Industry Grapples With How to Cover Gene Therapy


Members, as well as health plans, pharmacy benefit managers, plan sponsors, and reinsurers want to know how to fund these expensive treatments to ensure positive outcomes.

Gene therapies cure or treat a condition by inactivating, introducing, or replacing a modified or new gene.

These therapies carry life-preserving and life-saving benefits, profoundly affecting recipients and their families. But they are also extremely expensive. A new therapy might save a loved one, while simultaneously bankrupting a household or causing other significant financial strain. These extremes have led to some recent innovations outside the therapies themselves, specifically related to financing and payment models. From members to health plans, pharmacy benefit managers (PBMs), plan sponsors, and reinsurers, the entire industry is grappling with how to cover, fund, and ensure the best outcomes for these new treatments.

To date, most plan sponsors and self-funded employers have relied on their stop-loss policies to cover high-cost gene therapies. There were no other options, until now. But alternative funding models were recently introduced that were specifically designed to address this growing market need. For each solution outlined below let’s try to understand 3 primary elements: breadth of coverage and approach to new entrants (coverage); ability to negotiate and financial risk transfer versus amortization (financing); and patient support model and use of outcomes-based contracting (outcomes).

Embarc Benefit Protection (Cigna/ESI)

Evernorth announced its Embarc Benefit Protection in late 2019. It was the first broadly marketed solution to specifically target the administration, coverage, financing, and patient support of high-cost gene therapies. Evernorth has the distinct benefit of drawing upon deep expertise, relationships, and resources across entities including Accredo, Cigna, eviCore, and Express Scripts. Plans pay a per-member-per-month (PMPM) fee to participate, transferring the financial risk. Providers submit for prior approval. Once approved, members receive treatment at no out-of-pocket cost. The program covers Luxterna and Zolgensma but may be expanded as more gene therapies are approved.1,2

Optum Gene Therapy Risk Protection (UHC/Optum)

Optum will launch its response to gene therapies in January 2022. It is a narrow reinsurance product, like Evernorth's, whereby plan sponsors pay a PMPM fee in exchange for coverage of specific gene therapies. Optum's program is expected to include Luxterna and Zolgensma, as well as 2 other gene therapies expected to enter the market in the next year, possibly Lenti-D and NSR-REP1. In addition to prior authorization and utilization management components, Optum's program includes care management services to support member navigation of the process and therapy administration. Further, Optum notes it will negotiate outcomes-based arrangements with manufacturers, tying successful results to the investment made and a framework for recourse if clinical outcomes are outside expectations.3,4

GCIT Network (Aetna/CVS)

CVS Health has taken an interesting approach. A stop-loss-type product underwritten by Aetna is available, covering specific gene therapies for self-funded groups that do not have stop-loss covering such treatments. Separately, and as an alternative, CVS has released an installment or payment plan for gene therapies. In this arrangement, the plan sponsor is responsible for the full cost of treatment, but it can amortize the amount over many years. In October 2021, CVS announced the launch of its Gene-Based, Cellular and Other Innovative Therapies (GCIT) network. The program will start January 2022 and will cover Luxturna, Spinraza and Zolgensma. GCIT will leverage a specific network of 75 designated providers that manage administration, medical management, and sourcing of the treatment and is intended to further support existing financial programs.5-7

PreserveRx (Prime/BCS)

Prime Therapeutics, in partnership with BCS Financial, launched a reinsurance solution in 2020 called PreserveRx. Similar to competitor solutions, Prime's offering charges a PMPM fee and reinsures eligible members that incur costs from two current FDA-approved gene therapies: Luxturna and Zolgensma. As additional FDA-approved gene therapies enter the market, they can be added to the reinsurance coverage for an additional PMPM fee. PreserveRx combines Prime's in-house clinical analytics, expertise, and integrated data sets with the financial risk mitigation of BCS’s gene therapy reinsurance product. There are additional high cost claimant insurance solutions available through the BCS RiskNavigator program, such as Stop Loss GT, as well as through the Blue Cross Blue Shield umbrella, which includes their Blue Distinction Centers for Gene Therapy within the broader suite of Blue Distinction Specialty Care centers.8,9

Alternatives to the big names

There are many other programs and solutions designed for or targeted at the space, beyond those offered by the industry's largest. MedImpact and OutcomeRx both offer compelling reinsurance products. Like those above, these function as carveouts for specific, covered gene therapies in exchange for PMPM fees. PayRx offers a solution that combines a financing and risk transfer mechanism with proprietary analytics, whereby it attempts to identify patients who could benefit most. August Care has a similar financing and risk transfer solution to PayRx, but instead of analytics, it focuses more on strict outcomes-based contracting and therapy warranties. Real Endpoints focuses on facilitation of performance, market aggregation of a member pool, and outcomes-based contracts among manufacturers, PBMs, and plan sponsors.10-13

Each of these products and solutions has advantages and shortcomings. The big names have a clear edge, though. A comprehensive gene therapy offering will truly require a blending of care management, health plan, PBM, and reinsurance expertise and resources. The marketplace will continue to transform, while perpetually in flux. It will be interesting to see how other vendors disrupt and innovate, keeping the big fish on their toes.


