Gene and cell therapies are potentially life altering treatments for employees with diseases ranging from cancer to genetic or infectious disease. The pipeline for these therapies is projected to grow in the coming years. Currently, nearly 40 gene and cell therapies are approved by the Food and Drug Administration with over 100 in Phase III clinical trials nearing FDA approval. And those numbers are increasing daily.
While these therapies offer hope for patients with rare diseases, they come with a high price point. As more and more gene and cell therapies hit the market, employers and plan sponsors will need to be prepared for the potential high costs of these treatments hitting their plans.
While they sound similar, gene and cell therapies are slightly different in the way they treat or prevent disease. Gene therapy alters the genetic code and gene transfer therapy adds new genetic material into the cells. There are gene therapies approved to treat conditions including cystic fibrosis, hemophilia, sickle cell disease, rare eye disorders, multiple myeloma and others.
Cell therapy is the transfer of specific cell types into a person. One type of cell therapy that’s talked about often is CAR T-cell therapy, a newer form of immunotherapy for cancer patients. Six cell therapies are FDA-approved for the treatment of blood cancers, including lymphomas, some forms of leukemia, and, most recently, multiple myeloma.
The prices of gene and cell therapies can range anywhere from around $500,000 to upwards of $4 million. A gene therapy approved by the FDA in March called Lenmeldy comes with a price tag of $4.25 million for a one-time treatment, making it the world’s most expensive drug. To put the price of gene and cell therapies into perspective, consider the cost of a specialty biologics drug such as Humira, used for patients with autoimmune conditions. The typical per-patient cost for Humira is about $5,000-$10,000 per month, with extreme cases reaching $150,000-$200,000 annually.
While gene and cell therapies are some of the most expensive treatments on the market, the population of patients using them is still quite limited – for example, only about 33,000 males in the United States are living with hemophilia and an even smaller portion of that with hemophilia B. Most patients receiving gene and cell therapies do so through clinical trials. Treatment generally takes a year from start to finish and rounds of testing are required to determine if the patient will respond to the treatment. If the patient doesn’t respond to the treatment, they will not receive the high-cost therapy.
However, there are several therapies currently in late stage Phase III clinical trials to treat more common diseases including stroke, breast cancer, Crohn’s disease, multiple sclerosis, heart attack and melanoma. These conditions are prevalent in most employer populations and these therapies will have an impact on employers’ bottom lines once they hit the market.
While the impact of gene and cell therapies may not hit most employers’ bottom lines in the next year or so, there is innovation and movement in these markets that will start to move downstream sooner rather than later. By starting to prepare today, employers and plan sponsors will be better positioned as therapies for more common indications hit the market. Here are three strategies to consider:
Data warehouses can help employers identify who in their employee population on their medical benefits plan has conditions treatable with gene and cell therapies and whether they may qualify for treatment. For current disease, a present diagnosis is needed for treatment, which can narrow potential exposure. For future conditions, like stroke for example, employers would be able to use the data warehouse to look for members who meet inclusionary criteria for the treatment. Without proactively utilizing data warehouses, employers are limited in their ability to predict that risk.
As more gene and cell therapies receive FDA approval, employers will want to ensure that their programs and pharmacy benefit managers have utilization management controls in place to ensure the use of these therapies is evidence-based and medically necessary. For example, adding the step of prior authorization can help ensure that only individuals who meet all the qualifications for gene and cell therapies, and where there is no other viable treatment option, are approved to receive the therapies.
Most employers likely have stop-loss coverage in place already to shield from individual catastrophic claims and overall exposure, and they’ll want to be sure their plan is structured to support gene and cell therapies. For fully insured plans, it’s important for employers to know carriers are now starting to pass through their costs associated with coverage of these emerging therapies through premium increases.
Having sufficient stop-loss coverage in place will be more critical for employers with self-funded plans to ensure they’re protected from the impact of high-cost gene and cell therapy claims. As an alternative, these employers might consider a captive solution. Captives allow like-minded employers to form and manage their own insurance entity, retaining profits when claims are low and sharing the financial impact when claims are higher than predicted. In a group captive, stop-loss premiums are based on the claims experience of all the employers, shielding participating organizations from the drastic stop-loss premium volatility they might experience if self-insuring on their own. With a captive, employers also retain control of claims data and have better visibility into how members are utilizing the plan. This data can be used by employers to apply predictive modeling to make informed adjustments to the plan.
As the gene and cell therapy market continues to evolve with a strong pipeline of new treatments, it’s important that employers and plan sponsors are proactive in planning ahead. The population health and pharmacy specialists at Conner Strong & Buckelew can help you understand the benefits of stop-loss and captive solutions and work with you to determine what coverage solution makes sense for your employee population. Our team is also equipped with data resources to help you assess your exposure as gene and cell therapies for more common conditions continue to evolve.
For more information on how our team can help, please reach out to your Conner Strong & Buckelew representative, call us at 1-877-861-3220 or email [email protected].
Jill Ambrose, MBA, BSN, RN
Partner, Director of Population Health
Simon Leung, PharmD
Vice President, Head of Pharmacy
