What are durable gene and cell therapies?

Durable, potentially curative therapies offer hope for patients and society. They present the possibility of treating chronic conditions with one treatment. Many of the conditions addressed by gene therapy are rare and may have limited alternative treatments - a situation that has brought together communities of patients and their families for support and advocacy. The specific benefits of each therapy will vary. In some cases, these therapies can improve patient survival rates. In others they can reduce morbidity, offering individuals improved health and well-being during the course of their condition. Some gene therapies stop disease progression, preventing patients from becoming sicker. Others offer quality of life improvements, including improved functioning, less pain, and a greater sense of well-being. With improved function, patients may be able to work more or contribute more to society in other ways.

Sources providing an overview of the science and potential value of gene therapy may be found here. We thank the National Hemophilia Foundation and our other patient organization participants for their contributions to this list.

These products are different from traditional pharmaceutical products in two ways: First patients may benefit for a long period after the administration of therapy. For chronic treatments reimbursement for the treatment has traditionally happened in parallel with the delivery of benefits. Durable therapies are paid for up-front, but the benefits are delivered over time. In many ways it is a shift from a model of ‘renting’ treatments to one of ‘buying’ long-term health improvements¹ as the following graphic illustrates.

Bar chart: Durable therapies distill payments upfront

Second, along with this misalignment of payment and benefits, there is uncertainty about how long the effect of the treatment will last as this is a very new area of science. Developers hope the effect will last “forever,” but we do not yet know, and data will need to be collected on a regular basis over many years to determine that.

¹ Mullin E. An $850,000 price tag on gene therapy shouldn’t freak you out—yet. MIT Technology Review. January 4, 2018. Available at https://www.technologyreview.com/s/609878/an-850000-price-tag-on-gene-therapy-shouldnt-freak-you-out-yet/ Accessed March 19, 2018.

Expected pipeline: durable therapies

Key takeaways
  • Robust pipeline: ~1,300 active, US-registered clinical trials of durable cell/gene therapies
  • Expect 80-100 product-indication launches in US by 2031, assuming clinical trial success
  • Estimate ~500K patients treated by 2031 with $20-30B total reimbursement in 2031
    • 2018 total US Healthcare spending: $3,649B (National Health Expenditure estimates)
    • 2018 total US prescription drug spending: $335B (National Health Expenditure estimates)
  • Payer impact varies
    • Medicare: est. $12.9B for oncology medicines and $2.6B for gene therapies in 2031 (drug cost only)
    • Medicaid: est. $0.7B for oncology medicines and $2.1B for gene therapies in 2031. Peak impact in 2023: $3.3B.
  • Key uncertainty in estimates: adoption rates
  • Toolkit resources can help estimate potential patient numbers for different indications treatable by gene and cell therapies in development

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

As the picture below shows, there are currently ~1,300 active, US-registered clinical trials of durable cell and gene therapies. 6 therapies (4 individual medicines) are already approved for patient use in the US.

Figure 1: Pipeline of active, US-registered clinical trial programs for durable cell and gene therapies

Roughly 58% of treatments being developed today are for oncology (cancer) patients, 27% are for patients with rare, non-oncology conditions and 15% are to treat patients with conditions such as cardiovascular disease, which will have larger potential patient populations.

MIT NEWDIGS FoCUS has developed detailed estimates of clinical trial progression rates, disease incidence and prevalence and estimated patient uptake for each product indication.  Based on those, the current pipeline of US-trial therapies is expected to result in 80-100 product-indication launches by 2031; with 45-55 launching within the next five years (by 2025). The figures below show a range because the statistical simulation provides a range of estimates for how many medicines will be proven to be effective in the clinical trial process.

Based on the estimated number of patients with these conditions, by 2031 a treatable patient population of 50-60,000 patients per year might be helped by these therapies. This estimate takes into account both existing patients (prevalence), and new patients being diagnosed with these conditions each year (incidence).

In total we estimate 410,000-550,000 patients will be treated by 2031: 350,000-450,000 in oncology/cancer (40,000-50,000 in 2031) and 60,000-100,000 with gene therapy (6,000-11,000 in 2031).

