Avalere Analyst on How Payers Are Handling Cell and Gene Therapy Cost Concerns

Megan Olsen, MPH, principal at Avalere, explains how payers are attempting to get around cost concerns associated with expensive cell and gene therapies.

Megan Olsen, MPH, principal at Avalere, explains how payers are attempting to get around cost concerns associated with expensive cell and gene therapies.

Transcript:

What sort of tactics are payers utilizing to avoid cost-related concerns posed by gene and cell therapies?

Olsen: Yeah, that's a good question. And I think the answer is going to evolve as more of these products enter the market. Right now, there are really just a handful of cell and gene therapies on the market and while they are high cost individually, there are not a lot of products and they treat [a] very small patient population. So, the cumulative budget impact to payers is not as significant as it will be in the coming years. With that said, we've seen various coverage techniques, applied utilization management, certainly, and site precertification policies. We've seen coverage policies that focus more on clinical trial inclusion/exclusion criteria relative to the broader FDA label.

So, payers are looking closely at the data but we're also seeing payers think about new ways to cover and finance these products through innovative arrangements. That might be outcomes-based contracting arrangements. That might be pay-over-time or milestone-based payments, or installment payments where the payer can pay a fraction of the drug's price over a series of years rather than upfront. So, there certainly is exploration in these types of arrangements emerging. Adoption to date of these arrangements is relatively low but a lot of stakeholders are thinking ahead to 'What types of value-based arrangement constructs are payers going to be interested in, what can fit in the paradigm given the policy and regulatory constraints that exist in our system?' So, there's a lot of thinking happening in this space. One of the survey studies that we ran indicated that 65% of payers are either currently engaged in innovative contracting arrangements or interested in innovative contracting arrangements for cell and gene therapies. So, we're likely to see a lot more ideation and eventual implementation of these types of arrangements.