Gene Therapy Requires Alternative Payment Model

The approval of tisagenlecleucel (Kymriah) brings in a new era of drug reimbursement.

Recently, the FDA approved tisagenlecleucel (Kymriah)—a groundbreaking gene therapy—to treat refractory B-cell precursor acute lymphoblastic leukemia (ALL) in pediatric and young adult patients. Each year in the United States, approximately 3100 patients under age 20 are diagnosed with the condition.

Although this gene therapy, and those that are likely to follow, could change the way diseases are treated, the emergence of these drugs must coincide with collaboration among healthcare stakeholders, including payers, manufacturers, and pharmacy benefit managers (PBMs), according to Express Scripts.

Tisagenlecleucel is customized for each patient with ALL using modified versions of the patient’s immune cells. The super-charged immune cells target and attack leukemia cells.

While the price tag is lower than health experts projected, tisagenlecleucel costs $475,000 per treatment, which may threaten patient access.

Gene therapies introduce genetic material to replace faulty or missing material that causes disease, according to Express Scripts. Since patients only require 1 treatment, the costs are typically higher to offset investments related to research, development, and commercialization.

Express Scripts notes that gene therapies target rare conditions, which makes it difficult for manufacturers to lower prices.

In Europe, the only 2 approved gene therapies come with a price tag of $1.4 million and $665,000. One of the drugs failed to treat patients properly and the other is not doing well on the market because the healthcare system is not designed for the high-cost nature of gene therapy, according to the release.

In light of the tisagenlecleucel approval, the PBM is calling for innovative approaches to increase patient access to the treatment, including collaborating with manufacturers, policymakers, patients, and payers.

Implementing value-based contracting would allow payers and patients to only pay for a drug that is effective. Additionally, manufacturers and payers can join forces to set prices that are in reach of patients, while policymakers can help outline regulatory framework, according to Express Scripts.

The PBM notes that gene therapy will require the implementation of innovative payment and patient care models that align with the treatment, including paying for therapy over time, creating risk-pools, and financing, according to the release.

“A successful model must address patients who change insurers or employers, and tracking their health outcomes over time to ensure payments aren’t being made if the treatment stops being effective,” Steve Miller, MD, chief medical officer at Express Scripts wrote.

Similarly, the Centers for Medicare & Medicaid Services (CMS) is pushing for novel payment models and arrangements.

The CMS said they are working with stakeholders to consider novel payment methods for gene therapies, including value-based pricing. The agency will also provide future guidance on how manufacturers can partake in innovative payment models.