Expected pipeline: durable therapies

Key takeaways
  • Robust pipeline: ~740 active, durable, cell and gene therapies in development for the US market
  • Expect 60+ product-indication launches in US by 2030, assuming clinical trial success
  • Key uncertainty: adoption rates

Durable therapies: Definition

The development of transformative cell- and gene-based therapies over the past decade has raised the possibility that rare diseases with severe unmet need that are currently considered chronic or fatal may be significantly slowed down or cured after a single course of treatment. These therapies represent a foreseeable reimbursement challenge to current healthcare systems: upfront cost is substantial and is incurred all-at-once, but patient benefits are accrued over a longer period of time. If these benefits minus the costs are the basis of value, then this accrual is of significant value in a single administration event. Durability could extend for years or even a lifetime.

Expected availability to 2030

MIT NEWDIGS FoCUS has conducted a unique, detailed, indication-by-indication analysis to estimate the expected volume of durable cell and gene therapies likely to be available on the US market in the coming years.

Currently there are 1,050+ active, durable, cell and gene therapies in development.  Slightly over 300 of these are product trials in China by China-based developers.  We have excluded these from the analysis to arrive at potential candidates for the US market. 6 therapies (4 individual drugs) are already approved for patient use in the US.

Figure 1: Pipeline of active programs in development for durable cell and gene therapies for the US market

Approximately 52% of product candidates in development are for oncology patients, 36% are for orphan, non-oncology indications and 12% are to treat larger therapeutic areas such as cardiovascular conditions.

MIT NEWDIGS FoCUS developed detailed estimates of clinical trial progression rates, disease incidence and prevalence and estimated patient uptake for each product indication.

The current pipeline of US-targeted therapies is expected to result in 60+ product-indication approvals (estimated range 52-74) by 2030; with 30 approved within the next five years (by 2025).

Estimates of the associated total cost of these therapies are being updated and should be available in the Fall.

While clinical trial outcomes and regulatory approvals are never guaranteed, by 2023 we expect the following types of products may be available to patients:

Currently available

  • Oncology CAR-T therapies: Kymriah®, Yescarta®
    • Currently approved for acute lymphocytic leukemia (ALL) and diffuse large B-cell lymphoma (DLBCL)
  • Ultra-rare disease treatments
    • Luxturna® for Retinitis pigmentosa & Leber’s congenital amaurosis (both RPE65)
    • Zolgensma® for Spinal muscular atrophy

Likely available by 2023, assuming clinical trial success

  • Oncology
    • Multiple Myeloma
    • Further therapies for B-cell leukemia and lymphoma
  • Rare Disease treatments
    • Hematological conditions
      • Hemophilia A & B
      • Sickle Cell anemia
      • β-thalassemia
    • Additional treatments for ophthalmological conditions
      • Retinitis pigementosa & Leber's congenital amaurosis (other genetic mutations)
      • One or more other conditions possible
    • Neurological conditions
      • One or more probable
    • Other conditions
      • One or more probable
  • Higher prevalence disease treatments
    • Macular degeneration possible

A synthesis of the approach used to develop these estimates may be found here.

Note:  Research continues to advance and findings will be updated on a periodic basis.

Payer perspectives on durable therapies

Key takeaways
  • Payers have a heightened concern regarding the financial risk and sustainability of high cost one-time durable treatments
  • Both high upfront cost of individual treatments and the total financial impact of multiple treatments are a concern
  • One of the most important elements payers would like to address in financing solutions is performance risk. Almost half would find it extremely beneficial to only pay for a therapy that works
  • Most payers plan to develop policies for these therapies over the next 2 years

In late 2018/early 2019, FoCUS conducted an on-line survey of clinical and financial health plan leaders. 77 participants, representing 153 payer segments including commercial payers (36%), Medicaid (27%), Medicare Advantage (30%) and self-insured employers (7%), responded.

80% of respondents had high to extremely high concern about managing the financial risk and impact of high cost durable therapies.

Respondents had multiple concerns, including the cost of the therapies, the total cost of multiple therapies, product performance and actuarial risk (the ability to accurately predict how many patients they would have).

Bar chart: reasons why managing the financial risk of high-cost durable therapies is a high or extremely high concern

Payers are somewhat likely to manage the financial risk of these therapies differently from how they manage that of high-cost chronic treatments.

