For years, data from The Bruckner Group’s Annual Payer Study have indicated that private payers are planning and developing new cost-control programming to deal with the emergence of cell- and gene-based therapies (CGT) – advanced, expensive new technologies that have the realistic potential to obliterate payer budgets.  Recent market developments confirm what’s been in planning for years.

Moving beyond the certainty of the market’s prevailing outcomes-based contracting and scheduled partial-payment concepts, payers are taking visible steps towards developing  new CGT benefits (think Specialty Pharmacy as a response to protein therapies), closed networks, and mandatory patient use of designated centers of excellence.  Moreover, Bruckner’s Payer Studies have identified that payers are seeking to cut out all CGT middlemen to avoid additional mark-ups, negotiating directly with both manufacturers and with greater specificity and clarity with clinical provider sites.

CGT therapy developers must make strategic plans and take action to preserve their interests in how their therapies obtain access, are distributed, and get covered.

The “future” is here.

CGT therapy developers must make strategic plans and take action to preserve their interests in how their therapies obtain access, are distributed, and get covered.

Payers are frequently criticized for having policies and services that substantially lag behind technology development.  While that may have been truer in the past, payers have experienced enough such cycles to know that with CGTs, they need to enter the fray much sooner and more aggressively. In a major step in the direction of solidifying new paradigms for high-ticket gene therapies, Aetna has announced an innovative new program, the Gene-Based, Cellular and Other Innovative Therapies network. This benefit, which is being made available to all fully insured plans, initiates a designated provider and clinical team for Luxturna, Spinraza and Zolgensma, with more to follow.  Aetna will even provide funds for travel and lodging for patients who live over 100 miles from the nearest network site.  This detail underscores their commitment to wanting to take control of the channel.

This development is on the heels of Cigna/Express Scripts’s Embarc Benefit Protection program launched in late 2019 and now a part of Cigna’s new Evernorth division.  For a monthly fee per head, employers can hedge against the unplanned expense of gene therapy treatment should an employee or family member require it. Embarc further coordinates “health services, medical benefit management, and specialty pharmacy” across several business units: Cigna, Express Scripts, eviCore, Accredo and CuraScriptSD for patients receiving gene therapy treatment, all with no copayment. Embarc currently covers Luxturna and Zolgensma.

In another effort, UnitedHealthcare will offer Gene Therapy Risk Protection, a stop-loss program in partnership with Optum for four gene therapies, launching January 2022.

Medicare is a whole other story…

As a result of these changes, CGT companies need to immediately ensure they can make the right arguments, supported by appropriate data and evidence, and negotiate contracts vigorously that will support usage of their CGTs and safeguard their ability to thrive in this new, even more controlled system. In Bruckner’s experience, many if not most companies are tremendously unprepared for this.

Rising to the challenge requires a re-thinking of the development process to ensure strong alignment with the evolving future needs of the market, the needs of payers, and developing a credible pathway for getting there.  Many companies are not currently prepared to undertake an effort that requires long-term commitment, actions, and resources. One CEO said to us, “Developing this level of information is over and above what we have the budget to spend right now.” Yet in the absence of having that information to meet these elevated needs, payers are going to take a highly restrictive stance and companies’ revenue streams will not materialize as they’ve projected. And it’s not possible to play “catch up” and throw lots of money at the problem later, in the absence of having from the start undertaken the long-term process of defining, understanding, and quantifying the long-term therapeutic, clinical, healthcare utilization, and economic implications for CGT therapies that deliver long-term clinical and healthcare value.