It is important to note that these estimates are the potential treatable population based on the criteria that are being used in clinical trials. The estimated treated population will be smaller because not all the clinically-relevant population will be treated, due to lack of access, patient and physician preferences and use of alternative therapies.


Figure: Predicted product launches 2019–2031


Figure: Projected treatable patient population 2019–2031

The key uncertainty in these estimates is how many patients and physicians will use these therapies and how quickly. We have assumed that conditions with no good treatments today and with more severe/fatal consequences will see greater and faster adoption of gene and cell therapies. We will continue to analyze this as we learn more about how patients and physicians make treatment choices in the real world.

Based on the team’s estimates, the average projected total cost of these therapies on Medicare in 2031 is estimated to be $12.9B for oncology medicines and $2.6B for gene therapies. These estimates are for drug costs only at list price and not any additional medical costs associated with the treatments.  For Medicaid the cost in 2031 is estimated to be $0.7B for oncology medicines and $2.1B for gene therapies. The greatest cost to Medicaid is estimated to come in 2023 and be $3.3B.

Note: This estimate reflects the expected cost of the current pipeline in development. We expect that scientists will continue to add new treatments to the pipeline. This means that, towards the later years of this estimate, we may see additional products launch.

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

Six therapies (four individual medicines) are already approved for patient use in the US

  • 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

  • Rare Disease treatments
    • Hematological conditions
      • Hemophilia A & B
      • Sickle Cell Anemia
      • Beta-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.

If you would like to see the what conditions are included in this analysis or understand how many patients we estimate are potentially treatable for a particular indication if a product successfully completes clinical trials, you can use the Population Estimator Tool.

The Population Estimator Tool lets you select the therapeutic class (e.g., ophthalmological), the disease (e.g., Leber’s congential amaurosis), and the sub-population, which is often a genetic marker). It then gives you an estimate of the number of patients (incidence and prevalence) that may be treatable with products currently in clinical trials.

The rest of the spreadsheet is designed to allow health plans to run some simulations to estimate the potential cost of the therapies to their plans.

Coverage to date

Key takeaways
  • Explicit durable cell and gene therapy coverage, including prior authorization and associated criteria, in Medicaid programs varies across states.
  • All states have not yet issued coverage policies for Luxturna, Kymriah and Yescarta. The four largest states have coverage policies in place for all three products.
  • Prior authorization criteria associated with explicit coverage policies are typically based on the inclusion criteria of the clinical trials underlying the registration (and hence appear evidence-based). They contain step-therapy requirements, and thereby provide narrower coverage than the FDA label allows. The clinical impact of this is not considered to be significant for these three products.

Medicaid represents the most resource-constrained US payer type. While Medicaid is required by law to provide coverage to all FDA-approved products of drug manufacturers that participate in the Medicaid Drug Rebate Program (MDRP), the program is not centrally administered and coverage policies are established by each state individually.

The FoCUS team studied state Medicaid coverage policies for three durable gene and cell therapies: Luxturna (for an inherited form of blindness), Kymriah (for pediatric blood cancer acute lymphatic leukemia (ALL) and adult blood cancer diffuse large B-cell lymphoma (DLBCL)) and Yescarta (for DLBCL), which were all approved and launched in 2017. Coverage policies were determined from public state documents (typically Prior Authorization forms, Preferred Drug List, Drug Utilization Review meeting minutes), as well as from direct communication with state health services officials (typically Pharmacy Services) from January to April 2019. Not all states were able to provide information.

In states with available information, most had explicit coverage policies for all three products (range: 69–74% - please see below). In states with confirmed coverage, the majority required preauthorization. While variable, the criteria were within the FDA label and clinical trial inclusion criteria.

Summary of national Medicaid coverage for Luxturna, Kymriah and Yescarta as of April 2019

In all, based on the April 2019 research, most Medicaid patients appear have access to these recently launched durable therapies, but with some coverage restrictions. Please note that state coverage likely continued to change since this research was completed and the latest policies should be obtained before reaching any conclusions for any particular state.

US Map Illustrating State-by-State Coverage of Luxturna, Kymriah and Yescarta as of April 2019

Map graphic: US map illustrating state by state coverage Luxturna, Kymriah, and Yescarta as of April 2019

Additional information on this study may be found in FoCUS’ Research Brief: Tracking Medicaid Coverage of Durable Cell and Gene Therapies.

