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Remuneration for Gene Therapy Treatments: ICER Provides Early Recommendations


How will drug developers price gene therapy treatments to recover their investment and ensure that society can bear the impending cost?

In its latest white paper, the Institute for Clinical and Economic Review (ICER) provides a summary of a 2016 policy summit on gene therapy, discussions with health policy experts, and published evidence, to identify ways to strike a balance between monetizing the benefits of these treatments and absorbing their impact on the US healthcare system.

Gene therapies typically use a viral vector, which is infused and integrates with the patient’s DNA to replace or change a faulty disease-causing gene. Cancer tops the charts with 693 gene therapies currently under development, followed by rare diseases at 501. Between 12 and 14 gene therapies are currently in phase 3 and may be submitted for regulatory approval in the next 2 to 3 years. Many of these treatments will treat orphan or ultra-orphan conditions. The question is, how will drug developers price these treatments to recover their investment but ensure that society can bear the impending cost?

At ICER’s policy summit, representatives from the payer and life sciences industry convened to discuss just that. Several opportunities and challenges were identified with the field of gene therapy.

1. Potential to address unmet clinical need

The risks associated with developing these treatments are high, because of unforeseen side effects, which in itself can be a challenge for a smaller biotech company. However, a successful treatment has a huge potential to save lives. Balancing the risks with benefits would require an assurance of financial returns.

2. Evidence generation

Evaluating these treatments is challenging because of:

  • Small number of the patient population
  • Ethical and practical barriers of conducting a randomized controlled trial
  • Lack of standardized patient-centered outcome measures for some conditions
  • Lack of standardized supportive care
  • Absence of long-term safety data, especially in the context of using viral vectors

3. Evaluating the value of potential “cures”

With limited data on long-term safety, durability of clinical benefit, and the limited data at launch, evaluating these treatments as a “cure” for a condition is difficult at best. Pricing such uncertainty, therefore, presents its own set of challenges. Bringing forward cost-per-quality adjusted life year (QALY) calculations may be tricky, because while QALY may justify a high upfront cost, and manufacturers may want to recover their investment, can society bear these prices?

4. Pricing and affordability concerns

With payer budgets already stretched, and reigning in costs high on the agenda, both public and private payers will likely balk at the cost of some of these gene-based treatments. Europe has the lead in approved gene therapies, and the first such drug to be approved had a launch price of $1.4 million. Can the US healthcare system absorb the cumulative impact of such prices, considering that 10% of the population has a rare condition linked to a genetic defect?

Following an evaluation of the literature, the discussions at its summit, and discussions with health policy experts, ICER has developed the following recommendations for both payers and developers of these treatments:


1. Early conversations with payers, in line with the recent FDA guidance that facilitates a dialogue between drug sponsors and payers on investigational product information. The conversation should revolve around validated surrogate outcomes, developing robust data, size of the patient population, patient eligibility for participation, partnership on post-approval studies, and value assessment.

2. Ways to perform at least 1 randomized controlled trial for comparison with an existing treatment.

3. Creating patient registries for real-world data collection.

4. Evidence on the relation between price and value of the treatment.

5. Creating a value-assessment report in collaboration with payers and a health technology assessment organization.

6. Provide payers with a manufacturer-financed mechanism for instalment payment options combined with an outcomes-based agreement.


1. Improve internal knowledge-base on gene therapies.

2. Early dialogue with manufacturers on promising new gene therapies, with conversation as listed for manufacturers above.

3. Creating robust patient registries. For real-world data collection.

4. Create coverage policies tailored for gene therapies based on their method of delivery, mechanism of action, etc.

5. Work to familiarize manufacturers on expected challenges, while simultaneously creating mechanisms to ensure patient access to promising treatments.

6. Develop outcomes-based agreements.

Emphasizing the need for ongoing collaboration among stakeholders, the whitepaper states, “Only with collaborative efforts can the opportunities presented by gene therapies be realized while addressing the significant challenges related to evidence generation, value assessment, and payment.”

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