The ascent of cell and gene therapies (CGT) is commonly regarded as one of the momentous turning points in the history of the pharmaceuticals industry. Not only do innovative therapies such as CAR-T herald a shift towards genuinely individualized medicine and an exciting new front in the war against cancer, but the pace of technological advancement in such a complex domain has also been deeply impressive. By 2025, the FDA expects to be reviewing around 10 to 20 of these transformative drugs per year, while Ana Hidalgo-Simon, Head of Advanced Therapies at the European Medicines Agency, has estimated that her agency will soon be approving as many as 12 such therapies per annum.
The ascent of cell and gene therapies (CGT) is commonly regarded as one of the momentous turning points in the history of the pharmaceuticals industry. Not only do innovative therapies such as CAR-T herald a shift towards genuinely individualized medicine and an exciting new front in the war against cancer, but the pace of technological advancement in such a complex domain has also been deeply impressive. By 2025, the FDA expects to be reviewing around 10 to 20 of these transformative drugs per year, while Ana Hidalgo-Simon, Head of Advanced Therapies at the European Medicines Agency, has estimated that her agency will soon be approving as many as 12 such therapies per annum.
Yet for all the fanfare associated with this breakthrough category of medicines, a sustainable pricing model has yet to be identified in many countries, which poses some difficult questions for their eventual extended-market viability.“While much has changed in the evolution of the science, surprisingly little has changed in the evolution of thinking about how to finance this boom in future cures,” observes Ulrich Neumann, Founder of Pharmvivo Ventures and Senior Director of Certara, the global leader for model-informed decision-making from bench to market.
“As is the case for most curative therapies, the lifetime savings potential for most CGTs tends to be exceptional in terms of reducing the burden of mortality, disability and overall treatment costs, but collapsing decades worth of potential cost-offsets into the single, one-time administration of a drug produces extra-ordinary up-front budget pressure on payers that health systems often struggle to cope with,” he reasons.
End of the Line for Pay-Per-Performance?
Initially outcome-based managed entry agreements were touted as a fair way of ensuring value for money, meaning that the drug maker would only be reimbursed when the patient actually responds to the treatment. In the words of Dr Susanne Schaffert, president of Novartis Oncology such arrangements constitute “a very fair assessment of the value of a drug because it will drive industry to come up with really differentiated therapies, while simultaneously acting as an effective mechanism to ensure that the payer only ever pays for treatments that work.”
In practice, however, the roll-out of such risk sharing schemes has proved rather difficult. While certain European economies – notably Germany, Italy and Spain – have indeed penned such agreements, uptake elsewhere has tended to be sluggish and there has been a palpable waning of enthusiasm for the model.
There was a time when outcome-based arrangements … were very much considered to be the future of innovative drug financing, but the mood seems to have switched in recent years
Niklas Hedberg, EUnetHTA
“There was a time when outcome-based arrangements of that ilk were very much considered to be the future of innovative drug financing, but the mood seems to have switched in recent years,” confirms Niklas Hedberg, Chair of the Executive Board, EUnetHTA. “Ultimately these agreements are tremendously resource-intensive and there is often not enough agreement, nor sufficient infrastructure, to make sure that payers and Health Technology Assessment (HTA) bodies can always obtain the data sets that they want. The fear is that if the data is incomplete or considered faulty, then it will always be the payer that will be left carrying the can!”
Nor do pay-per-performance mechanisms necessarily translate well to decentralised healthcare systems with complex structures and many component parts such as that of the US market. “America fundamentally lacks an effective system through which to enable innovative reimbursement models for such novel products,” claims Neumann. He points out that payers over there tend to express anxiety not only about how to assess long-term real-world effectiveness of cell and gene treatments, but also about issues such as actuarial management, which refers to how many eligible patients will be in the insurance pool and about how to administer payment in instances of beneficiary migration.
Then there is also the impediment of misaligned incentive structures where payers around the world are prioritising short-term investments even when that comes at the expense of long-term savings. “Often we encounter instances where the entire system for financing healthcare in a particular market seems to be baked into a concept of chronic medicines. It’s all about managing budgets within a 12-month horizon,” laments Nick Leschly of Bluebird Biopharma. “Unfortunately, it’s a myopic mentality that pervades the industry and it will require a coalition of policy makers, the media, industry and payers to correct,” he says.Even in cases when payers are willing to experiment with outcome-based contracts, the enabling structures are all too often missing. “Essentially, not all healthcare systems currently possess the requisite technology, infrastructure and capacity to track the key metrics on which to base the decision making, so they would frankly find it difficult,’ warns Schaffert.
Finding a Path to Market
What, then, represents the best route out of such an impasse? In certain small-scale markets like Switzerland, CAR-T therapies are currently being reimbursed based on a contractual approach directly with the manufacturers. “Here in Switzerland, we’ve been managing to secure a relatively high level of access to these sorts of ground-breaking treatments. It’s not quite as straightforward as simply having the CAR-T therapies placed on the reimbursement list and the reimbursement being automatic. The process is actually strictly regulated and constitutes an individual contractual agreement between the payer and the manufacturer, where the price is agreed upon,” explains Thomas Szucs, Chairman of the insurer, Helsana and director of the European Center of Pharmaceutical Medicine at the University of Basel. He does wonder, however, whether such a provision model would still prove sustainable at larger volumes.
Meanwhile, companies like Novartis have been managing to chart a route to market by eschewing one-size-fits-all approaches in favour of tailored solutions that align very closely with the individual characteristics of each specific country. Its flagship CAR-T product is after all now reimbursed in no less than 27 markets globally.
“Being the first mover in these markets, our teams had to partner closely with the local healthcare systems and payers, first explaining the value of CAR-T and then identifying practical ways to create access for patients. None of these healthcare systems were built for one-time, potentially curative, treatments so there needed to be a period of acclimatization in most cases and patience was required,” recalls Stefan Hendriks, Global Head for Cell and Gene at Novartis Oncology.
The secret sauce, however, was to understand that value is defined differently in each and every market. “It was essential to listen and understand our partners in each market in order to create a common understanding of the value that CAR-T therapies can bring, and then to offer innovative, but pragmatic models that directly addressed those issues,” he confides.
Ultimately, everything rests upon collaboration and all stakeholders across the length of the value chain – industry, regulators, payers and clinicians – pulling together to get these unconventional technologies into the hands of those that need them. “Everyone has their part to play in this process,” insists EUnetHTA’s Hedberg. “My message to the hospitals and clinics is that it is of utmost importance to follow-up and generate further data. Clinicians should know that they have a responsibility and duty on this matter too. If they want to use an exciting, but expensive new therapy like CAR-T, then it is imperative that they take the right steps to ensure that we, the HTA bodies, can follow up the results so as to be able to demonstrate their comparative value,” he asserts.
