The six-figure prices of new gene therapies will require payers, pharma companies, policymakers, and pharmacy benefit managers (PBMs) to develop new payment models that ensure patient access while reflecting the value delivered by the new treatments based on clinical outcomes, a top executive with PBM Express Scripts asserts.
“Gene therapies will require payment and patient care systems that are as novel as the medications themselves,” Express Scripts CMO Steve Miller, M.D., wrote in a commentary posted online yesterday on the PBM’s blog.
He said Express Scripts was working with drug makers, policymakers, patient groups, and payers on innovative approaches toward accessible gene therapies: “Ideas on the table include paying for a treatment over time, establishing insurer risk pools, and financing one-time payments.”
Dr. Miller has publicly discussed the financing idea previously, telling The New York Times earlier this month he envisioned a plan similar to a mortgage on a house, where an insurer would pay a large portion of the cost upfront, when a patient is treated, then make regular payments until the entire bill is paid or the disease returns.
And last year, MIT researchers Vahid Montazerhodjat, Ph.D., and Andrew W. Lo, Ph.D., joined David M. Weinstock, M.D., of Dana-Farber Cancer Institute, Harvard Medical School, and the Broad Institute of MIT and Harvard in proposing “health care loans (HCLs)—the equivalent of mortgages for large health care expenses.” HCLs would be linked to clinical benefit, they wrote, “and should help lower per-patient cost while incentivizing the development of transformative therapies rather than those that offer small incremental advances.”
“From an economic perspective, the difference between cures and mitigators is much the same as that of buying a home versus renting one,” the researchers wrote in a study published in Science Translational Medicine. “Although the former is considerably more expensive than the latter, home mortgages extend access to more buyers by distributing payments of the purchase price over a longer horizon.”
Yet financing raises several questions: How much more would poorer patients be charged for new gene therapies than affluent patients due to weaker credit? How well could patients handle the higher interest expenses, and would they also make new treatments cost-prohibitive? Also, if a patient changed insurers, would the new insurer continue paying for a treatment administered long before the switch?
Kymriah: ‘Sustainability’ vs. ‘Excessive’ Cost
Dr. Miller cited the $475,000 price of Novartis’ Kymriah™ (tisagenlecleucel), the chimeric antigen receptor T-cell (CAR-T) treatment approved August 30 by the FDA as the first gene therapy to be available in the U.S. While Novartis’ price was lower than the $600,000 to $750,000 range speculated by some analysts, it remains much higher than the cost of other specialty drugs, he noted.
Dr. Miller wrote that high prices for Kymriah and other gene therapies reflected the desire of biopharmas to maximize their single opportunity per patient to get paid, since the treatments require only a single administration rather than chronic use. Because many gene therapies target extremely rare diseases, he added, fewer patients can share the cost that drug developers contend is needed to justify the expense of research, development, and commercialization.
Kymriah is indicated for the second-line (or later) treatment of relapsed or refractory (r/r) patients up to age 25 with B-cell acute lymphoblastic leukemia (ALL). The NIH’s National Cancer Institute estimates that only approximately 3100 patients aged 20 and younger are diagnosed with ALL annually.
Novartis has defended its pricing for Kymriah: “We believe it will support sustainability and access while allowing Novartis a return on its investment,” the pharma’s CEO of oncology Bruno Strigini, Pharm.D., said on a conference call the day Kymriah was approved.
But Patients for Affordable Drugs, a national patient group that advocates exclusively for policy changes to cut the cost of prescription medicines, disagrees: “While Novartis’ decision to set a price at $475,000 per treatment may be seen by some as restraint, we believe it is excessive.”
“Novartis should not get credit for bringing a $475,000 drug to market and claiming they could have charged people a lot more,” the group said in a statement following Kymriah’s approval. “As the number of patients eligible for Kymriah expands, will Novartis lower the price? When the drug is approved in other countries, will U.S. taxpayers be charged more than citizens of other nations?”
1,500 Gene Therapies in the Pipeline
The group has argued that the problem goes beyond Novartis and Kymriah: “The drug pricing system in America is completely broken. Until policy in this country changes, the vicious cycle of patients struggling under high drug prices will continue.”
Novartis has also sought to address Kymriah pricing by noting it has developed programs to support safe and timely access to the treatment, including support for patients pursuing insurance coverage and financial assistance for uninsured or underinsured patients.
One example Novartis has cited was a collaboration with the U.S. Centers for Medicare and Medicaid Services (CMS) aimed at ensuring access for Kymriah’s patient population by setting “value-based” pricing.
Other value-based approaches related to future indications for Kymriah and CAR-T cell therapies are under discussion, Novartis said.
The call for new payment models was one of two noteworthy aspects to Dr. Miller’s blog post, said Umer Raffat, an analyst with Evercore ISI.
The other, he said, is the deep pipeline of new gene therapy treatments, which according to Express Scripts includes more than 1500 potential treatments are in R&D phases by “dozens” of pharmaceutical companies—including nearly 600 targeting cancers and 500 for rare and debilitating or deadly conditions.
“I can’t tell if he was simply acknowledging the amount of progress in this area, or also alluding to the size of how large this orphan market could eventually become in aggregate,” Raffat said.