As gene therapies continue to revolutionize healthcare, the uncertainty surrounding marketing issues remains significant.
Gene therapies will revolutionize healthcare by offering potential curative treatments to patients with genetic diseases. Newly approved gene therapies hold great promise in saving or improving the lives of patients. Today, the development pipeline includes hundreds of gene therapies that work by “replacing a pathogenic gene or inserting a new or corrected gene or directly modifying the genome (in vitro) in patients”. Despite the enormous market opportunity presented by this new sector, many challenges remain for gene therapy: the science is complex, the treatments are expensive, the supply chain is thin and the regulatory path is not so simple than conventional therapies.
The approach to market access requires a radical overhaul to ensure that patients who could benefit from these gene therapies have timely access. It is legitimate to fear that the important a one-time upfront payment for these expensive therapies could place an undue burden on the health care system. However, since the lifetime cost of treating many genetic diseases is significantly higher than the one-time cost of these gene therapies, it is essential to assess the clinical and long-term cost-effectiveness trade-offs associated with these therapies. As the industry grows, manufacturers must explore new marketing models to work with suppliers, payers and policy makers to optimize market access for these therapies. This article will examine the main marketing uncertainties that could hamper the successful adoption of exciting new gene therapies.
The gene therapy sector is slowly taking off
WADA has identified approximately 4,000 diseases linked to genetic disorders, including cancer, cystic fibrosis, hemophilia, Parkinson’s disease, Alzheimer’s disease and ALS. About 10% of the US population (30+ million people) suffer from diseases related to genetic disorders. Two recently launched gene therapies (LuxturnaÂ® and ZolgensmaÂ®) are experiencing early commercial success. Luxturna (voretigene neparvovec-rzyl), approved in December 2017, is a gene therapy based on adeno-associated virus vectors indicated to treat patients with confirmed retinal dystrophy associated with the RPE65 biallelic mutation. Zolgensma (onasemnogene abeparvovec-xioi) approved in May 2019, is a gene therapy based on adeno-associated virus vectors indicated for the treatment of pediatric patients under two years of age with spinal muscular atrophy (SMA) with bi- mutations. allelics in the survival motor neuron 1 (SMN1) gene.
Several new companies with exciting technologies have recently attracted significant growth capital, while established biopharmaceutical companies are actively engaged in transactions aimed at expanding their capabilities. Currently, more than a hundred gene therapies are in clinical development. Some leading gene therapies are expected to enter the market soon, notably Biomarin’s Valoctocogene roxaparvovec (BMN270) for hemophilia A and Bluebird Bio’s Lentiglobin for thalassemia and sickle cell anemia.
Market access challenges and economic burden on health
Once a new gene therapy gets regulatory approval, the main barriers are market access for payers and ensuring patient access / affordability. The ability of physicians and patients to participate in gene therapy becomes difficult, especially in situations where conditions are not life threatening. There is no fair way to directly compare the costs of gene therapy with other drugs currently available. While the direct and indirect costs associated with administering gene therapy tend to be high, they also offer potential curative options in most cases. Payers need to incorporate them into their forms while ensuring patient affordability. These market access challenges will worsen as more gene therapies become available and the cost burden increases.
a) Long-term efficacy must be established.
Although gene therapies hold the promise of a potential cure for patients, the likely effectiveness and durability of these gene therapies tend to vary, and their long-term effectiveness needs to be monitored. Some of the more recent evidence raises questions about long-term sustainability. If this is indeed the case, patient selection becomes even more critical if performance tends to vary based on patient characteristics. Real-world studies could solve these puzzling issues and empower stakeholders to make optimal medical and access decisions.
b) Covering all patients is prohibitive in the short term
The main challenge is how individual patients can benefit from gene therapies given their high cost – should they be available only to high risk patients? What criteria are used to assess these short-term and long-term clinical / cost-effectiveness compromises for each patient? We show potential scenarios that could come into play when identifying the right patients for these genes therapies (see figure below). This dynamic is perhaps one of the most difficult areas for public and private payers in every disease to resolve, and stakeholder alignment is essential to ensure long-term success. The current system may struggle to absorb large one-off payments, but may be able to sequence patients in the short term until these therapies become cheaper and more widely available to patients in the future.
c) Gene therapies must compete and coexist with other treatment modalities
Gene therapies may be the only treatment option for patients with certain genetic diseases with significant unmet medical needs. However, if other treatment options (surgery or drugs) exist, gene therapies must compete with them or coexist. For example, in sickle cell disease, gene therapies are at an advanced stage of development. When approved, they must compete with an existing curative treatment (allogeneic HSCT) and the most recently approved drugs (Oxbryta and Adakveo) intended to prevent vaso-occlusive crises. In these situations, physicians / payers must customize treatment algorithms and ensure access by balancing clinical / cost dynamics.
d) Rationalize the value of potential curative treatments
The value of gene therapies is misinterpreted, and often political experts point to their high prices without understanding the economics of long-term health. For example, there are currently approximately 20,000 patients with hemophilia in the United States, 80% of whom have hemophilia A. While gene therapy treatment for hemophilia costs $ 1 million to $ 3 million per patient, the treatment of the entire US patient population could cost anywhere from $ 20 billion to $ 60 billion. However, assuming that these treatments are lasting one-time curative treatments, these costs should be weighed against the lifetime costs for these patients. Currently, hemophilia treatments alone (without taking into account the indirect costs of managing the disease) are estimated at more than $ 4.6 billion per year (by AllianceBernstein) or $ 115 billion over 25 years. Ultimately, the macroeconomics of gene therapies could prove to be attractive with a net positive impact on the health system.
e) Payers take a phased approach to the coverage decision
Although our healthcare system currently covers specific expensive one-off procedures (for example, most transplant surgeries cost over half a million), the financial burden stemming from gene therapies could place an additional burden on the system. Payers are trying to assess the trade-offs between the profitability of these new treatments and the associated innovation premium. In recent times, payers have covered relatively expensive rare disease products, costing hundreds of thousands of dollars per patient each year. However, they are slowly realizing how the cost accumulation could pose an even greater burden in the future. CMS’s position on gene therapies continues to evolve towards value-based pricing and reimbursement approaches. For example, Massachusetts was one of the first states to change its policies to adopt gene therapy. The ability to track the effectiveness of long-term performance of gene therapies paves the way for results-based contracts.
New payment models can reduce the short-term cost burden
For ZolgensmaÂ®, Novartis negotiated a five-year payment option over time with Accredo Health Group and performance-based contracts with both commercial and Medicaid. Other new payment models will have to be developed to meet the challenges of current systems. Models such as outcome-based pricing, extended payments, reinsurance, consumer loans, third-party funding, therapy securitization, manufacturer-managed funding, and government funding are under consideration. . Amortization is a common theme, although it can be difficult to avoid default situations without significant recourse if patients decide to forgo payments in the future, and adequate penalties cannot be imposed to prevent such behavior. These models need to be further evaluated to understand their utility and sustainability in healthcare budgets.
The early commercial success of gene therapies enabled the sector to overcome market access challenges. Commercialized gene therapies have provided signals to investors about the potential risk / return associated with these investments. While the ultimate goal is to help patients access these exciting therapies, manufacturers and payers face difficult choices to balance scientific innovation, social responsibility and shareholder expectations. In the long run, it is very likely that advancements in science and technology could increase efficiency and significantly reduce development and manufacturing costs, making these therapies cost effective and facilitating wider access to patients. Now the crucial question is, “How do we align stakeholders on the value of these therapies and ensure that the patients who benefit the most from them can access them in a timely manner?” “
Subbarao Jayanthi, Management partner, RxC International