Paying for Cures: Ensuring Patient Access and System Sustainability

Paying for Cures

One of the most vexing challenges facing the U.S. health care system is how payers and biopharmaceutical innovators can work together to ensure that curative treatments are more broadly accessible to patients. During a daylong conference, “Paying for Cures,” held in Washington, D.C., on Feb. 12, more than 250 participants gathered to discuss this topic.

Led by MIT’s NEWDIGS FoCUS (Financing and Reimbursement of Cures in the US) and supported by the National Pharmaceutical Council (NPC), FasterCures, the Alliance for Regenerative Medicine, MedImpact, Pfizer, Inc and Anthem, the conference considered the current health care environment, barriers to care and potential solutions to ensuring patient access to transformative therapies that are often challenging to develop and higher in cost.

By 2030, an estimated 45-60 curative or durable therapies — those with short treatment regimens and lasting benefits — are expected to reach the market. Most of these treatments are gene therapies and immunotherapies targeted to rare, or ultra-rare, diseases for which there are no existing or very limited treatment options. For patients, these new types of treatments could represent a positive, dramatic shift in their daily lives. Anish Goel, PhD, a beta-thalassemia patient, noted that survival, how you feel and function — “things that define our lives” — are of utmost importance to patients when it comes to treatment needs. 

Colin M. Young, PhD, director, drug development pipeline research, MIT FoCUS project, acknowledged that the therapies expected to be approved in the next decade will bring great benefits to patients, along with costs to the system, including hospitalizations, physician visits and related costs of care. He estimated that within the next 10-12 years, up to 55,000 patients will be treated with durable therapies, at implied total treatment costs of $20 billion-$25 billion.

Given the many touchpoints in the health care system, from patients and physicians to innovators and payers, multistakeholder collaboration is important, noted Ed Pezalla, MD, MPH, CEO, Enlightenment Bio-consulting. Through the MIT FoCUS program, Pezalla said more than 150 organizations, including NPC, are involved in efforts to test financing concepts in design labs, particularly for treatments that are currently in the development and approval pipelines. Recent case studies led through MIT tested performance-based annuities for treatments of blood disorders, milestone-based rebates for chimeric antigen receptor T-cell (CAR-T) therapies, and the creation of an orphan reinsurer benefit manager for orphan/ultra-orphan diseases.

There are five to six treatments for blood disorders, such as sickle cell anemia and hemophilia, that are expected to reach the market in the near term, said Chuck Bucklar, group vice president, commercial operations, North America, BioMarin Pharmaceuticals, Inc. These are therapies that are considered “one and home” — administered one time with a potentially durable treatment effect.

With blood disorders, having an upfront payment tied to the initial treatment, followed by a series of payments over time, reduces the one-time impact of the potential cost over several years, while also reducing the uncertainty for payers. When a treatment first comes to market, there is little to no robust durability data, so the risk of financing such a treatment needs to be shared, with payments made as pre-agreed performance metrics are met, Bucklar said.

Financing CAR-T therapies is trickier because patient success is more difficult to judge, Krishna Komanduri, MD, professor and Kalish Family Chair in Stem Cell Transplantation, explained. CAR-T is a type of immunotherapy that involves a number of steps to treat advanced cancers; patients may relapse after one or many years. Under a milestone contract for CAR-T, a payer would provide compensation at the time of delivery to the innovator with an understanding that if a patient recovery milestone is not met, a rebate for that payment would be forthcoming.

The reality is that the impact of gene therapy is asymmetric, impacting small health plans more greatly than those with a larger number of covered lives, and many patients switch plans, noted Michael Ciarametaro, MBA, vice president of research, National Pharmaceutical Council. One way to address this challenge is through orphan reinsurers and benefit managers (ORBM), “which are organizations that develop expertise in the management of patients with a set of rare diseases that are difficult for individual payers to manage.” Another way is through multi-payer risk pools, in which payers combine together to provide coverage for orphan and ultra-orphan diseases. This could be done as state-sponsored Medicaid pools or via an ORBM.

But there are barriers to putting some of these solutions into real-life practice, a point that was reiterated throughout the day. Darin Gordon, founding partner, Speire Healthcare Strategies, pointed to Medicaid Best Price—the lowest price for which a treatment is offered and must be the rate provided to federal programs—and the Anti-kickback Statute (AKS) as regulatory barriers to innovative financing solutions for curative therapies. “It throws water on the discussion,” he said. Current AKS regulations provide a safe harbor for traditional rebates, but do not explicitly include value-based agreements that tie payments or refunds to outcomes and may pay for monitoring visits that relate to those outcomes.

In his closing remarks at the conference, U.S. Senator Sheldon Whitehouse (R-RI) echoed those concerns about Best Price and AKS, but emphasized the importance of seeking solutions to health spending issues. “We don’t want to stifle innovation, but we want to make sure that the innovations actually reach patients. We recognize the work that MIT pilot programs are doing, and it will help as we seek sensible reforms.”