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Reconciling Price and Value: Reimbursement Strategies for Gene Therapies

If the future of medicines lies in disruptive innovation, few recent developments have been more disruptive than the market entry of cell and gene therapies. Products such as Yescarta, Kymriah, Luxturna and Zolgensma are transforming treatment paradigms for rare diseases with poor prognoses and high levels of unmet need.

Yet they also present fundamental challenges to health systems and the conventional pharmaceutical industry model. Not only do these products revolutionize the delivery of therapy, they also challenge physicians and health systems to learn and accommodate radical new ways of delivering care.

Perhaps the most daunting hurdle, though, is cost – how it will be financed, and by whom. Prices of other innovative medicines have sparked considerable debate about value and affordability, but they are products that manage disease over a course of treatment. Their cost to health systems or insurers is spread out in ways payers can accommodate within their routine budget planning.

Gene therapies charge for the promise of, nominally, a cure, and a “one-shot” cure at that. List prices ranging from $373,000 to $2.1 million are in principle payable up front, even without the guarantee that efficacy and safety are sustainable over the long term. This scenario would give any financial manager pause. The nearest equivalent may be the financial impact of direct-acting antivirals (DAAs) for hepatitis C, such as Gilead’s Sovaldi (sofosbuvir). There, the affected populations were much larger, and the challenge was more about absorbing pent-up demand for drugs positioned as something close to a cure, especially in the first year of approval.

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