Market Access Uncertainties Impacting Commercial Uptake of Gene Therapies

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 patient 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.

The approach to market access requires a radical rethinking to ensure that patients who could benefit from these gene therapies have timely access. There is a legitimate concern that the sizable one-time upfront payment for these expensive therapies might pose an undue burden on the healthcare system. However, given that the lifetime cost of treating many genetic conditions is significantly higher than the one-time cost of these gene therapies, it is essential to evaluate long-term clinical and cost-effectiveness tradeoffs associated with these therapies. As the sector grows, manufacturers must explore new commercialization models to collaborate with providers, payers, and policymakers to optimize market access to these therapies. This article will examine key commercialization uncertainties that may hamper the successful adoption of exciting novel gene therapies.

The gene therapy sector is slowly coming into its own

The AMA has identified ~4,000 diseases linked to gene disorders, including cancer, cystic fibrosis, hemophilia, Parkinson's, Alzheimer's, and ALS. Approximately 10% of the US population (30+ million people) suffer from diseases linked to genetic disorders. Two recently launched gene therapies (Luxturna® and Zolgensma®) are seeing early commercial success. Luxturna (voretigene neparvovec-rzyl), approved in Dec 2017, is an adeno-associated virus vector-based gene therapy indicated for treating patients with confirmed biallelic RPE65 mutation-associated retinal dystrophy. Zolgensma (onasemnogene abeparvovec-xioi) approved in May 2019, is an adeno-associated virus vector-based gene therapy indicated for the treatment of pediatric patients less than two years of age with spinal muscular atrophy (SMA) with bi-allelic mutations in the survival motor neuron 1 (SMN1) gene.

Several new companies with exciting 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 therapies in the clinical development pipeline. Some prominent gene therapies expected to enter the market soon includeBiomarin’s Valoctocogene roxaparvovec (BMN270) for Hemophilia A and Bluebird Bio’s Lentiglobin for Thalassemia & Sickle Cell Disease.

Market access challenges and health economic burden

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 to partake in gene therapy gets challenging, especially in situations where the conditions are not life-threatening. There is no fair way to compare gene therapy costs with other currently available medications directly. 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.

a) Long-term effectiveness must be established.

Though gene therapies offer the promise of a potential cure for patients, the likely efficacy and durability of these gene therapies tend to vary, and their long-term effectiveness must 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. The real-world studies could address these perplexing issues and empower stakeholders to make optimal medical and access decisions.

b) 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 (refer to the figure below). 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.

c) Gene therapies must compete and co-exist with other treatment modalities

Gene therapies could be the only treatment option for patients dealing with certain genetic diseases with high unmet medical needs. However, if other treatment options (surgery or medications) exist, gene therapies have to compete or co-exist with them. For example, in Sickle Cell Disease, gene therapies are in late-stage development. When approved, they have to compete with an existing curative treatment (allogeneic HSCT) and most recently approved medications (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.

d) 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 treatment for hemophilia costs $1-3 million per patient, treating the entire US patient population could cost $20 to 60 billion. However, assuming that these treatments are durable one-time curative treatments, these costs must be compared with lifetime costs for these patients. Currently, hemophilia treatments alone (without accounting for indirect disease management costs) are estimated to cost upwards of $4.6 billion a year (per 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.

e) Payers are taking incremental approach to coverage decision

Though our healthcare system currently covers specific expensive one-time procedures (e.g., most transplant surgeries cost over half a million), 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 CMS position on gene therapies is still evolving and leaning towards 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 of gene therapies opens avenues for outcome-based contracts.

New payment models may lessen near-term cost burden

For Zolgensma®, Novartis has negotiated a five-year pay-over-time option with Accredo Health Group and outcomes-based contracts with both commercial and 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.

Summary

The early commercial success of gene therapies has laid the foundation for the sector to overcome market access challenges. The marketed gene therapies have provided signals to investors on the potential risk vs. reward associated with these investments. If the ultimate goal is to help patients gain access to these exciting therapies, both manufacturers and payers face some difficult choices in balancing scientific innovation, social responsibility, and shareholder expectations. In the long run, it is highly likely that the advances in science and technology could drive efficiencies and bring down development and manufacturing costs significantly, which will make these therapies cost-effective and facilitate broader patient access. Now, the critical question is, “how do we gain stakeholder alignment on the value of these therapies and ensure that the patients who benefit most can access them timely?"

Subbarao Jayanthi, Managing Partner, RxC International