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Mitigating payer-identified risks in cell and gene therapy development

As the case with several therapeutics, developers struggle to balance between clinical and commercial objectives. In a recent webinar, Drs. Emily Woodward and Max Vargas touched on the battle between these two objectives, among other access and reimbursement considerations, in the world of cell and gene therapy (CGT) development. CGT approaches seek to modify genetic material to improve functioning or fight disease. Specifically, gene therapy uses genetic material, or DNA, to manipulate a patient’s cells for the treatment of an inherited or acquired disease. While cell therapy infuses or transplants cells into a patient to treat an inherited or acquired disease.

The clinical development of these therapies often occurs at an accelerated pace due to highly unmet, urgent patient needs. One of the unique value propositions of these novel therapies is the long-term benefit from one-time administration, eliminating the need for ongoing treatment. As a result, these therapies also often come with heavy upfront costs, which can be burdensome for payers and has created a need for alternative payment and reimbursement models and additional considerations when evaluating risks.  Developers should consider the following three payer risks and begin to address them throughout the development process:

1. Actuarial uncertainty

A hurdle presented by the accelerated development of CGT is determining how many eligible patients will be in the insurance pool Thinking about this number early can mitigate this risk, as decisions made early in development have commercial implications. In addition, payer and regulatory involvement early on can help developers shape this patient pool and identify potential inclusion and exclusion criteria for clinical studies. Tight alignment in these areas in early stages of development can help developers meet both clinical and revenue objectives.

2. Therapeutic performance

Surrogate clinical data using accelerated approval processes has limitations when it comes to translation into long-term real-world effectiveness. For CGT, specifically, payers are concerned with the durability and ongoing performance of these novel therapies. Will the one-time therapy administration yield lifetime patient benefits? To ease these concerns, developers should engage regulatory and payer stakeholders early and often in the development stages to ensure that the endpoints measured in clinical trials are actually predictive of long-term benefits. In later stages, looking at risk mitigation from a payment perspective, developers and payers can utilize payment models dependent upon outcomes and performance, such as include outcomes-based rebates, retroactive rebates, deferred payments, and rebate guarantees. Alignment on clinical design, utilization of non-traditional data sources, and development of alternative payment strategies have proven successful for several developers, as demonstrated through case studies in the webinar.

3. Payment timing

The one-time administration of CGT comes with a high upfront cost ranging from six to seven figures. The cost efficiency of these therapies depends upon the extension of clinical benefits over several years. As payer infrastructure is typically set up to accommodate ongoing administration of therapeutics, innovative and disruptive payment models will need to be established to tackle the novel payment structure of these therapies. Outcomes-based and retroactive reimbursement models can be effective in not only alleviating therapeutic performance risk, but also payment timing risks. One method mentioned in the webinar as a case study involves the return of all cost offsets of ongoing therapy to the payer. Most CGTs will require some form of payment innovation, which will require close collaboration from multiple stakeholders to be successful and cost effective.

To find out more, watch the webinar:

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By: Ivy Lee

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