Installment payments for CGTs – A practical solution in the US?
Curative cell and gene therapies or CGTs (also referred to as single and short-term treatments or SSTs) present a unique challenge: the requirement to pay a high price in the short-term despite uncertainty about the long-term benefits. If this was the only problem, there is a solution which has been proposed in several forums (1) spreading the payment out over time in some form of an installment approach, for as long as the treatment does not fail, or some agreed upon last payment date. Such an outcomes-based, RWE solution has already been implemented in Italy and Spain for Kymriah® (Novartis) and Yescarta® (Gilead), two CAR-T cell therapies that were approved in 2019 in many key countries. An alternative solution that is preferred by some manufacturers is a promise of reimbursement (of the one-time price) to the payer in case of treatment failure, but it is complicated to implement, and may only be attractive with added layers of de-risking on the part of the payer such as credit-default swaps should the manufacturer become insolvent etc. So let us stick to payments by installments for now.
Implementing payment by installments would allow the payers to de-risk the cost of potential cures and similar one-time treatments. But there is a quite a bit of pessimism about the probability that such an unprecedented payment solution could be adopted in the US, at least in the short-term, because its multi-payer system creates numerous obstacles to the adoption of any long-term contracting platform linked to patient outcomes.
But for this US specific problem, there is a solution too, which has been suggested by several actuarial experts: The patient would have to agree to a contract rider that gives the payer the right to continue to engage with the patient, even if she no longer has coverage through the original plan. The contract rider would also give the payer the right to interact with the patient’s physician(s) even if they have changed. Finally, the patient would also have to agree to participate in the collection of long-term outcomes data as a condition for the CGT treatment coverage. This last condition is already implemented in France and the UK for Kymriah® and Yescarta® where reimbursement is contingent on collecting additional data (at the cohort level) and subject to future reassessments (2).
There is a need to implement this solution in the US to understand its operational challenges and then fine-tune it to make it as pragmatic and acceptable as possible.
(1). ICER. Value Assessment Methods and Pricing Recommendations for Potential Cures: A Technical Brief. August 2019.
(2) Jorgensen et al. Outcomes-based reimbursement for gene therapies in practice: the experience of recently launched CAR-T cell therapies in major European countries, J Mark Access Health Policy. 2020 Jan 15;8(1)
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