Blog | 6/15/2018

Commercial and Developmental Innovation: What Can We Learn from Gene Therapies?

By Alexandra Young (Senior Analyst), Patrick Campbell (Senior Analyst), Laura Gullett (Senior Analyst), and Daniel Brog (Senior Analyst)

In a previous post series, we discussed some of the many promising gene therapies in development, including Luxturna. While these gene therapies offer new promises for rare diseases such as retinal blindness, spinal muscular atrophy, Duchenne muscular dystrophy, and hemophilia, there are unique barriers facing companies developing and commercializing these innovative therapies. As one of the pioneers in the gene therapy space, Spark Therapeutics has taken a leading role in exploring innovative ways to overcome these barriers, and the current strategies for its therapy Luxturna, indicated for a rare form of congenital blindness, serve as a strong case study.

Reimbursement considerations are foremost among the concerns of gene therapy innovators. With Luxturna’s compelling efficacy data to-date, justifying the value of its $425,000 a dose (or $850,000 for both eyes) price tag may be intuitive. However, as with most expensive therapies, a key reimbursement question becomes not one of value but of affordability. Spark is working with payers, regulators, and CMS to develop innovative outcomes-based contracts that operate within the existing reimbursement structure to share both short-term and long-term risk. However, while Spark has had some early payer agreements, it is still too soon to determine how widespread the coverage Spark will receive. Additionally, payers may be amenable to covering such a high-priced therapy for an orphan indication with a very limited population, but it could be much more difficult to obtain coverage for a high-cost gene therapy for a larger market. Another potential challenge for gene therapy companies will be integrating the necessary steps required for reimbursement coverage into a physician’s workload. Navigating through insurance hoops will require a significant initial upfront time investment from physicians. It may be necessary early on to educate both physicians and hospital administrators on steps and resources required to navigate the prior authorization process. Additionally, companies could preemptively build the infrastructure in order to alleviate the reimbursement burden. Part of the infrastructure would include reimbursement support case managers to oversee the prior authorizations and reimbursement forms for physicians.

Long-term efficacy for gene therapies is still unproven, and for payers that means uncertainty around value. Outcome-based contracts (OBCs) have increasingly become a tool that payers and drug companies utilize to share risk when the benefit may be uncertain. However, while a long-term OBC may make sense given the long-term benefit of gene therapies, they face the problem of patient “churning”, whereby US patients change commercial plans on average every two to three years. To address this issue, Spark used a 30-month OBC, intentionally designed around the median length of time of a patient’s healthcare plan.

Ensuring proper administration and use of gene therapies is critical, particularly when the costs-per-dose are high. To ensure proper administration of Luxturna, Spark has developed several centers of excellence staffed with physicians and staff well-trained in the administration and follow-up of the therapy. These centers of excellence not only ensure quality control, but enable Spark to establish the beginning of a long-term relationship with its patients through direct contact and patient support. Technical hurdles are still present for gene therapies despite Luxturna’s success. From simpler challenges such as determining minimum effective doses to more complex challenges such as developing treatments for polygenic diseases, there are many new technical and clinical barriers to overcome. Moreover, given the plethora of gene therapy and editing mechanisms in development, it remains to be seen which modality may be most suitable for each genetic condition. While many gene therapy companies are contending with these issues, the challenges are hardly unique to these new genetic treatment modalities. Looking forward, many traditional biopharma companies in the orphan and oncology space may need to cope with these same issues, and indeed, some already have. As larger companies begin to make moves into the gene therapy space, it will benefit them to consider how they can leverage strategies pioneered by smaller, nimble innovators.

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