Asembia ASX26: Building Value-Based Care Models for Cell & Gene Therapy: Q&A with Will Shrank

While advances in cell & gene therapy continue to show promise for creating new treatments, this sector of the industry still faces a major hurdle: the high costs. Whether it’s on the R&D side or delivering and administering the treatment to the patients, cell& gene therapies are expensive.

Pharmaceutical Executive spoke with Aradigm Health CEO Will Shrank at the Asembia ASX26 Summit in Las Vegas. During the conversation, he explained the issues the payers face with cell & gene therapies, along with the strategies that the industry is using to move forward with these treatments.

Click here for the video version of this interview!

Pharmaceutical Executive: What causes the biggest strain on the development of infrastructure for sustainable cell & gene therapy?
Will Shrank: I wish there was just one thing that I can point to and say is the biggest problem, and let's solve it. We have a really fragmented way that we pay for and deliver care in the US, and it's absolutely interfering with everybody along across the healthcare ecosystem ability to advocate for and produce/provide affordable, sustainable access to these therapies.

It's hard for providers who don't know how much volume they're going to get and how much they're going to get paid for these therapies to invest sustainably in creating a business model to deliver these therapies. It's hard for purchasers, whether it's a payer or a self-insured employer, to think about these upfront costs in the setting where patients/members don't stay with them.

It's hard for manufacturers, who had some really unimpressive launches with incredible products, to price these therapies in a way that support market access. Ultimately, it calls for an ecosystem approach, a more systemic approach, that requires us all to take a step back and think about how everyone across the ecosystem gives a little, sits at the same table, and we can get a lot.

Pharmaceutical Executive: How can payers overcome the rising costs for cell & gene therapies?
Will Shrank: This is a real challenge for payers, even the big payers and massive employers. The volume that you need (the number of patients, members, or employees) to be able to accurately predict cost and manage the risk is enormous because of the volatility, spikiness, and unpredictability.

It's hard for any payer or self-insured employer to address the breadth of these ecosystem challenges on their own. Ultimately, this really calls for a moment of collective action, a moment where by participating together, the industry can create a lot more scale and leverage.

With broader risk pooling, you can really smooth out the risk and create much more predictability. And ultimately, you have the scale to be able to cut to partner more progressively and more creatively with providers and manufacturers, and really deliver a more affordable, sustainable product.

Pharmaceutical Executive: Can you describe the 'entirely pass-through' business model?
Will Shrank: The has been an overwhelming call for more transparency with how we pay for care, and there is a sense that a lot of folks along the process and supply chain (often described as middlemen or middle people) take little chunks.

The lack of clarity on what those chunks are creates a lot of distrust, and frankly, does create meaningful amounts of waste. Transparency is really critical to build the trust we need to create sort of these sustainable business models. Our approach, as a carved-out benefits manager, is we just charge an admin fee. It's totally transparent.

It's clearly described to customers. Every penny that either is part of our admin fee or administrative costs in the product are disclosed to customers so that we can really get aligned around what we're paying for and trying to accomplish.

That way, if and when we produce meaningful savings, or if and when there are opportunities to have dollars left over at the end of the year, it all gets returned to the purchasers entirely as a dividend. We do not, we do not have any incentive to withhold treatment or reduce access.

Pharmaceutical Executive: Are payers embracing value-based care models for cell & gene therapies?
Will Shrank: They are. This is a category that's somewhat different than our history with value-based contracting for drugs. I say this with a lot of humility. When I worked at Humana, when I worked at UPMC, we had a lot of value-based contracts with manufacturers. I think they, frankly, were a little bit more window dressing than they were true alignment of financial interest between the manufacturer and the purchaser.

Where we've fallen down in the past is it's been hard to get aligned around measurement. It's been really hard to determine what the counterfactual would be for these therapies that often can cost millions of dollars and purport to be a cure, where the outcome is binary, either it's cured or not.

It's a lot easier to get aligned around those outcomes. So, if somebody receives a therapy for hemophilia and they are readmitted to the hospital with a bleed, we know it didn't work. If someone's treated for sickle cell disease and they get readmitted to the hospital for a vaso occlusive crisis, we know it didn't work.

The magnitude of the cost also creates this urgency around alignment. This is the moment for us to really jump in in a much more meaningful way to create alignment around those contracts between the purchaser and the manufacturer, around outcomes and value.