Gene and CAR-T cell therapies are often heralded as the future of healthcare, where ground-breaking medicines can fix or manipulate the human body to treat or even cure rare diseases. Inevitably, such innovation often comes with a price tag to match. This article will look at whether payers are truly willing to pay for innovation for gene therapies and CAR-Ts, and the impact of a high price on overall commercial success.
Lack of affordability can lead to commercial failure
Headlines seem to appear on a yearly basis proclaiming the arrival of a new “world’s most expensive drug”. These drugs, often gene or CAR-T cell therapies, are developed for rare or ultra-rare indications, where the unmet need, quality of life burden and burden on the healthcare system are all substantial. This, combined with the development and manufacturing complexity required to bring the therapy to patients, are used by manufacturers to justify an extremely high price.
The primary issue of the high cost of these therapies is one of affordability. Despite the patient numbers being very small (perhaps just ten’s of patients in a country), the healthcare systems are likely to resist paying the upfront costs of providing the therapy to the patient. Alternatively, it could be an issue of value: the payers do not believe that the evidence demonstrates that the clinical and/or economic benefit justifies the price.
The pricing and market access landscape is littered with examples where significant misalignment in the price set by the manufacturer and the value acknowledged by payers has resulted in commercial failure.
Perhaps the most famous example is the exit of Bluebird bio from Europe, announced in August 2021, where the P&R landscape for gene therapies was deemed so hostile that it forced the company to wind down it’s European operations. Specifically, president of the severe genetic diseases unit was quoted as saying “the price levels that we were seeing were not sufficient for us to move forward in Europe”. As a result of the commercial difficulties faced by the manufacturer, patients lost access to potentially life-saving medicines in diseases with severe impacts on quality of life.
Overcoming the affordability hurdle
However, the pricing and access environment within Europe and the US has evolved to allow payers to pay the high prices for innovation if they see the value in these therapies.
To aid this, manufacturers have to be proactive in offering access solutions (e.g. performance-based agreements, deferred payments) to payers that allow concerns surrounding value to be addressed. Additionally, the payer environment within Europe has been developed to include coverage with evidence development solutions. In these scenarios, temporary funding is provided to promote patient access, while the manufacturer is given the opportunity to collect more evidence through clinical trials or real-world evidence. The negotiations are revisited when the data collection period has finished, allowing payers to fully ascertain the value of the therapy. Probably the most famous example of this is the Cancer Drugs Fund (CDF) and the newly introduced Innovative Medicines Fund (IMF) in England, but such schemes are also replicated in France and Germany.
Where payers see that the value of the product, and financial structures are in place to address affordability, there is clear evidence of payers willing to pay the high price of innovation. For example Zolgensma, one of the world’s most expensive therapies, is approved in more than 40 countries (as of 2021), and generated $634 million during the first half of 2021, a 69% increase compared with 20201. Our previous articles have previously detailed these financial structures, such as Novartis’ utilisation of outcomes-based instalment payments that spread the cost over 5 years2, which helped ICER recommend Zolgensma as cost-effective.
Overall, payers are willing to cover innovative therapies, but only if they can be convinced that the clinical data justifies the high price tag. For those therapies where payers can see value, but it has not been sufficiently demonstrated to match the price tag, solutions such as ‘coverage with evidence development’ can be put in place. Remap Consulting are experts in working with manufacturers of rare disease products to help navigate the challenging and dynamic market
- Novartis has negotiated Zolgensma access for half of the European SMA population, exec says. How’d it get there? https://www.fiercepharma.com/pharma/novartis-europe-zolgensma-access-gene-therapy Accessed 01/09/2022
- Gene therapies and Managed entry agreements. How willing have payers been to cover high cost therapies such as Zolgensma and Zynteglo? https://remapconsulting.com/gene-therapies-and-managed-entry-agreements-how-willing-have-payers-been-to-cover-high-cost-therapies-such-as-zolgensma-and-zynteglo/ Accessed 01/09/2022