Those seriously evaluating these options should ask a lot of questions. They may also want to enlist the expertise of a trusted advisor, such as a benefits consultant or broker. Here are some considerations and questions to have handy:

  • Are there any limits? For example, cost thresholds per-patient or per-year, number of therapies covered per-patient or per-year, or per-patient, per-therapy limits.
  • How will newly approved therapies be evaluated for coverage and incorporated in the future? How will this affect the fees or premiums paid? For example, if the FDA approves a new therapy, is it automatically added to the coverage in effect, or is it added later, such as at renewal? If added mid-policy period, do the fees or premiums change mid-year or only at renewal? Given the pipeline, understanding how new releases will be handled is important.
  • What care management and member support programs are offered? How are clinical outcomes measured and tracked, and what types of recourses are offered if clinical outcomes are below expectations? Plan sponsors who are funding these therapies, regardless of the financial mechanism, should receive assurance of the clinical outcomes and be able to hold stakeholders responsible for poor performance.
  • Will this program be duplicative of existing coverage? Those purchasing carveout gene therapy solutions, should make sure that they are not also paying for coverage under a stop-loss policy, or they are doubly covered. Ask for a reduction in premium on the stop-loss policy for the covered members, therapies, or treatments, as this risk will be covered and held separately under the new program.


More gene therapies will be released next year, followed by even more in 2023 and beyond. The pipeline is quite full, with more than 1000 cell-, gene-, and tissue-based therapies in development globally, and the FDA expects to approve 10 to 20 annually by 2025.14

Affected individuals are brought squarely into focus for no other reason than the cost of therapy required to keep them alive or healthy. This carries long-term consequences and is complex and multidimensional. This does not fit neatly into a spreadsheet or reflect appropriately in a simple return-on-investment (ROI) calculation.

To be successful long term, these solutions must take a member focus.

Stakeholders should be aligned and incentivized to maximize clinical outcomes. Structures should strive to minimize administrative burden, avoidable waste, and importantly, cost. Placing too much emphasis on the immediate financial exchanges is short-sighted. If members do not have favorable outcomes, long- and near-term costs will inevitably be higher. Negotiate for drug-cost discounts, hold stakeholders accountable for outcomes, spread the remaining financial risk, and wrap it end-to-end with a compassionate and comprehensive care model.The byproduct will be happier, healthier members and/or a higher ROI.

The industry will continue to adapt, as it always has. Although challenging, there is still tremendous opportunity.


Wes Smith, FSA, CERA, MAAA, is senior vice president of advisory and consulting at Certilytics in Louisville, Kentucky.



  1. Dearment A. Cigna creates new program to pay for high-price gene therapies. MedCity News. September 8, 2019. Accessed December 29, 2021.
  2. Embarc Benefit Protection. Cigna. Accessed December 29, 2021.
  3. High-cost gene therapies. Optum. Accessed December 29, 2021.
  4. Gene therapy risk protection may help cover therapies and manage financial risk. United Healthcare. March 9, 2021. Accessed December 29, 2021.
  5. Torrence R. Aetna rolls out in-network coverage for Zolgensma, other multimillion-dollar gene therapies. Fierce Healthcare. October 29, 2021. Accessed December 29, 2021.
  6. Aetna launches gene-based, cellular and other innovative therapies™ (GCIT) designated network. CVS Health. News release. October 27, 2021. Accessed December 29, 2021.
  7. Gene therapy solutions from the big 3. MarshMcLennan Agency. Accessed December 29, 2021.
  8. Prime Therapeutics launches PreserveRX (SM) gene therapy financial protection. Prime Therapeutics LLC. News release. April 6, 2020. Accessed December 29, 2021.
  9. Blue distinction specialty care. BlueCross BlueShield. Accessed December 29, 2021.
  10. Financing and reimbursement of cures in the US. Massachusetts Institute of Technology. June 16, 2021. Accessed December 29, 2021.
  11. The surprising impact of gene therapies. MedImpact. Accessed December 29, 2021.
  12. OutcomeRx, a division of CareMetx, LLC announces first independent reinsurance product for rare disease specialty, cell and gene therapies. Outcome Rx. News release. November 6, 2020. Accessed December 29, 2021.
  13. Financing the future of pharma. PayRx. Accessed December 29, 2021.
  14. Statement from FDA Commissioner Scott Gottlieb, M.D. and Peter Marks, M.D., Ph.D., Director of the Center for Biologics Evaluation and Research on new policies to advance development of safe and effective cell and gene therapies. FDA. January 15, 2019. Accessed December 29, 2021.
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