Patient views

Key takeaways
  • Patients and caregivers face many interconnected challenges in navigating their disease and treatment.
  • Some of these challenges are linked to costs and lost income/job insecurity.
  • Others relate to non-finance-specific issues such as provider communication, resource navigation within the healthcare system, unevenness of adequate medical care geographically, and managing mental health and stress.

FoCUS undertook a systematic literature search focusing on patient views on economic or financial burden, stress, or distress; patients, caregivers, or family. The results – as seen below -- highlighted 27 themes spanning finances, mental health, demographics and socioeconomics, and a range of challenges that relate specifically to how patients and caregivers actually navigate the healthcare system to access treatment.

Themes from systematic review of patient and caregiver perspective

Bar chart: Themes from systematic review of patient and caregiver perspective

Additional information on the research may be found here.

Payer views

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.
  • Survey results reflect that payers have a heightened concern regarding the financial risk and sustainability of high cost one-time durable treatments
  • 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

All payers face the same three issues in planning and paying for these therapies:

  • Payment risk: Total cost over a period of time and the misalignment of cost and benefits (cost will be up front, while benefits will come over time as the patient is healthier);
  • 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 importance of each challenge 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. Therapies may have different levels of performance uncertainty depending on what data is available at launch.

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, but may have greater difficulty paying for any cost they do have. Given their size large plans that can spread their risk across a larger number of patients 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. 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 are available in this toolkit here.

In late 2018, early 2019, FoCUS surveyed 77 health plan leaders, representing 153 types of plans. These included commercial payers (36%), Medicaid (27%), Medicare Advantage (30%) and self-insured employers (7%).

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

They had multiple concerns, as the chart below shows: the cost of the therapies, the total cost of many new therapies to treat different conditions, how well the products would work/product performance and their ability to accurately predict how many patients they would have (actuarial risk).

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

Payers are likely to change how they manage the financial risk of these therapies. 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 issues payers would like to address is performance risk – how well will the therapy work and for how long. Almost half of payers surveyed would find it extremely beneficial to only pay for a therapy that works.

Bar chart

Financing solutions and implications for patients

Key takeaways
  • Developers and payers are exploring and implementing a variety of innovative solutions to help address financing challenges.
  • No one size fits all – the right solution varies by product type and payer.
  • Payers are interested in implementing new financing approaches – with high priority and urgency.
  • 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 most important issue is amending how Medicaid Best Price is calculated.
  • To access therapies, patients may need to address financing and resource navigation issues.
    • They may have copayments, depending on their health plan benefit design.
    • They may need to help payers and developers track results (outcomes) over time.
    • Out-of-state access to providers and treatment centers may be needed as some therapies may be offered in limited centers of excellence.
  • Elements of solutions to patient financial burden that have already been offered by stakeholders for some therapies or considered more broadly in the FoCUS discussions include:
    • Pharmaceutical assistance programs
    • Patient access support programs (not available for patients covered by government payers)
    • Provider discounts and charitable write-offs
    • Benefit design waiving co-pays, deductibles and coinsurance for these products, provided it could be done without inducing adverse selection; and
    • Continued innovation in financial service offerings.

The NEWDIGS FoCUS consortium (payers, providers, patient advocacy organizations, pharmaceutical developers, academics and others) has been working together since 2016 to address the need for new, innovative financing and reimbursement models for durable, transformational therapies in order to ensure patient access and sustainability for all stakeholders.

FoCUS participants aligned on a set of high-potential financing tools (listed below) that can help address the challenges of upfront payment, performance risk and actuarial risk. 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.

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 focus on addressing payment timing or performance uncertainty risks, as illustrated below.

Some of these four solutions, as well as the reinsurance and risk pooling options, also help payers who may not be able to predict well the number of patients they will have on treatment (actuarial uncertainty). The orphan reinsurer benefit manager concept helps organizations that do not want to manage these risks themselves in-house and can help facilitate the implementation of certain solutions.

FoCUS’ recent payer survey suggests health plan 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 they may need to enter larger insurance pools to manage their actuarial risk better.

While some of these solutions are being tested in part today, these solutions face barriers to broad use, given how government pricing and other regulations are currently written.

