CAR-T cell therapy has recently arisen as an exciting and innovative therapeutic modality. A wave of new biotechs have been established, several hundreds of clinical trials are underway, and multi-billion-dollar acquisitions have occurred. Despite rapid scientific and clinical advancements, Medicare reimbursement during these initial launch years has been underwhelming, particularly in the in-patient setting where CAR-T therapies are most frequently used.

To characterize the reimbursement challenges to CAR-T therapy today, we spoke with Payers who are covering these therapies, and Pharmacists and Finance VPs at medical institutes providing CAR-T therapies.

We found that inadequate reimbursement coverage for Medicare beneficiaries has led to hospitals with significant financial resources needing to subsidize treatments, while other institutions are not able to provide treatment. We believe that the recent CMS announcement (Feb 15th, 2019) that ties coverage to evidence development may prove to be too burdensome for some providers and could provide a legal route for providers to opt-out of providing CAR-Ts to Medicare patients.

In our white paper presentation, we explore some of the reimbursement solutions that have been proposed by the American Society of Bone Marrow & Transplantation (ASBMT) and the American Society of Hematology (ASH) and assess how these proposals meet the needs of Patients, Providers, Payers, and Manufacturers and their ease of implementation. We also outline a ‘Drop-Ship’ model that could eliminate a provider’s financial burden, and draws parallels to the Spark Therapeutics reimbursement model that has been implemented for the gene therapy Luxturna. We also propose a method to incorporate a 1-year outcomes assessment to address the needs of Payers.

We believe that these reimbursement issues are relevant to any company with a cellular or personalized therapy in development.

A short infographic summary of the paper can be found below. To download a copy of the entire presentation please click on the icon below, or email morris.paterson@groupH.com to arrange an in-person presentation with your team.

 

 

groupH’s Market Access practice, headed by Nicolas Touchot, has recently been part of a collaboration to research the feasibility and attractiveness of indication value-based pricing (IBP) in key EU countries.

Many targeted medicines are developed for different diseases and indications with common underlying biological mechanisms. The product benefit and therefore the ‘value’ is almost certain to vary by indication and by treatment.

At present there is no system in place to allow payers to fully capture this difference in value found across indications. This could lead ultimately to products never being developed in an indication for which they could represent a major therapeutic advance, simply because this would lead to a lower price than that achieved or achievable in other indications.

IBP has been proposed in the United States as a tool to address this issue, and is in the early phases of implementation there. However, in Europe, the picture is more patchy and implementation on a broader basis appears to be lagging behind the US.

Our latest research assessed how the reimbursement and pricing environment could allow for IBP in seven European countries, evaluating both incentives and hurdles.

Our findings suggest that broad implementation – including community-based practices – will be difficult in most countries covered, because of legal, data collection, and billing hurdles.

However, implementation at a smaller scale and scope e.g. for specialty products in hospitals could be feasible because of much lower hurdles.

Other mechanisms, such as use of managed entry agreements and volume-weighted average pricing defined through HTA outcome across indications, are likely to continue to be used to account for the difference in value across indications for most broadly prescribed treatments.

We believe, however, that indication based pricing is here to come because it is attractive in principle to all stakeholders. For community-prescribed pharmaceutical products it currently still encounters logistical and IT challenges, but for hospital-based specialty products there is a good chance. This will be the area where we see the first pilots.

Please click here to view the article, published this month in the Journal of Market Access & Health Policy.

For more information, please contact Nicolas Touchot.

Market Access, and with it Pricing & Reimbursement models, has become an integral part of opportunity assessments for novel drugs and therapies. Nicolas Touchot, head of groupH’s Market Access practice, has looked into the feasibility and desirability of a number of reimbursement frameworks for gene therapies and potential other novel premium priced future therapies.

Below is a summary of his article published in the September issue of Nature Biotechnology.

To obtain the full article please follow the link below;
The payers’ perspective on gene therapies: Nature Biotechnology, September 2015 (Vol 33:9, 11-13)

The Western world’s first gene therapy, Glybera launched in Germany at an initial €1.1 million price tag, a new record for a medicine to treat a rare disease. Several other gene therapies are in late stage development and both large pharmaceutical and biotech companies have been building their internal capabilities and striking multiple partnerships. The financial community has also shown great appetite driven by the promise of high drug prices and recurring payments. The current conventional wisdom for Pricing and Reimbursement of gene therapies builds upon two premises:

1. Gene therapies provide long-term or definitive benefits. Therefore pricing them as multiples of the yearly cost of expensive drugs such as protein replacement therapies is justified. This leads to prices in excess of $1million or $1.5 million per treatment
2. A new reimbursement system is required to absorb such high prices. The most likely approach is a capped annuity with risk-sharing, allowing health systems to spread the cost along several years and to limit risk if efficacy is not maintained

Unfortunately, these premises are strongly questioned by the people who ultimately carry the financial burden of gene therapies, the payers:

1. The concept of a capped annuity is theoretically attractive but impossible to implement in current health care systems
2. Pricing a gene therapy as a multiple of the yearly cost of expensive protein replacement therapies is considered highly artificial and unjustified

In this article Nicolas Touchot from groupH, and Mathias Flume a leading German payer, detail why the payers’ view differs from that of other industry stakeholders, and provide alternative approaches developed through discussions with selected senior payers in the US and large European countries.

You can click here for our White Paper.