In an article published on the Health Affairs Blog, the National Pharmaceutical Council and the Analysis Group conducted market research to explore payer views of the potential roles that existing and new alternative payment approaches could play in managing the financial risk and impact of gene therapies. They found that although payers are thinking about how to cover gene therapies, more work is needed to fully address seven important coverage challenges:
- Financial risk and impact of gene therapies is an important concern for payers: The majority of payers, both on a regional/local level and a national level, expressed “very high” concern about managing the potential financial risk and impact. Both rare diseases and “common chronic diseases” caused concerns for payers about shifting from the current standard of care with existing treatments to one-time gene therapies.
- Payers would consider alternative payment models to manage plan risk under the right set of circumstances: Every national payer and more than half of regional payers surveyed said they expected to enter into alternative payment arrangements for gene therapies within the next three years.
- Payers expect to use a combination of new and existing approaches to manage the financial risk of gene therapy: Most payers (excluding Managed Medicaid) were most likely to expect to use a combination of approaches to manage gene therapy-related financial risk. About half of those payers expected alternative payment arrangements to play a role in managing that risk, either alone or in conjunction with other approaches.
- Given uncertainty about magnitude and duration of clinical effects, payers likely will require performance guarantees with alternative payment approaches: For approaches that smooth payments over time, nearly all payers said they would expect payment to be dependent on meeting performance-based requirements – and more than 95 percent said expecting them to pay for patients who have stopped responding to a therapy would be a “deal breaker.”
- Greatest patient access challenges may be encountered at smaller employer plans and managed Medicaid plans: Nearly one-third of smaller plans surveyed said they were likely to exclude coverage for gene therapies.
- Payers’ preferred approaches may not be entirely effective in addressing their concerns: Many payers said they would use stop-loss/reinsurance in conjunction with a payment agreement, but this approach could result in higher costs for patients and payers.
- Many payers were uncomfortable with “patient portability” proposals: Roughly three-quarters of payers surveyed called allowing patients to carry payments with them if they switch plans a “deal breaker.” Payers were not interested in accepting financial responsibility for such patients who switch into their plans.