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Barnes discusses alternative reimbursement plans for expensive, one-off therapies.
Treatments for rare diseases often don’t work on the same schedule as common treatments, which can make it difficult for regulators to develop reimbursement plans. Kim Barnes, Executive Vice President at Phacilitate spoke with Pharm Exec about how the market can adapt to better serve these unique, yet effective, treatments.
(Pharm Exec:) Why doesn’t the financial and regulatory framework of the Pharma industry not work for one-off advanced therapies?
Barnes: Scientific development is exceeding the reimbursement models that are currently out there. These models aren’t built for one-off treatments, which advanced therapies often are. Instead, the current framework is designed for chronic illness, so the cost of therapy is currently spread out over the course of a patient’s life. An example of that would be arthritis.
One-off therapies have high production costs, and the cost of treatments are generally very high compared to the market. Payers and regulators are not set up to pay these very costly treatments which go against the norm. There is also often a lack of real-world data because there are generally very small patient populations. These therapies are getting fast-tracked from phase one, they’re getting approved by regulators without much real-world data, which makes it much harder to get reimbursed.
There is an influx of therapies coming through Phase 3 trials, I think at the moment we have 103 coming down the line. As a result of that, I think payers need to review their reimbursement strategy and how drugs are assessed, because current assessments do not match the need of one-off treatment.
It’s important to note that the present price tags of these therapies don’t match the high production cost. This makes it hard for pharma and biotech to cover the cost of making these therapies and make production feasible. A treatment being priced at $3.2 million may sound ludicrous to a reimbursement agency, however that is the cost of making these treatments right now and biotech and pharma are not making profit from this.
Where we’re at right now is that we have a potentially curative therapy coming through the pipeline, but patients are unable to access them because the value proposition of these therapies have not been realized yet by reimbursement agencies across the world.
One thing we can look at going forward is we need to identify meaningful end points outside of cost and patient reach that are flexible to the nature of one-off therapies. This is central to the rebuilding of appropriate value assessments.
(Pharm Exec:) What has caused the influx of advanced therapies?
Barnes: Advanced therapies typically serve the rare disease market where there are no other treatment options available. What’s great about these gene-therapies is that they’ve been life changing for patients that have spent their whole life without a viable treatment option. Typically, they are serving a market with unmet needs. There’s an influx because this industry is genuinely passionate about helping serve these underserve patient populations, so they really do want to get their therapies and treatments for rare diseases.
Due to recent successes in the rare disease therapy field, investments have significantly increased in line with more approvals, which has given the industry the push it needs to produce these life-changing treatments. On top of the investments, the science field has come a long way. Back in 2000, gene-therapy was seen as unsafe after a few clinical trial mishaps. It was pushed aside, but that’s changed, and the approval party has absolutely moved the field forward.
Therapies coming through the pipeline are showing real promise. As a result of great clinical trial data, there’s a lot of trust being built, not just with the industry but with patients, investors, regulators, and reimbursement agencies. As this success becomes better documented, there’s more and more approvals that are more commercially viable.
(Pharm Exec:) What makes CAR-T cell therapies attractive to payers and regulators?
Barnes: CAR-T therapies have shown transformational treatment for hematologic malignancies. We’re hearing more and more success stories of people across the world that were given weeks to live and then suddenly, they’re cancer-free from CAR-T. That’s a fourth-line treatment, it’s the last treatment once they’ve gone through everything else.
With more CAR-T therapies on the market, there’s more real-world and proof-of-concept data. There’s some positive clinical trial data coming through the pipeline on some phase three therapies and CAR-T has put advanced therapies on the map as advanced treatment therapies for patients. The next step is getting these cell therapies into larger patient indications as well as making these treatments first line therapies as opposed to third line.
At the moment, these treatments are only used when all else fails with a patient. They have to go through chemo and everything before they even get access to this treatment and it’s a shame they have to go through all that when there are great treatment options for first line therapy.
(Pharm Exec:) What are the alternative models to reimbursement and regulatory guidelines that the industry follows?
Barnes: Standard reimbursement models today act on a per-unit basis, this allows the cost of the drug to be spread out over many years, which suits chronic illness and long-term treatment plans but doesn’t suit one-time payment options. To put $9.2 million up front is very different than spreading the cost out over the course of someone’s life. There are models now that we’re looking at that could spread these payments out over years rather than at a one-time singular payment. That helps get these therapies approved or payers and reimbursement agencies feel more comfortable with approving these therapies for reimbursement.
One model is outcome-based annuity. The cost is spread out over installments, and that’s paid if the drug continues to meet pre-certified criteria. If it fails in a patient, they may not have to pay all the installments. Another model would have a portion of the payment made up front, with the remainder being paid if the drug is successful. Yet another model has the payer paying the full cost up front but is reimbursed if the treatment is not successful. It’s all about the outcome.
The next step is to make sure that there is collaboration between payers, patient advocacy, developers, and industry regulators, and that must happen early in the development cycle, in phase one, not phase three. The goal is to make sure that these therapies are able to reach patients who would benefit from them, and we need commitment at all levels to make this happen.
(Pharm Exec:) What are the differences for market access between the United States and Europe?
Barnes: What we recognize is that the patient numbers in Europe are greater than the patient numbers in the U.S. in terms of lack of availability for gene therapies. There are so many patients that do not have access to these therapies, and that’s a result of the reimbursement models and these therapies don’t get reimbursed in Europe.
In Europe, if a company’s therapy gets regulatory approval, that does not mean that it will get reimbursed, which is a big difference between the U.S. and Europe. The regulators and the payers work together more than they do in Europe and the U.K. That’s a challenge because once you get through the regulatory challenges, you would hope that reimbursement would happen, but that isn’t always the case.