Preparing for an influx of cell and gene therapy approvals
Cell and gene therapies offer some of the most groundbreaking advancements in patient care the pharma industry has ever seen. However, to fully realise the potential of these innovative therapies, integration across the supply chain is critical – particularly with reimbursement and logistics.
As of the end of 2019, there were 17 cell and gene therapy products approved by the FDA. Now, there is more momentum than ever to bring these innovative medicines to market, and the FDA anticipates that it will approve 10 to 20 cell and gene therapy products a year within the next five years.
These therapies can offer new opportunities to patients with conditions where there are few treatment options and no cures. But the potential these products offer could remain largely unrealised if manufacturers and their partners are not prepared. Cell and gene therapy innovators and other stakeholders across the supply chain need to set themselves up for the greatest chance of success by addressing three key challenges: access barriers; logistics; and the need for stakeholder education.
Addressing access barriers through innovative payment models
While cell and gene therapies offer novel treatment to patients who have limited options, the cost associated with each product – anywhere between $375,000 and $2 million – can create significant access barriers. This challenge is compounded compared to traditional treatments that typically require multiple doses, as many cell and gene therapies are one-time treatments.
This situation increases the risk for payers covering the cell and gene therapy, given that the long-term magnitude and durability of the product is not known at the time of first regulatory approval and patients switch insurance carriers throughout their lifetimes.
Stakeholders across the industry, such as manufacturers and payers, have recognised the increasing need to consider alternatives to the standard payment system if cell and gene therapies are to become widely available. As a result, a variety of payment models have been discussed:
- Value-based model: The payer pays only a portion of the full price upfront. If the therapy achieves prespecified outcomes, the payer remits the remainder in full. This model spreads the financial risk, therefore, between the payer and manufacturer, and has been the most commonly employed method to date.
- Pay-over-time model: The payer agrees to a fixed price for the therapy but pays in regular installments, like with an annuity, spreading the cost over time.
- Subscription-based model: This model offers the payer a flat rate for coverage of various cell and gene therapy products, which provides predictability and helps them offset the potentially high upfront costs of these therapies and realise longer-term cost-savings.
We have already begun to see payers and manufacturers of cell and gene therapies attempt to adopt alternative payment models for their products, and more should continue to do so as additional therapies come through the approval pipeline. With a range of interdependencies that affect the success of cell and gene therapies, manufacturers need to develop their reimbursement strategy early in the commercialisation process. It’s critical for manufacturers to consider various payment models for cell and gene therapies ahead of approvals so that they can maximise patient access for their products.
Ensuring therapies reach their patients
Manufacturers have noted that the delivery of critical shipments is one of the biggest challenges facing the advanced therapy industry, as if you cannot connect cell and gene therapies with patients their efficacy is irrelevant. The inclusion of patients into the cell and gene therapy supply chain, the potentially life-altering impact of the therapies and their high cost leaves no room for failure.
These therapies require timely delivery and maintaining precise temperature control is integral for the patient and the product. It calls for near-perfect execution ranging from mapping the best transportation route and planning for multiple contingencies (such as closed international borders), to how the packaging itself is evaluated, validated and used to maintain product integrity in all conditions.
Successful execution of these processes requires both manufacturers and other supply chain partners to maintain a robust logistics platform. Currently, many manufacturers are developing different logistics plans for each of the stages of a clinical trial, only to find out these processes don’t scale when it is time to commercialise. Developing a plan early that can scale will position a product for success as more therapies are reviewed and approved. Manufacturers need to work with their 3PL and distribution partners to ensure control and oversight throughout the product journey to the patient – failure to do so will put patient outcomes and commercial success at risk.
Promoting stakeholder education
Many stakeholders – spanning payers, providers and patients – do not understand the full clinical, logistical, operational, financial or reimbursement components associated with cell and gene therapies. Manufacturers can leverage the preliminary data they’ve gathered throughout their initial commercialisation journey to support education and awareness efforts with these key stakeholders.
As payers conduct product reviews earlier and earlier in the development lifecycle, their demand for pre-approval information continues to grow. However, recent research shows that a gap still exists between the evidence sought by healthcare decision makers and what is being shared by manufacturers. COVID-19 has also caused delays in providing information in a timely and relevant manner, causing even more challenges for stakeholders.
The use of Pre-approval Information Exchange (PIE) is one way to combat these challenges. PIE allows manufacturers to communicate ahead of approval to partners with accurate, and unbiased information on products or indications, and share information early that may result in a “place saved at the table” for their product. This information equips stakeholders with the education needed to understand a product’s value story and positioning. Partners embedded in the industry – particularly those with a patient-centric focus – can also offer manufacturers the information they need to showcase the value of these products to patients.
The cell and gene therapy space is continuing to evolve. Through analysing payment models, working with partners to navigate logistical challenges and leveraging data, patients will have more opportunities than ever to access the next generation of medicines. Overall, the collaboration between stakeholders across the supply chain will facilitate a world in which we see 10 to 20 cell and gene therapies not only approved each year but out in the market directly impacting patients.
About the authors
Alex Guite is vice president services and alliances at World Courier. As strategy and services lead, Alex is responsible for developing and executing key strategic initiatives.Before joining World Courier in 2013 as head of pricing, Alex spent nearly 3 years with Oliver Wyman as a consultant in the Health and Life Sciences practice.
Ana Stojanovska is vice president, reimbursement & policy insights at Xcenda. She has extensive practical knowledge in working with key stakeholders to motivate local coverage of new products by both public and private payers and providing strategic compendia analyses and ongoing coding support. Prior to Xcenda, Ana worked for a bipartisan, non-profit health policy organization in Washington DC, where she helped lead research, health policy analysis, media outreach, and fundraising.