Insights into the cost-effectiveness for cell and gene therapies

“Cell and gene therapies are some of the most exciting frontiers in modern medicine and have the potential to target rare and difficult-to treat-disorders,” said Dr. Daria O’Reilly, lead health economist at TELUS Health, introducing a panel discussion focused on these emerging treatments at the TELUS Health’s Annual Conference 2021. The challenge, she pointed out, is that cell and gene therapies are often very expensive, which means it’s necessary to consider the trade-off between the cost and the value to patients, payers and the health care system.

Joan Weir, director of health and disability policy at the Canadian Life and Health Insurance Association (CLHIA), started the conversation with some key definitions. Cell and gene therapy, she explained, is a medical field that focuses on the genetic modification of cells to produce a therapeutic effect or the treatment of disease by repairing or reconstructing defective genetic material. Cell therapy involves transferring cells with the relevant function into the patient. Gene therapy involves transferring genetic material, usually in a carrier or vector such as a virus, into the appropriate cells in a patient’s body. Both are generally one-time treatments that may stop the progress of a disease or alleviate its underlying cause – which makes them potentially curative.

That’s the good news. However, she pointed out, “the overall affordability of treatments is of concern to public payers and private payers because these are large-ticket items.” The question of affordability applies to plan members too, Weir emphasized, since most insurance has a co-pay. A $1 million treatment with a 20% co-pay costs the plan member $200,000 – far out of reach for most people. Possibly adding to the cost is the place of administration, for now generally a hospital, which may necessitate travel for the patient and possibly a caregiver as well. Furthermore, an “ex vivo” therapy, in which the treatment is applied to cells extracted from the patient and then transplanted back, requires two hospital visits. 

Weir explained that payers need to weigh the one-time cost of a cell or gene therapy against the ongoing costs of treatment using more conventional therapies. At the same time, it’s important to note that cell and gene therapies are not eligible for pooling because they are one-time treatments. Furthermore, funding structures that spread payments over a period of time can make cell and gene therapies more affordable, but can introduce complications if the patient moves between payers – such as when an employer switches insurers. She said there are also uncertainties around the longer-term effects of these new treatments. 

Karen Lee, director of health economics at the Canadian Agency for Drugs and Technologies in Health (CADTH), and Dr. Mike Drummond, professor of health economics at the University of York in the U.K., both spoke about whether cell and gene therapies need a different evaluation framework. Lee said CADTH explored this question a few years ago and determined that the existing evidence package used to measure clinical effectiveness and cost effectiveness still applies – but additional ethical and implementation considerations may be incorporated. Drummond agreed: “You don’t need a completely different approach … but there may be additional things you might want to consider when you’re assessing a [cell or] gene therapy.” 

For plan sponsors, Weir said it’s important to keep in mind that the way they evaluate coverage in a benefits plan is different from the approach public payers take. “Plan sponsors typically look at their benefits plan through a lens of their employees – attracting and retaining talent – [and] especially today, with the multigenerational workforce that we have, employers need to look at, from starting off to working into retirement, what are the benefits a person needs?” she said.  “As well, employers are looking at keeping their workforce productive. If somebody’s on disability, what do I do to get them back to work [and] keep them productive at work?” All of that may change the cost-benefit calculation.

She believes that taking advantage of the tremendous medical promise of cell and gene therapies will ultimately require a mix of public and private funding. “We think that there is definitely shared accountability between public and private plans, and that’s the only way to really ensure stable, sustainable funding for [cell and gene] therapies,” Weir concluded.