- While the life-changing and life-saving potential of gene therapies is tremendously exciting, finding ways to pay for these treatments is a significant challenge for families and payors.
- With prices for a single treatment as high as $2 million, many employers are struggling to find ways to offer coverage without bankrupting their health plans, or even their companies.
- Newly released CVS Health white paper outlines four key approaches that health plans and employers can utilize to reduce the cost impact of gene therapies.
The promise of alleviating a significant amount of suffering could mean that gene therapies are cost-effective — at the right price point. Gene therapy has shown tremendous promise for people living with genetic disorders. While these life-altering therapies are exciting, they are also come with high price tags, leaving us to ask – how can we pay for these expensive drugs?
Defining Gene Therapy
Gene therapies use a target gene that expresses protein products at a sufficient level to cure or at least ameliorate, a disease caused by a genetic defect. So far, the U.S. Food and Drug Administration (FDA) has approved a handful of gene therapies to treat serious diseases that were previously untreatable except through supportive measures. The European Medicines Agency has approved a few more than the FDA — and there are many more in the pipeline.
Estimating the precise cost impact of gene therapies is very complicated and challenging. It is unclear how many patients with a particular condition may be treated with a given therapy or exactly how much the treatment will cost.
To help plan sponsors estimate the impact of these treatments, CVS analyzed the projected cost in a newly released white paper based on
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– Publicly available information about therapies in development
– Likelihood of approval Estimated prevalence of those conditions
–Lowest estimated cumulative five-year cost impact based on a price of $1 million and 30 percent market penetration
– Highest estimated cumulative five-year cost impact based on a price of $2 million, and market penetration of 40 percent for ex vivo therapies, and 60 percent for in vivo therapies
Today, there is not enough patient follow-up data yet to know whether they will truly be “cures” or if the diseases will eventually return. Even if they are not truly cures that are sustained over a patient’s lifespan, the promise of alleviating a significant amount of suffering could mean that gene therapies are cost-effective — at the right price point.
As it stands, the huge, initial costs are clouding that promise. Due to the potentially prohibitive costs, some employers are considering excluding ultra-high cost gene therapies from their plan benefit coverage. However, doing so might be short-sighted if the treatments are proven to be as truly effective long-term as they appear to be today. As a result, that can be a tough rationale to accept for plan sponsors facing a large, one-time burst of spending, here and now.
To address the cost-access conundrum, CVS Health has developed a four-pronged strategy for health plans and employers to reduce the cost impact of gene therapies:
1. Extend the National Medical Excellence (NME) Program Model – Address medical benefit costs associated with gene therapies by expanding NME program model to enable expert care coordination and keep costs in check.
2. Evolve the Role of Specialty Pharmacy – Enable specialty pharmacies to purchase gene therapies directly from manufacturers to reduce cost impact across the drug supply chain.
3. Implement Value-Based Contracting – Tie reimbursement to an expected outcome to minimize risk to payors and provide long-term real-world efficacy data.
4. Create Financial Protection Plans – Minimize risk for smaller companies and organizations by creating new insurance products that ensure access and protect the financial viability of their benefit plan.
Source: HIT Consultant