Gene therapy, once a topic of science fiction, is now becoming a reality in the healthcare marketplace and promises to profoundly impact how we treat numerous genetic diseases. Recent approvals of CAR-T therapies for end stage malignancies and Luxturna™ for a rare form of blindness are changing the treatment paradigm. While the theorized “one and done” nature of these treatments is attractive, the extreme cost of these agents represents a challenge to the US healthcare marketplace.

Unfortunately, today’s healthcare marketplace isn’t really set up for the economics of gene therapy. Payers in the United States generally have members only for a few years, and prescription savings are primarily generated via rebates accumulated over time from chronic therapy. Given the private enterprise nature of health insurance, payers often focus on short-term, profitable results. Thus, gene therapy’s high upfront cost, with benefit potentially decades in the future, doesn’t align well with the current model.

Precision Value & Health (PVH), to understand payer attitudes and future expectations regarding gene therapy, conducted its Rapid Pulse™ survey. PVH gathered responses from 25 payer and IDN decision makers on current and future challenges of gene therapy.  The respondents, 15 pharmacy directors and 10 medical doctors, covered 108 million lives. The results were recently presented at the AMCP’s Annual Meeting in Boston.

Alternative payment models have been proposed to address the financial challenge of gene therapy.  More than a quarter of respondents stated that they had a value-based agreement in place for at least one of the currently approved gene therapies (Yescarta®, Luxturna, or Kymriah®). Payers were most interested in outcomes-based agreements for gene therapy, with 56% being interested or very interested. Nearly all respondents (92%) stated they had the operational capabilities to implement an outcomes-based arrangement. Annuity payments has attracted attention as another method for payers to finance gene therapy. However, only 16% of respondents were interested or very interested in this payment type. Yet there is hope for the future, as 72% attested to having the operational capability to accept annuity payments.

Payer concerns for managing gene therapy were almost evenly split between selecting appropriate patients, the potential need for retreatment, and patients leaving the plan shortly after treatment. To address some of these concerns, 72% of respondents described “durability of response” as the top information need, followed by gene therapy pipeline information (20%).  These needs present an opportunity for manufacturers: 88% of respondents indicated that the most valuable resources that manufacturers could provide to payers regarding gene therapies included information on durability of response and profile of an appropriate patient; 60% wanted a model of long-term economic benefit.

The bottom line: Gene therapy presents unique challenges in a changing market. Payers are looking for guidance and partnership from manufacturers in making these new therapies available, while manufacturers able to provide resources to meet payer needs will find an advantage in access.