Patient financial implications
Many patients affected by the conditions targeted by Cell and Gene Therapies (CGTs) often already face high financial burdens. Patients’ direct healthcare out-of-pocket costs include copays, coinsurance payments, deductibles, and high annual cost-sharing limits. Some patients may have separate medical and pharmacy deductibles.
For example, among Medicare patients, if a CGT is covered under the medical benefit, the patients will be subject to either an un-capped 20% out-of-pocket cost or the share of cost dictated by their Medicare Advantage plan or Medigap plan. If the treatment is covered under the pharmacy benefit, Medicare Part D patients will face an un-capped 5% coinsurance payment after meeting their plans’ initial deductibles and coinsurance payments. Patients covered under Medicaid typically have very modest copays. According to the Kaiser Family Foundation Employer Benefit Survey of 2022, 32% of patients on commercial plans pay an annual deductible of $2,000 for single coverage. Just as for payers, the concentrated upfront payments for years of subsequent benefit present barriers for patients. Additionally, patients have non-medical out-of-pocket costs including travel and possible loss of income due to treatment.
Payers and developers should consider the implications of Precision Financing Solutions for patients of CGTs in finalizing their approaches. Patient copay costs primarily serve to encourage patients to make more appropriate healthcare choices when effective, lower-cost options are available. For CGTs, this design objective is often moot given the patient cost burden or even lack of alternative treatments. Plus, the cost-sharing for CGT is a small portion of the total cost. FoCUS participants, including several payers, suggested that copays, deductibles, and coinsurance be waived for these products provided this could be done without inducing adverse selection. That said, waiving costs can require state insurance approval for the change in benefit design and may take up to 18 months. Additional details on benefit designs may be found in the FoCUS research brief, State insurance regulations regarding benefit design (deductible and co-pay waivers)
Stakeholder and FoCUS participants have recognized various partial solutions to patient financial challenges that would not induce adverse selection for payers covering CGTs.
- Pharmaceutical assistance programs are a partial solution that may also apply to CGTs. Manufacturers of chronic, rare disease medications (e.g., intravenous immunoglobulin or enzyme replacement therapies) often offer copay support programs for patients with commercial insurance. Manufacturers also donate to 501(c)(3) organizations to support access for patients with public insurance.
- In the gene therapy space, Spark Therapeutics has established an access support program Patient resources - LUXTURNA® (voretigene neparvovec-rzyl) and a public insurance fund available to patients with Inherited Retinal Disease. Sparks, in coordination with The Assistance Fund, helps patients and families by providing financial assistance for their copayments, coinsurance, deductibles, and other health-related expenses
These types of programs are helpful, but likely inadequate. Further limiting the patient benefit of assistance programs, some Pharmacy Benefit Managers (PBMs) have instituted Accumulator Adjustment Programs (AAPs) that can have a negative financial impact on patients by no longer allowing copay assistance amounts to count towards a member’s accumulator, which is the dollar amount applied to the patient’s deductible or to out-of-pocket costs. If AAPs are applied to CGTs, any positive effects of a manufacturer’s assistance program would be negated.
- Providers may also provide discounts and charitable write-offs. Non-profit providers may be well suited for this due to their mission and legal rationale to do so. Such capacity, however, is limited.
- The financial services industry already provides patients with second mortgages, consumer loans, and credit card debt, among other services to aid in financing healthcare costs. FoCUS has also suggested additional financial instruments, such as personal healthcare loans. Continued innovation in financial services, particularly for patients with poor current credit scores but improved prospects after therapy, is needed.
Additional detail on patient financial challenges may be found in the research brief, Themes in patient and caregiver financial challenges.