How to Manage High-Cost Gene and Cell Therapies

Gene and cell therapies are high-cost drugs that are increasingly becoming burdensome to the health care system. During a presentation at AMCP eLearning Days, Kenneth Mishler, PharmD, MBA, chief pharmacist at Blue Cross and Blue Shield (BCBS) of Kansas, and Brett Sahli, PharmD, senior director of value and health outcomes at Prime Therapeutics, discussed their real-world experiences and learnings in managing innovative and expensive gene therapies.

Gene therapies are costly, with approximate annual drug costs of more than $1 million, and the FDA predicts that by 2025, the agency could be approving 10 to 20 cell and gene therapy products per year. By 2030, the estimated total annual spend on gene and cell therapies could be close to $80 billion. The challenge remains on how to pay for these treatments.

Dr. Sahli highlighted Prime Therapeutics’ observations on a few of these therapies. For voretigene neparvovec, there has been limited variation in drug cost, near wholesale acquisition cost (WAC). The drug billing channel has been split: half through specialty pharmacy and half through buy and bill. For onasemnogene abeparvovec-xioi, there has been minimal variation in drug cost, with the vast majority being billed through specialty pharmacy. For chimeric antigen receptor (CAR) T-cell therapies, billing and coding has been inconsistent. Payment has varied based on place of service, and most have been paid near WAC.

He discussed the various approaches to managing gene therapy. One option is annuity, where payment is made over two or more years, converting a one-time high cost into multiple payments. Outcomes- or milestone-based contracting is annuity payment that is contingent upon a positive treatment outcome, with rebates based on performance failure. Risk-pooling is for constant payments at a plan or employer level using reinsurance or state-level bonding.

In the short-term, Dr. Sahli concluded, the current payment system will prevail, but there will be an increase in value-based arrangements. In the mid- to long-term, more sophisticated alternative payment options will emerge, and there will be an increased focus on value and tracking outcomes.

Next, Dr. Mishler discussed BCBS of Kansas’ journey with gene therapy. In 2017, BCBS organized a CAR T-cell/gene therapy workgroup. The first onasemnogene abeparvovec-xioi inquiry to pharmacy customer service specialists came on June 4, 2019.

To prepare for the request, they coordinated and assisted the pharmacy benefit manager with medical policy, as well as with the employer group. Early assistance from the director of Prime Specialty Pharmacy resulted in limiting distribution to only two specialty pharmacies. Provider representatives took a lead role in coordinating activities with the provider, and the provider was relieved that BCBS was going to manage the treatment payment. A few days before the planned administration, the physician decided to administer the drug at the local hospital; however, the hospital financial officer stepped in to preserve the plan.

He said this was a “perfect example of why it is sometimes better to be lucky than good.” Other lessons learned include expect that no two gene therapies will be the same, it takes a village, communicate early with administrative services, value-based contracts are critical, tracking value-based outcomes is important, and specific provider contract language is necessary for novel and expensive drugs.

Presentation: Placing Potential Cures Within Reach: Real-World Experience and Evolving Management. AMCP eLearning Days, April 20-24.