A payer’s perspective: Is the contracting landscape for Cell and Gene Therapies unsustainable?
In recent years, the cell and gene therapy market has been touted as a promising frontier in the pharmaceutical industry with numerous clinical trials and regulatory approvals driving investment and innovation. Some analyst commentary is questioning whether the market's early momentum has begun to wane. Despite a pipeline of nearly 400 ongoing clinical trials in Europe¹ alone, doubts remain about whether these products will make it to market and if the recent flurry of activity is sustainable.
Zynteglo Rejection Halts Gene Therapy Symphony
Hailed as a revolutionary gene therapy treatment for beta-thalassemia, Bluebird Bio's Zynteglo faced significant obstacles in Europe. Priced at a staggering $1.8 million², the company was seeking a value-based pricing agreement that spread the cost of the treatment over five yearly payments, dependent on transfusion independence³. Communication issues between Bluebird Bio and regulators in each country led to a series of rejections, leaving the company struggling to secure reimbursement. In a press release⁴ on August 9th, 2021, Bluebird Bio announced that it would be winding down its operations in Europe, citing "challenges of achieving appropriate value recognition and market access in Europe."
"European payers have not yet evolved their approach to gene therapy in a way that can recognize the innovation and the expected life-long benefit of these products."
Bluebird Bio Press Release⁴, August 9th 2021
What did Zynteglo look like through the payer's eyes:
The situation was discussed with an ex-NHS payer, part of Verpora’s network of global payers, who highlighted key issues.
Durability: BlueBird's model showed a lifespan of 20-40 years, which payers did not believe was supported by sufficient evidence.
Premature death rates: The manufacturer claimed that patients with beta-thalassemia were dying younger than payers were seeing, likely due to the updated standard of care not represented in the manufacturer's thinking.
Health-Related Quality of Life (HRQoL) data collected during clinical trials was not shared. This lack of transparency led to questions about the therapy's efficacy. The incremental gain was lower than anticipated and did not justify the high price.
The importance of payer endpoints and HrQOL
Regarding cell and gene therapies, payers are looking beyond just clinical endpoints and efficacy data. Health-related quality of life (HRQoL) has become an increasingly important factor in the decision-making process for these innovative treatments. For payers, HRQoL is measured by gold-standard metrics such as EQ5d and F36. These standardized measures, however, are often too generic to fully capture all HRQoL factors in rare diseases. This is driving manufacturers to explore construction of disease-specific clinically validated QoL tools to demonstrate differential results for innovative treatment vs. existing management to support reimbursement of these therapies. Because of the complexities around achieving this, many cell and gene therapy manufacturers may only conduct a QoL survey, which falls short of these standards. This discrepancy can cause a significant disconnect between the manufacturer's perceived value and the payers' actual valuation of the therapy. Manufacturers must consider HRQoL when marketing their products to payers, as it can significantly impact the chances of gaining reimbursement and widespread adoption.
The case of Zynteglo highlights the importance of considering this payer mindset when marketing cell and gene therapies. The outcomes-based pay-over-time model has become the go-to for cell and gene manufacturers seeking access at ultra-high prices. But despite these attempts, the company was still unable to square the circle in Europe due to evidence gaps. Without a holistic, team-based approach to market access, many could go the same way in the future.
A payer's top three tips for getting your market access strategy right the first time
Ensure a collaborative approach
with Key Medical Experts (KME), payers and patients throughout the development process; listen to their perspective to identify and understand the access barriers a product will face
Establish accurate
treatment pathways
for the condition and the level of unmet need; sometimes treatment may not change, but technological and diagnostic advancements improve the care e.g. genetic testing/screening driving earlier diagnosis and management, reducing complication risks later in life
Early consideration of innovative contracting solutions
that will address the access barriers; many markets are increasingly looking to these agreements to ensure patients can be treated with innovative therapies sustainably.
Conclusions
As the field of cell and gene therapies continues to grow, payers are playing an increasingly critical role in determining the success of these innovative treatments. In Europe, the framework used to assess these therapies is becoming more rigorous, with payers using checklists of data and cost-effectiveness to identify treatments that do not meet their standards.
There is also a call to prioritize diseases, particularly those that impact children, as these treatments have the potential to be life-changing.
Payers are looking for innovative ways to make these therapies more affordable, including using budget impact thresholds, fixed fees, price reductions, and payer-driven slow adoption.
Despite these challenges, cell and gene therapies have a bright future in high-GDP countries such as the EU5, USA, Canada, Nordics, Australia, and the Middle East, where there is significant demand for innovative treatments that can improve patient outcomes. As we move forward, it will be critical for manufacturers to continue to work closely with payers to ensure that these therapies are accessible and affordable for all who need them. Innovative Contracting needs to play a pivotal role in these solutions.
Contributors
Adam Buckler
MPharm, PGDip GPP, Senior Business Consultant Verpora
& Former Oncology Pharmacist, Royal Marsden Hospital, London
LinkedIn
Adam is an experienced pharmacist having worked in the UK NHS for over ten years in acute Trusts and an internationally renowned oncology/ haematology centre. Acting as the lead pharmacist for Electronic Prescribing & Medicines Administration (EPMA) and being responsible for the Education and Training of pharmacists, Adam developed a breadth of experience. With an expertise in healthcare data systems and capabilities, Adam is an expert in the field of electronic prescribing. At Verpora Adam leads Innovative Contracting consultancy projects and client contracting capability program builds. Adam is a certified member of the BHBIA & registered with the GPhC.
Sources
Insight: What happens when a $2 million gene therapy is not enough https://www.reuters.com/business/healthcare-pharmaceuticals/what-happens-when-2-million-gene-therapy-is-not-enough-2023-08-12/ - accessed 06/09/2023
https://www.cellandgene.com/doc/bluebird-bio-s-million-zynteglo-0001#:~:text=The%20Price%20Tag,commercial%20payers%20come%20on%20board%3F - accessed 06/09/2023
Verpora Innovative Contracting Tracker of 800 published innovative and value-based contracts - https://www.verpora.com/research-and-intelligence
Press release on August 9th, 2021, Bluebird Bio https://investor.bluebirdbio.com/news-releases/news-release-details/bluebird-bio-reports-second-quarter-financial-results-and
Disclaimer
Content in this article is based on secondary market research using externally sourced data available in the public domain. Opinions and commentary are those of the authors and do not reflect views of any commercial organisation or government body mentioned in the article. For any questions relating to the article please contact adam.meads@verpora.com.
