Payment Models Taking Shape for Advanced Therapies: Fran Gregory, PharmD

When a single treatment can cost upward of $4 million, the question of who pays, and how, becomes as critical as whether the therapy works, explained Fran Gregory, PharmD, MBA, vice president of emerging therapies at Cardinal Health. That is the challenge confronting the advanced therapy space, but it is possible for the industry to untangle this persistent problem.

The core tension, as Gregory framed it, is a mismatch between the evidence available at launch and what payers need to feel confident authorizing coverage. Clinical trials may show impressive outcomes and durability, but real-world data often lag.

"We're really urging the industry to focus in on real-world evidence proving the durability of these treatments long term in the real world," she said, emphasizing that consistent collection and publication of posttreatment patient outcomes is essential to building payer confidence.

Alongside that evidence push, Gregory described Cardinal Health's efforts to develop health economic models in partnership with manufacturers—tools designed to help payers understand a therapy's value before it ever reaches the market. These models don't just project efficacy; they quantify cost offsets. While hospitalizations for patients with cancer or chronic conditions can be extraordinarily expensive, curative or durable therapies could offset a significant portion of those downstream costs. However, this often gets overlooked in reimbursement debates, she said.

On the payment structure side, Gregory pointed to 2 emerging models gaining traction: outcomes-based contracts and annuity plans. Outcomes-based contracts tie reimbursement to whether a patient hits a defined clinical milestone, and they have grown more common over the past 5 to 6 years. Annuity plans offer a different kind of flexibility, particularly for patients who change insurers, by allowing payments to be potentially portable across coverage transitions. Both models, Gregory acknowledged, are still finding their footing, but their momentum is real.

"They're definitely starting to be more prominent in the cell and gene and innovative therapy space," she said.