The most critical issue to address is how Medicaid Best Price is calculated. As currently written, poor outcomes for one payer could lead to an artificially low Best Price that extends to all Medicaid patients. At an extreme, conceptually, if a developer offered to repay a health plan 100% for a patient for whom the medicine did not work, Medicaid would receive a price of $0 for all its beneficiaries, regardless of whether the medicine worked or them or not. Alternative calculations of the Medicaid Drug Rebate could alleviate this issue. You can read more about that in the FoCUS Research Brief: Incorporation of Value-based Payment Agreements into the Calculation of Medicaid Drug Rebates and here.

What do these therapies and new payment models mean for patients?

Payment Financing

  • Patients may have copayments for these therapies. Many patients affected by conditions targeted by durable therapies often already face high financial burdens. Patient direct healthcare out-of-pocket costs include co-pays, coinsurance payments, deductibles, and high annual cost sharing limits. Just as for payers, the concentrated upfront payments for years of benefit to follow can present barriers. Additionally, patients have non-medical out-of-pocket costs including travel and possible loss of income due to treatment.
    • Patients will want to understand what their health plan benefit requires in terms of financial contribution.
    • As patient copay costs primarily serve to encourage patients to make more appropriate healthcare choices when effective, lower cost options are available. FoCUS participants, including several payers, suggested that co-pays, deductibles and coinsurance be waived for these products provided it could be done without inducing adverse selection. That said, such a change in benefit design can require State insurance approval and may take up to 18 months. Read more here.
  • Patients will likely need to help payers and developers track results (outcomes) over time. The Food and Drug Administration requires longer-term follow-up for these novel therapies. In addition, the types of multi-year payer-developer contracts described above that link payment or refunds to whether the medicine is effective over time will also require patient data to be tracked for multiple years. This can be particularly challenging if patients switch health plans or providers. Patients may be asked to commit to follow-up physician monitoring and/or allowing their data to be shared with the organizations administering performance contracts before they start treatment. Read more here and here.

Resource Navigation

  • Out-of-state access to providers and treatment centers may be needed. Most gene and cell therapies today are administered by physicians certified to do so in certain “centers of excellence.” These centers of excellence may not exist in every state. Patients may need to travel out of state for coverage. Read more here and here.

Potential Elements to Alleviate Patient Financial Burden

Elements of solutions that have already been offered by stakeholders for some therapies or considered more broadly in the FoCUS discussions include pharmaceutical assistance programs, patient access support programs (not available for patients covered by government payers), provider discounts and charitable write-offs, benefit design waiving co-pays, deductibles and coinsurance for these products, provided it could be done without inducing adverse selection and continued innovation in financial service offerings.

  • Pharmaceutical assistance programs are a partial solution that may also apply to durable, potentially curative therapies. Manufacturers of chronic, rare disease medications (e.g., intravenous immunoglobulin (IVIG) or enzyme replacement therapies) often offer co-pay support programs for patients with commercial insurance as well as donations to 501(c)(3) organizations that offer financial support for patients with public insurance.
  • Access support programs: In the gene therapy space, for example, Spark Therapeutics has established an access support program and a fund that is available for inherited retinal disease patients to support access for public insurance patients at The Assistance Fund (TAF). These types of programs are helpful, but likely inadequate. Further limiting the patient benefit of assistance programs, some Pharmacy Benefit Managers (PBMs) have instituted Accumulator Adjustment Programs (AAPs) that can have a negative financial impact on patients by no longer allowing co-pay assistance amounts to count towards a member’s accumulator, which is the dollar amount applied to the patient’s deductible or out-of-pocket costs. If AAPs are applied to curative therapies, then any positive effects of a manufacturer’s assistance program would be negated.
  • Providers may also provide discounts and charitable write-offs, particularly non-profit providers with both mission and legal rationale to do so. Such capacity, however, is limited.
  • Financial services solutions: The financial services industry already provides patients with second mortgages, consumer loans and credit card debt, among other services to aid in financing healthcare costs. Additional financial instruments, such as personal healthcare loans, have been suggested. Continued innovation in financial services, particularly for patients with poor current credit scores but improved prospects after therapy, is needed.

The Bibliography provides a list of additional sources of information on the topics in this toolkit.