Developer views and challenges

Cell and gene therapy (CGT) products and clinical trials have, because of their genetic specificity, targeted diseases or conditions impacting smaller numbers of patients. Limited patient volume as well as the durable/curative nature of these therapies has expanded the considerations for developers for CGT product launch and adoption. Developers have several unique challenges with CGT:

1. Managing the manufacturing and distribution channel: Two strategic challenges developers face when launching a product are:

i. Clinical requirements for treatment administration: Complex product administration may restrict the sites of administration to select settings or even to centers of excellence. Provider restrictions for safe product administration may limit access locations, resulting in a potential need for developer-run patient and caregiver support programs.

ii. Developers will need to predict product penetration and adoption rates in order to guide manufacturing. Treatment for prevalent conditions may anticipate pent-up demand, but payers’ coverage decisions may blunt that demand. Treatment access will be more likely for patients facing a life-or-death scenario compared to patients where treatment impacts quality of life. Product production at correct levels is required with any product launch, but the impact of incorrect levels is greater when the total number of eligible patients to be treated is small and the product cost is high.

2. Conduct long-term follow-up studies: The Food and Drug Administration (FDA) has established a requirement for long-term follow-up (LTFU) studies to collect data about delayed adverse events following administration of CGT. LTFU protocol detail patient visit schedules, sampling plan (for patient test samples, such as blood), methods of monitoring tests, and clinical events of interest. LTFU observations include scheduled physical examinations performed by a health care professional once a year during the first five years (or until the completion of LTFU, if the LTFU is less than five years), unless the assessed risks associated with the gene therapy product indicates that evaluations should be done more frequently.

3. Consider financial solutions to support payers and patient access: Developers are challenged by payers’ heightened concern regarding the financial risk and durability of CGT. In addition to the high upfront costs of individual treatments and the financial impacts of multiple treatments, payers wish to address performance risk. Strategies for addressing risk require developer collaboration on payment timing and performance metrics. Various models of value-based payment arrangements address both payment timing impacts and product performance. Payment timing may be addressed through the use of third parties such as specialty pharmacies, or by implementing payment models recently allowed through updates to Medicaid Best Price requirements (see below). Product performance metrics must adhere to requirements on communications between developers and payers. Further information on this topic is found in the research brief Impact of FDA guidelines on Communication between Developers and Payers on Metrics in Performance-Based agreements.

4. Comply with Medicaid Drug Rebate Program requirements for value-based payment arrangements. CMS recently passed rules under the Medicaid Drug Rebate Program to encourage the use of value-based purchasing (VBP). CMS provided developers three options for Medicaid-required best price reporting. VBP contract options included: 1) report a single ‘traditional’ best price; 2) use a bundled sales approach to offer a best price that is averaged based on sales with VBP contracts; 3) report multiple best prices that are available with VBP contracts. While details on reporting and implementation plans continue to develop, FoCUS continues to collaborate with various stakeholders to determine the rule changes’ impact. This Health Affairs article authored by FoCUS staff, Medicaid Best Price Volatility Could Inhibit Payment Innovation, reviews VBP contract options as they apply to CGT.

The financial solution adoption section includes more information on the regulations impacting these solutions. Recommendations or suggestions to address the challenges are also included in the financial solutions section.