Research on gene-therapies began in 1960 with the hypothesis that introducing DNA sequences into patients’ cells could cure genetic disorders. Decades of research have made these therapies a reality with current treatments for spinal muscular atrophy (ZOLGENSMA®), certain blood cancers (CAR-T R®), and an inherited eye disease (LUXTURNA®).

While gene therapies are often administered once or twice over a patient’s lifetime, they are life-changing and lifesaving. However, the price and complexity of balancing costs and patient outcomes are challenging for benefit payers.

The three current FDA-approved gene therapies boast price tags ranging from $850K to $2 million per dose. With limited therapies on the market, the cost to payers has been relatively low. However, the manufacturing pipeline has over 2,000 ongoing global clinical trials, with predictions that 2022 will see 75,000 patients eligible for some cell or gene therapy with expected costs of over $15 billion.

The novelty of gene therapies and their unique manufacturing process contribute to their high price. Manufacturing gene therapies is a new, evolving process that requires more technology and talent than manufacturing traditional therapies.

Cost is only part of the complexity of gene therapies for payors. Gene therapies are different from traditional therapies in that they can’t be lumped together in therapeutic classes or coverage tiers. The considerable variation in cost across treatments t makes neat coverage categorizations difficult.

Likewise, administration differences between gene and traditional therapies impact costs and outcomes. Most gene therapies are only administered once or twice in a lifetime with payment upfront. Meaning a plan may pay for treatment without seeing the benefits accrue if the patient is no longer on the plan or ages out of coverage. Traditional therapies are administered first and paid for overtime as the prescription is filled, allowing benefits and payments to accrue incrementally.

Gene therapies are a complex component of the tedious balance between cost containment and patient outcomes that payers face. However, industry stakeholders are working to find solutions. Insurance carriers, manufacturers, and consultants are working to find financial solutions from custom stop-loss models to carve-out programs to value-based contracts.

Gene therapies are changing the game for patients and their families, and employers should work to design a sustainable benefits strategy that includes gene therapy. Coverage, financing, and outcomes are all major considerations when implementing a solution. (3) Pharmacy is ever-evolving, and it is the responsibility of payers to evaluate their plans and work for solutions that support patient health and well-being.

PCM is a digital healthcare company providing unparalleled transparency into pharmacy and medical plans. Our interactive platform gives users visibility into high-cost drugs, and our insights and tools offer actionable solutions to contain costs and improve patient outcomes. To see how PCM is impacting high-cost drugs, click here.

Published: February 24, 2022