Value-based payment and financing for cell and gene therapies: challenges and potential solutions

Abstract

Plain language summary Cell and gene therapies (CGTs) treat patients in ways different from traditional medical and surgical approaches by providing “living drugs” that can heal and replace damaged tissues or diseased organs. These technological breakthroughs offer hope for curing many rare and hard-to-treat conditions, including blood disorders, cancer, eye disease, neurological disorders, and immune conditions. However, due to high cost for a single therapy, high upfront costs, uncertainty about long-term benefits, relatively small patient population size to pool insurance risk, and the fragmentation of the US insurance market, it is difficult to recoup healthcare cost savings for one insurer as patients move around various insurance plans. Even with outcome-based contracts (OBCs) with risk spreading, capping costs based on expected volume, and performance-based models, the financial risk the insurance plan takes and benefits it receives may not be in alignment, limiting the benefits of the new technology, which in turn impacts medical innovation, population health, and equitable access to care. A publicly funded special plan with OBCs for CGTs may help address the problem of the fractured insurance market. This special plan will pool funds from public sources, with a matching scheme between the federal and state governments, to support the payment for these therapies. A private insurance company that agrees to “buy in” to the treatment and pay a certain fee upfront would need to pay amortized benefits per annum (e.g. expected cost savings due to treatments) should its enrollee receive such a treatment.