Payers are inclined to manage financial risk associated with high-cost one-time therapies differently

Most payers surveyed expect to figure out how best to manage these therapies over the next 1-2 years.

Two bar charts: "When would you expect to implement a new management approach?" and "What is the priority for figuring out the best way to finance new high cost durable therapies?"

One of the most important elements payers would like to address in financing solutions is performance risk. Almost half would find it extremely beneficial to only pay for a therapy that works.

Bar chart

Challenges vary by payer

Key takeaways
  • Durable therapies create three types of challenges for payers: payment risk, performance uncertainty and actuarial risk
  • The challenges will vary by therapy and payer. Large plans are likely to be the best prepared to address these challenges.
  • The Toolkit Population Estimator Tool and Therapy Impact Modeling Tool can help plans and developers estimate the potential impact of a therapy on a plan based on the plan’s characteristics

In concept, all payers face the same three challenges in planning and paying for these therapies:

  • Payment risk: Total cost over a period of time and the misalignment of cost and benefits;
  • Performance uncertainty: Ability to accurately predict for whom the selected therapy will work, how well and how long; and
  • Actuarial risk: Uncertainty about how many patients the payer will have taking a certain therapy.

In practice, the challenges will vary by therapy and by payer. For example, from a therapy perspective, payer mix can vary by disease. Medicare payers will likely pay for more oncology cell therapies. Medicaid plans will see a larger share of treatments to address genetic conditions that manifest in childhood. The expected duration of effect of a particular therapy may vary and the performance data available at launch may also vary by therapy, thus creating different levels of uncertainty.

From a plan perspective, size matters. Large plans may see multiple patients with a particular condition treated by gene or cell therapy. Small plans may not see one. Given their size, large plans that can spread their risk across a larger base are expected to be able to handle the cost of durable cell and gene therapies and better predict their actuarial risk. Large payers may also see greater alignment between paying for a treatment and benefiting from reduced costs later. This is because a large payer that invests in treating a patient who then leaves their plan will likely receive other incoming patients whose treatment may have been paid for by another payer.

FoCUS has developed tools to help payers assess the potential impact of these therapies on their populations. These tools may be helpful to developers as well:

  • The Population Estimator Tool allows users to adapt FoCUS’ national incidence and prevalence estimates for a condition to a specific plan based on population size to suggest the potential number of treatment-eligible patients in that plan. Users will want to further think through the age distribution of particular therapies and unique elements of the plan to refine their assessment of plan-specific impact.
  • The Therapy Impact Modeling Tool can help users estimate a plan’s per-member-per-month (PMPM) spend associated with durable cell and gene therapy expenditure. The tool also estimates the maximum potential impact, as plans can have challenges with large, unexpected costs, Finally, the estimated cost for one patient is included. Statistically, for therapies with small target populations, a given plan may expect to see no patients on therapy in most years and a PMPM impact that reflects that. However, in the year that that patient does materialize, the plan will have the full cost of the treatment,

Financing Solutions

Key takeaways
  • Organizations are exploring and implementing a variety of innovative solutions to help address these challenges.
  • FoCUS has identified four core financing solutions…as well as actuarial and executional risk management approaches
    • Milestone-based contracts (2)
    • Performance-based annuities
    • Payment over time/installment payments
    • Risk Pooling
    • Reinsurance
    • Orphan Reinsurer Benefit Manager
  • No one-size fits all – the right solution varies by product type and payer.
  • Payers’ different challenges may lead them to prioritize different solutions, but most payers are interested in paying for what works
  • While some of these solutions are being partially tested today, regulatory changes are needed to support broad use.

The NEWDIGS FoCUS consortium (payers, providers, patient advocacy organizations, pharmaceutical developers, academics and others) has been working collaboratively since 2016 to address the need for new, innovative financing and reimbursement models for durable/potentially curative therapies in the US in order to ensure patient access and sustainability for all stakeholders. FoCUS does not address how to value these therapies or set their prices. Payers and other organizations have methodologies to do so. Rather, FoCUS seeks to create precision financing solutions for durable, potentially curative therapies with large, upfront costs whose benefits accrue over time.

FoCUS participants identified over 20 individual financing tools, no single one of which could meet all needs for every stakeholder. The participants then combined the tools in Design Labs into sets, which in combination could address significant financial challenges for the stakeholders.

