Gene Therapy and Coverage Considerations
Assessing the trends and utilization of specialty drugs provides an opportunity to identify and predict future cost for payers. Overall spending on cancer drugs and specialty drugs is predicted to rise throughout 2021 (1), with an emerging category of drugs that will likely pose unique challenges and additional cost for payers. An article published on June 1st in the American Journal of Health System Pharmacy discusses the projected growth of novel gene therapies which have the potential to modify human genes to treat diseases (2).
Today, only 2 in vivo gene therapies have been approved by the FDA—Luxturna for inherited retinal dystrophies and Zolgensma for spinal muscular atrophy in children less than 2 years old. However, there are currently almost 400 active gene therapy trials and 31 additional agents in phase 2 or later trials, implicating the potential of many more agents to be approved and used in practice in the future.
While groundbreaking, gene therapy development also carries several implications. Cost, distribution, and payment models are vastly different from “traditional” specialty drugs. The high-cost of these drugs may significantly change how we pay for these treatments. For instance, Zolgensma comes with a cost of over 2 million dollars for a treatment for children under 2 years old. Even if only one child needs Zolgensma, the sheer cost of treatment can present financial hardship to small health plans and payers. Therefore, these novel gene therapies will require unique distribution, payment, and utilization models to ensure cost effective treatment options for both payers and members such as value-based contracting, special payment terms, restricted care sites, and mandated use of specialty pharmacies. These strategies can be appealing to payers due to predictable reimbursement methods at designated specialty pharmacies, improvement on cash flow due to special or extended payment terms, and most popularly, cost-sharing opportunities with manufacturers if the drugs do not work as expected.
The study also provides several recommendations to health systems in preparation of gene therapies entering the market. Some of the key recommendations include actively monitoring gene therapy pipeline, involving pharmacy leadership in payer relations discussions in high-cost gene therapies, and building a core team to lead billing, formulary management, operations and payer relations efforts. Above all, health systems need comprehensive gene therapy services and stakeholder engagement to provide life-savings treatments to patients who need them.