How Health System and Payer Perception of Value May Determine the Promise of Gene Therapies

The launch of gene therapies is imminent. Much of the discussion has centered on the possible prices of these treatments rather than on their value and management. The value of different gene therapies is likely to vary significantly, based on both potential for clinical benefit and what they are able to demonstrate in registration trials. Setting of care is also likely to vary significantly across products. Concentrated costs, management pressures, and clinical benefit will need to be carefully evaluated in order to make appropriate coverage decisions.


For years, we have awaited the significant therapeutic advances imagined through mapping the genetic code and targeting specific defects, resulting in cures for disease. Now upon us, gene therapy aims to either deliver a healthy version of a defective gene to patients suffering from a genetic disease (such as hemophilia or genetically linked blindness) or re-engineer patients’ own immune cells to recognize and target tumor cells, such as the chimeric antigen receptor T-cell (CAR-T) therapies in a range of leukemias. The critical difference between gene therapies and biologics is that the former are designed to encourage the body to replicate the new replacement genes by itself rather than requiring chronic treatment—in essence, a possible “cure” with just a single injection. 

The European Medicines Agency (EMA) has approved two gene therapies for rare diseases: Glybera (alipogene tiparvovec) in 2012 for lipoprotein lipase deficiency, and Strimvelis (autologous CD34+ cells transduced to express adenosine deaminase) in 2016 for severe combined immunodeficiency due to adenosine deaminase deficiency. These agents were priced in Europe at ~$1 million and ~$0.66 million, respectively. Interestingly, the products have been received very differently by various European health technology assessments. Glybera is still struggling to gain reimbursement in many countries 4 years post-launch, whereas Strimvelis is making headlines for securing reimbursement with pay-for-performance deals in some markets within months of EMA approval. Although the evidence packages and unmet need for these two products were quite different, the implication is clear that Europeans see differences in gene therapy value.

With US Food and Drug Administration market authorization for the first gene therapy likely to come in 2017, it is worth considering how such therapies will be evaluated and managed in the United States. Already, anticipated perceptions of value and reimbursement challenges led, at least in part, to the developer of Glybera abandoning plans to seek US marketing approval. Next up for marketing approval are therapies for diseases with highly sensitive considerations—a “cure” for progressive retinal dystrophies that lead to blindness (from Spark Therapeutics) or CAR-Ts for childhood and adult leukemias (from several manufacturers including Kite, Juno, and Novartis). Payers and providers will need to tread carefully with coverage and treatment decisions in these emotionally charged areas of high unmet need.

What Will Be the Benefits of Gene Therapy?

The challenge facing most gene therapies is supporting the claims of a potential cure. Most companies will seek market authorization with less than 2 years of phase 2/3 data to prove “curative potential,” sometimes in diseases with progression timelines spanning decades. There is a real fear that, while the response rates for gene therapies may be high, the durability of response will not be long enough to call them cures. The problem is amplified by most studies having included small numbers of patients or designed as single-arm trials.

Access to high-cost gene therapies is likely to be easiest for therapies that offer significant improvement in mortality (eg, pediatric malignancy where patients have only a few months to live) or costly morbidity (eg, hemophilia where annual treatment costs are often >$200,000). For gene therapies that show improvement largely in terms of patient quality of life (eg, avoidance of slowly progressing blindness), access may be more difficult. Patient advocacy and the media are likely to play influential roles in coverage decisions for these therapies.

Implications of Setting of Care

More critically, the current model of gene therapy administration creates significant challenges in reimbursement. Those gene therapies provided in conjunction with stem cell transplants will require highly specialized care in centers of excellence (COE). An inpatient setting of care and patient logistics similar to (if not more complex than) those for stem cell transplants, and in particular the implications for hospital contracting and case rate renegotiation, are important considerations for these products.

Other gene therapies may be administered through outpatient services, but with highly specialized administration procedures—for example, via subretinal injections, which are currently performed in a limited number of centers around the country. COE outpatient administration leads to questions on how billing would be managed; if based on average sales price plus reimbursement, it would involve substantial markups for a therapy costing in excess of $500,000. Again, preparatory planning for gene therapy coverage at specialist COE, patient travel and treatment logistics, and billing mechanisms would likely all be required.

These challenges present themselves in the midst of broader health care system shifts toward paying for value. As such, the arbiter of determining value could reside in a number of stakeholders—from payers, providers, and governments to patients themselves. Instead of a traditional single-payer reimbursement for treatment, risk arrangements are arising between these entities. While challenging, the cooperation of sometimes misaligned stakeholders can foster advances. 

One example would be electronic prescribing of medications. While this was initially represented by a bevy of technology formats and uncoordinated transactions, the alignment of pharmacies and pharmacy benefit managers—often adversaries—eventually led to a movement that created standards and networks. Today, more than 70% of prescriptions are prescribed electronically. How risk arrangements may evolve for gene therapies will be an area worth following, as many of the suggestions to date are too complex for short- or medium-term implementation.

Implications for Management

Overall, evaluating the potential value of gene therapies by extrapolating their launch data will be a real issue for payers, particularly at the price points being discussed in the media. Payers will be challenged to decide whether to classify the products as experimental until longer-term data is available, or to cover these therapies when there is a risk they will not deliver on the promise implied by their expected high price tags. Settings of care for gene therapy, likely involving COE, introduce additional complexity, particularly if superimposed on the likely high prices with accompanying pay-for-performance contracts being discussed as part of the shift toward value-based reimbursement. Whether key stakeholders can come together on mechanisms to address these challenges will determine how much of the potential of gene therapies will be realized.