The highest potential precision financing solutions identified by FoCUS participants are listed below.

By clicking on each solution, you can find a concise description of each and links to additional resources.

Milestone-based Contracts Multi-year Milestone-based ContractsPerformance-based AnnuitiesPayment Over Time/Installment FinancingReinsurance/Stop Loss Insurance Risk Pools
Orphan Reinsurer and Benefit Manager (ORBM)

Four of these solutions prioritize addressing payment timing or performance uncertainty risks, as illustrated below. Some of these models, as well as the reinsurance and risk pooling solutions, also help with actuarial uncertainty. The orphan reinsurer benefit manager concept addresses the needs of organizations that do not want to build in house capabilities to manage these risks and can help facilitate the implementation of certain solutions.

2x2 matrix: Performance contract vs spreading payment over time

A more detailed description and additional resources on each may be found by clicking on the name of the solution. A simple summary of these concepts may be found here.

The Solution Prioritization Tool can help identify the best solutions for a particular situation. Based on the experiences of FoCUS members and pilots, the Solution Prioritization Tool asks a short set of questions about the types of risks a plan needs to manage, the plan’s characteristics and the types of therapies being evaluated. The Tool then suggests high-potential precision financing solutions based on the experiences of FoCUS pilots. The Tool will also point the reader to other solution design elements to consider in building a full solution for providing patient access to these therapies. This analysis is intended to support a strategic assessment of each therapy and help users quickly benefit from FoCUS insights to date. Users are ultimately responsible for their own assumptions and analysis.

You may follow hyperlinks in the priority financing solutions to read descriptions of each solution. The descriptions explain why that solution was suggested and highlight any unique elements for different payer types or situations. The same content may be accessed here.

FoCUS’ recent payer survey (summary findings below) suggests interest in all these solutions. Health plans appear particularly interested in milestone-based contracts to manage product performance risk by paying for what works. Self-insured employers expect to evaluate their actuarial risk management strategies.

Financing solutions of interest for future management of high-cost durable therapies.

Addressing Barriers to Adoption

Key takeaways
  • Regulatory issues must be addressed at the structural systems level.
  • A variety of solutions to these issues have been proposed.
  • Amending Medicaid Best Price regulations to support the adoption of these payment models is the most urgent need.

The precision financing solutions identified as part of the FoCUS workgroup face implementation challenges given how government pricing and other regulations are currently written. Historical legislation and regulation are not always amended to permit innovative contracting approaches.

FoCUS has identified six key federal policy issue and policy recommendations, in priority order below.

The most critical issue to address is how Medicaid Best Price is calculated.

Enabling Change

Milestone-based Contract

Multi-year Milestone-based Contract

Performance-based Annuity

Payment over Time/installment Financing

Orphan reinsurer and Benefit Manager

Regulatory

Revised Medicaid Best Price Benchmarking

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Anti-Kickback Statute safe harbor inclusion

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FDA Manufacturer communication Guidelines for early discussion & using outcome metrics not in label

HIPAA revisions to ease patient outcomes and insurer status collection & sharing

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Operational

Outcomes and insurer status data collection

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Provider reimbursement mechanisms

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Risk Management

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Patient mobility mechanisms

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Reinsurance/Stop-loss evolution

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Each of the six key federal policy issue and policy recommendations is briefly described and recommendations for solutions are highlighted here. A 2-page summary of these recommendations may be found here.

Additional reading material may be found in the Toolkit Bibliography.

Building a total solution for patient access

Key takeaways
  • A holistic look at how to ensure patient access to these durable treatments is critical.
  • Beyond financing solutions, elements such as out-of-state networks and patient financial implications should be considered.

FoCUS discussions have highlighted that a holistic look at stakeholder needs and challenges is needed to ensure the elements and infrastructure are in place to support patient access to medicines.

Durable, potentially curative therapies may create changes in how care is delivered and where care is delivered, in addition to reimbursement and payment changes for providers, patients and their caregivers.

A brief summary of key stakeholder issues identified in the Design Labs that need to be resolved to ensure appropriate access to these therapies may be found here.

A brief overview of some of the key issues, as listed below, may be found here. You may also click on each of the individual topics below to be directed to it.

Outcomes tracking over time Patient mobility Provider accreditation / Centers of Excellence Provider financial considerations Out-of-state networks Buy and bill State plan amendments Patient financial implications