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A check on the evolving challenges and potential solutions in steering future market adoption of curative-intended treatments.
Gene therapies will revolutionize healthcare by offering potential curative treatments for patients dealing with genetic diseases. Recently approved gene therapies are showing significant promise in saving or enhancing patients’ lives. Today, the development pipeline has hundreds of gene therapies that work by replacing a disease-causing gene or inserting a new or corrected gene or directly editing genome (in vitro) in patients. Despite the enormous market opportunity this new sector presents, many challenges remain for gene therapy—the science is complex, treatments are costly, the supply chain is tenuous, and the regulatory pathway is not as straightforward as conventional therapies. And then also impacting the mix are the challenges for biopharma associated with navigating the ongoing COVID-19 pandemic.
The approach to market access in this gene therapy space requires a radical rethinking to ensure that patients who could benefit from gene and curative-type treatments have timely access. There continues to be legitimate concern that the sizable, one-time upfront payments for these expensive drugs might pose an undue burden on the healthcare system. However, given that the lifetime cost of treating and managing many genetic conditions may be significantly higher than the one-time cost of these drugs, it is essential to evaluate the long-term clinical and cost-effectiveness tradeoffs.
As the sector continues to grow, manufacturers must explore new commercialization models to collaborate with providers, payers, and policymakers to optimize market access to these therapies. This article examines lingering commercialization uncertainties that may hamper the successful adoption of exciting novel gene therapies.
The American Medical Association has identified around 4,000 diseases linked to gene disorders, including cancer, cystic fibrosis, hemophilia, Parkinson’s, Alzheimer’s, and ALS. Approximately 10% of the US population suffer from diseases linked to genetic disorders. A handful of gene therapies have been approved to date. Two notably launches in recent years, Luxturna and Zolgensma, are experiencing early commercial success. Both adeno-associated virus vector-based treatments, Luxturna is indicated for treating patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy, while Zolgensma targets pediatric patients less than two years of age with spinal muscular atrophy (SMA) with biallelic mutations in the survival motor neuron 1 (SMN1) gene.
Several new companies with promising technologies have recently attracted significant growth capital, while established biopharma companies are actively engaged in deals to expand their capabilities. Currently, there are over a hundred gene therapy candidates in the pipeline. Some prominent ones that may enter the market soon include BioMarin’s valoctocogene roxaparvovec (BMN270) for hemophilia A and Bluebird Bio’s LentiGlobin for beta thalassemia and sickle cell disease.
Once a new gene therapy gets regulatory approval, the main impediments are gaining payer market access and ensuring patient access/affordability. Physicians’ and patients’ ability toprescribe gene therapy gets challenging, especially in situations where the conditions are not life-threatening. There is no fair way to directly compare gene therapy costs with other currently available medications. Though the direct and indirect cost associated with gene therapy administration tends to be expensive, they are also offering potential curative options in most cases. Payers must incorporate them into their formularies while ensuring patient affordability. These market access challenges will compound as more gene therapies become available, and cost burden increases.
Long-term effectiveness must be established. Though gene therapies offer the promise of a potential cures, the likely efficacy and durability tend to vary, and their long-term effectiveness should be monitored. Some of the most recent evidence raises questions about the long-term durability. If this is indeed proven to be the case, then patient selection becomes even more critical if the performance tends to vary based on patient characteristics. Real-world studies could address these perplexing issues and empower stakeholders to make optimal medical and access decisions.
Covering all patients is cost-prohibitive in the near-term. The principal challenge is how individual patients can avail of gene therapies given the high cost—should they be made available to only high-risk patients? What criteria helps to assess these near-term vs. long-term clinical/cost-effectiveness tradeoffs for each patient? We show potential scenarios that could come into play when identifying the right patients for these gene therapies (See figure above). This dynamic is perhaps one of the most challenging areas for public and private payers to tackle in each disease, and stakeholder alignment is critical to ensure long-term success. The current system may find it challenging to absorb large, one-time payments but could perhaps sequence patients in the near-term until these therapies become less expensive and more broadly available to patients in the future.
Gene therapies must compete and coexist with other treatment modalities. They could be the only treatment option for patients dealing with certain genetic diseases with high unmet medical needs. However, if other options (surgery or medications) exist, gene therapies have to compete or coexist with them. For example, in sickle cell disease, gene therapies are in late-stage development. When approved, they will have to compete with an existing curative treatment, allogeneic hematopoietic stem cell transplantation (HSCT), and recently approved medicines Oxbryta and Adakveo intended to prevent vaso-occlusive crises. In these situations, physicians/payers have to personalize treatment algorithms and ensure access by weighing clinical/cost dynamics.
Rationalizing the value of potential curative treatments. The value of gene therapies is misconstrued, and often, policy experts point to their high prices without understanding the long-term health economics. For example, there are currently an estimated 20,000 hemophilia patients in the US, 80% of whom are hemophilia A patients. If a gene therapy for hemophilia costs $1 million to $3 million per patient, treating the entire US patient population could cost $20 billion to $60 billion. However, assuming that these treatments are durable, one-time curative treatments, these costs must be compared with lifetime costs for the patients. Currently, hemophilia drugs alone (without accounting for indirect disease management costs) are estimated to cost $4.6 billion a year, according to AllianceBernstein, or $115 billion over 25 years. In the long run, the macroeconomics of gene therapies could prove to be attractive, with a net positive impact on the healthcare system.
Payers are taking an incremental approach to coverage decision. Though our healthcare system currently covers specific, expensive one-time procedures (e.g., most transplant surgeries cost over $500,000), the cost burden stemming from gene therapies could put an additional burden on the system. Payers are trying to assess tradeoffs between the cost-effectiveness of these novel treatments and the associated innovation premium. In recent times, payers have covered relatively expensive rare disease products, costing hundreds of thousands per patient annually. However, they slowly realize how accumulating cost could pose even more burden in the future. The Centers for Medicare & Medicaid Services’ (CMS) position on gene therapies is still evolving and leaning toward value-based pricing and reimbursement approaches. For example, Massachusetts was one of the early states to change policies to embrace gene therapies. The ability to track the effectiveness of long-term performance opens avenues for outcome-based contracts.
For Zolgensma, for example, Novartis has negotiated a five-year pay-over-time option with Accredo Health Group and outcomes-based contracts both commercially and with Medicaid. Other new payment models will have to be developed to address challenges in the current systems. Models such as outcomes-based pricing, extended payments, reinsurance, consumer loans, third-party financing, securitization of therapies, manufacturer managed financing, and government financing are being considered. Amortization is a common theme, though it may be hard to avoid default situations without significant recourse if patients decide to forego payments in the future, and adequate penalties cannot be imposed to forestall such behavior. These models have to be further evaluated to understand their utility and sustainability within healthcare budgets.
Subbarao Jayanthi, Managing Partner, RxC International