharmacy benefit managers do to create a feasible economic model that is accessible for patients?
There are a lot of things we can learn from other examples in health care. Organ transplants often do not result in a cure, but rather a demonstrable improvement in patient quality of life. They come with a high bill for a one-time procedure, along with ongoing immune suppression. This is even more dramatic in that you could have a child with a degenerative eye disease or someone with hemophilia, and you can give them a one-time treatment. If we are lucky, it may actually be the last time they have to be treated for that condition.
So, we have to come up with new models because the ongoing payment model is not going to work. And so, are there ways to amortize the cost over time? Are there ways to create risk pools that people can access to pay for it over time? And most importantly, can we do value-based contracting where, if the product does not work as billed, that is it loses effectiveness over time, are the pharmaceutical manufacturers and biotech companies willing to share risk with the payer community so that we’re not paying a premium price and not having a premium outcome?
What do you believe are some components of a new payment model that are necessary to accommodate gene therapies?
One of the things that may be unique for this is that if the price is really extraordinarily high—let’s say the price for a therapy is over $1 million—and you want to amortize it over time, then you can see the beauty of having a value-based contract, where if that product quit working you could reduce the payments. It puts the pharmaceutical company at risk, but it also gives the payers some reassurance that when they are paying a premium price, they are getting a premium outcome. But that would also require, perhaps, portability. That is, if someone switches from one carrier to another, then what happens to those downstream payments? Are they going to be paid for by the initial company who you paid your premiums to, or are they going to paid for by the company you are moving to? Who is actually getting the benefits?
There is going to be a lot of work that has to be done across the payer community to figure this out, and we’re going to have to come up with two new payment models that just don’t exist today.
In your professional opinion, what does the future of gene therapy hold from a payment perspective?
As you can tell, I am an optimist. I really am excited. This is much different than it was 15 years ago with cystic fibrosis treatments. I really believe gene therapy is here, it is going to work, and we need to make these products available to patients because it is truly a great advance forward. But just like the biotech companies and pharmaceutical companies are being innovative, we as payers have to hold ourselves to the same bar, and we have to become innovative in the ways we pay for these things. There will be enough money there; we can’t allow these products to fail just because we can’t figure how to pay for them.
References
1. FDA approval brings first gene therapy to the United States. Food and Drug Administration website. https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm574058.htm. Published August 30, 2017. Accessed October 2, 2017.
2. Simon S. FDA approved CAR T cell therapy for pediatric acute lymphoblastic leukemia. American Cancer Society website. https://www.cancer.org/latest-news/fda-approves-car-t-cell-therapy-for-pediatric-all.html. Published August 30, 2017. Accessed October 2, 2017.
3. Miller S. Gene therapy holds great promise, but big price. Express Scripts website. https://lab.express-scripts.com/lab/insights/drug-options/gene-therapy-holds-great-promise-but-big-price. Published September 21, 2017. Accessed October 2, 2017.
