Charting A Course Into The Unknown: Manufacturer Considerations In Gene Therapy
By David Carr, PhD, Director, Global Pricing & Market Access at PRECISIONadvisors and Jeremy Schafer, PharmD, MBA, SVP, Director, Access Experience Team at PRECISIONvalue
Gene therapy is a market still in its infancy but poised for significant growth. A report published by PhRMA in March 2020 noted that there were 362 cell or gene therapies in the pipeline which represented approximately a 25% increase compared to the same assessment in 2018.1 Currently approved agents are sparse however with only a handful of gene therapies available in the US market. Uptake of available therapies has varied but considerable discussion has been generated regarding price, accessibility and cost effectiveness. As manufacturers and other healthcare stakeholders try and chart a course in the emerging gene therapy field, there are many considerations a manufacturer should be mindful of as they plan for a future launch into this emerging space.
Have a Plan for Durability of Effect
The gene therapy market received a shock when valoctocogene roxaparvovec, the highly anticipated gene therapy for hemophilia being developed by BioMarin, received a complete response letter from the FDA in August 2020.2 Analysts and BioMarin itself had expected the product to be approved given the data available including efficacy data showing that many patients had their annualized bleed rates and need for infused clotting factor drop to zero. In the complete response letter, the FDA requested an additional two years of data with a request for “substantial evidence of a durable effect”.2 To be fair to the FDA, data on valoctocogene roxaparvovec indicated that the effect of the treatment had a tendency to wane as time progressed with the maximum duration of effect not yet being determined but possibly lasting up to 8 years.3 A loss of treatment effect, particularly in a disease like hemophilia, can have significant ramifications and may have been why the FDA hit pause.
The FDA isn’t the only stakeholder interested in durability. A market research survey of health plan decision makers found that durability of effect was the most desired information for gene therapy products by payers.4 The cost effectiveness of a gene therapy will also be highly dependent on the durability of effect. A treatment that has a waning, or even disappearing, effect will have reduced value, particularly if the patient then reverts to costly therapies as would be the case with hemophilia. Questions on durability may also lead payers to manage a product more strictly upon initial approval for fear that the significant upfront investment will not bear out if the drug fails after only a couple of years. For gene therapies, which may be developed by small biotechs with limited funding, speed of approval is paramount. So how can manufacturers balance a desire for durability data with a need to get product to patients quickly.
Robust durability data is often not going to be available at the time of FDA approval. Manufacturers of gene therapy products may instead share information with payers and other stakeholders on the plan for capturing longer term data and when the data will be available. The manufacturer can then follow up with regular press releases and publications on the latest durability data from ongoing clinical trials. Gene therapy manufacturers may be able to allay payer fears of loss of effect by offering outcomes agreements that would refund a portion of the drug cost if treatment effect is lost earlier than anticipated. Finally, durability of effect should factor into a manufacturer’s pricing decision. If the gene therapy is only expected to last five years for example, a price that offsets sets expected patient costs over 3-5 years is preferable versus one that would only be net cost effective if the effect lasted more than five years.
Prepare for a Cost Effectiveness Assessment
The high price tag of gene therapies combined with the potential for long term patient outcomes makes this category of medications an ideal target for cost effectiveness analyses. The Institute for Clinical and Economic Review (ICER) is perhaps the most well-known of the cost effectiveness assessment organizations in the United States. ICER has reviewed each gene therapy that has come to the market thus far in the United States including Zolgensma and Luxturna. A review of valoctocogene roxaparvovec is also underway with a final report due before the end of 2020 although it is unknown if the FDA response will have any impact.5 Manufacturers of gene therapy products should expect that a cost effectiveness analysis of a product will be done not only in international markets but in the US as well. In the US, this may take the form of an ICER analysis or an analysis done by individual payers or academic groups. Being prepared for these analyses, and how to respond to the findings, is key.
A gene therapy manufacturer preparing a product for launch should include conducting cost effectiveness assessments mirroring ICER as well as prominent regulatory bodies in global markets (NICE, etc) as a core part of the launch plan. Completing these exercises will help a manufacturer understand what cost effectiveness estimates may be attached to their product but also help develop talking points to either support, or refute, what is found by these organizations in the future. Additionally, conducting internal cost effectiveness analyses on a product may allow the manufacturer to provide input during the process of an organization like ICER and possibly influence the result to be more aligned with what the manufacturer found. Even if the eventual outputs of analyzing bodies ends up being different than what the manufacturer had found, the manufacturer having their own analysis allows for a more robust discussion with customers and the ability to push back on the findings of cost effectiveness assessment organizations.
Contracts at the Ready
Some form of contract offers to payers have become an expectation with gene therapy launches. Novartis Gene Therapies offered payers multiple contracting options including an outcomes arrangement and a pay over time (annuity) option when Zolgensma launched.6 Spark provided similar options when launching Luxturna but also offered an innovative option that would see the product dispensed via a specialty pharmacy thus avoiding overhead associated with traditional buy and bill.7 The upfront cost of gene therapies means that payers will expect some form of guarantee that if the product does not work, the potentially millions in dollars spent will not be wasted.
An outcomes agreement provides the manufacturer with an opportunity to blend the science, the cost effectiveness assessment, and the pricing rationale into a cohesive value story. The contract may consider providing differing levels of return based on when the efficacy of the product is lost. To calculate the rebate at each timepoint, the manufacturer will need to be able to discuss the value of the drug over time and what value has been provided to the payer during the time period. Additionally, a gene therapy product may not completely fail but instead could provide some level of residual activity meaning that the rebate may be lessened. This could be particularly important in diseases like hemophilia where even marginal activity of a gene therapy could significantly reduce the use of other chronic therapies and save payers significant healthcare dollars. Manufacturers can also explore how their contract and access offerings may align, or conflict, with the emerging models that payers are developing. Market leading PBMs have begun to offer programs where employers pay a per member fee and then are shielded from the cost should a member require a gene therapy. These programs may also require the product be obtained from a specific specialty pharmacy. A gene therapy manufacturer can explore these programs prior to launch and may find that partnering with certain programs can help enhance access.
The launch of a gene therapy is an event with limited case examples to follow and numerous unique considerations. The science of the product will lead the way, but manufacturers need to consider other critical areas. Having durability data of interest to payer customers, or a plan on when and how such data will be communicated, is important. Understanding the cost effectiveness of a product by conducting internal analyses helps the manufacturer prepare for conversations they will have with both payers and regulatory bodies as well as round out the value story. Contracts can be seen not as a cost but as another way to reinforce the value of the product but also speed market access by calming concerns of payers that an underperforming product will create economic waste. Ensuring that these steps are completed and integrated into a cohesive launch plan will reduce barriers upon product launch and help providers more quickly deliver innovative, and at times, curative, treatments to patients that have waited so long for them.
Jeremy provides enterprise leadership across Precision’s Access Experience Team and leads integration with other enterprise teams including health economics outcomes research, provider marketing, access and analytics, and media outreach in the specialty space. He has been involved in projects including payer value proposition development, ICER counter strategy marketing, market research in emerging areas like gene therapy and biosimilars, value assessment, and competitive simulations in oncology and specialty markets.
David Carr, PhD
Director, Global Pricing & Market Access
David Carr brings over 6 years’ experience executing and managing diverse pricing and access projects, as a Director in the Global Pricing, Market Access & Analytics team at PRECISIONadvisors. David has broad knowledge across European geographies and multiple disease areas, and has specialist expertise in strategic consulting for orphan drugs and cell and gene therapies. He has also published analysis and commentary on trends within the pharma and biotech space, including insights on innovative contracting agreements for high cost therapeutics.