Amortization of gene replacement therapies: A health policy analysis exploring a mechanism for mitigating budget impact of high-cost treatments

Challenges for gene therapy in the financial sustainability of health systems: a scoping review

AIM

To review the available evidence about the strategies implemented or proposed for coverage or reimbursement for currently approved gene therapies.

METHODS

A scoping review was conducted to analyze the evidence published during the years 2016 to 2023. The main search criteria were coverage or reimbursement of gene therapy by healthcare systems. The eligible articles were those that described or proposed a financing model used to provide coverage in the various systems around the world.

RESULTS

The study identified 279 publications, and after removing duplicates and screening for eligibility, 10 were included in the study. The results show that various financing models have been proposed, including subscription-based payment models, outcome-based payment models, and amortization strategies. However, several barriers to implementing these models were identified, such as deficiencies in informatics systems for data collection, changes in laws or regulations, the lack of accessible clinical endpoints and administrative costs.

CONCLUSION

This scoping review provides an overview of financing strategies for gene therapies. Gene therapies can cure rare or previously intractable diseases, but their high cost can make access difficult. Publishing experiences with these models can help evaluate their use and gather more evidence for their effectiveness.

The impact of amortization of gene therapies funding on the results and conclusions of CEMs and BIMs

BACKGROUND

Gene replacement therapy (GRT) is a treatment method used to combat or prevent various diseases. Its high one-off cost constitutes a major obstacle for successful market access. This paper aims to assess and discuss the applicability of amortization in models, such as cost-effectiveness models (CEMs) and budget impact models (BIMs) informing HTA recommendations and reimbursement decisions.

METHODS AND FINDINGS

A hypothetical CEA and BIA were considered. The objective was to compare the GRT with and without amortization. A straight-line amortization model was used. The CEM and BIM were considered and assessed based on two set of scenarios: considering different amortization duration or different discounting rate. The impact of amortization against the total cost of gene therapy was assessed for all the scenarios. The cost difference between GRT with and without amortization in relation to its total cost was -$58,855, thus amortization does not have a significant impact on the results and conclusions of the cost-effectiveness analysis. For BIM in the base case, amortization had no impact on the results.

CONCLUSION

Amortization has negligible impact on the results of CEM and total BIM and no impact on the conclusions from the model. One exception is the budget impact in case of an amortization period longer than the time horizon of BIM, where a half of the GRT price is moved beyond the model time horizon. Amortization has a distinguishing effect from an accounting perspective, but it does not have any implication for payers.

Value-Based Pricing for Patent-Protected Medicines Over the Product Life Cycle: Pricing Anomalies in the "Age of Cures" and Their Implications for Dynamic Efficiency

OBJECTIVES

Conventional cost-effectiveness analysis (CEA) for the value-based pricing of new medicines largely ignores the implications of limited market exclusivity (ie, patent-protection periods plus any exclusivity granted by regulators). This paper explores the implications of this methodological shortcoming, which produces several pricing anomalies with potentially unintended effects on research and development (R&D) incentives.

METHODS

We illustrate these implications by comparing 4 stylized examples of increasing complexity, from short-term cures for acute conditions to long-term cures for rare, health-catastrophic conditions.

RESULTS

(1) Conventional-CEA will project a different result than an adjusted CEA that considers generic or biosimilar entry; (2) free and flexible pricing of long-term treatments (eg, statins for hypercholesterolemia) or repeated-dose cures (eg, insulin for type 1 diabetes) for chronic conditions will likely result in predictable price increases at the end of the exclusivity period that may be perceived as unjustified or unsupported; and (3) one-time administration "cures" (eg, gene therapy for spinal muscular atrophy) have the potential to allocate a large share of the social surplus to the manufacturer over the product lifetime, which may or may not be dynamically efficient per se, but may also inadvertently disadvantage the development of valuable long-term treatments or repeated-dose cures for chronic conditions.

CONCLUSIONS

We highlight the need for additional research on long-term solutions to these issues that would aim to promote dynamically efficient global R&D. More work is needed on the following: (1) relationships between social surplus allocation and the amount and composition of global R&D, as we may be as likely to be encouraging excessive R&D in some areas as to be undersupplying it in others; and (2) relating the size of the surplus reward to R&D cost and, thus, the return on investment.

Cell and gene therapy regulatory, pricing, and reimbursement framework: With a focus on South Korea and the EU

Ever since relevant bioengineering technologies have sufficiently matured to the platformizable commercialization stage, a slew of money has flocked to the cell and gene therapy market over the last few years, resulting in an abundance of clinical studies in the field. Newer modalities have brought up a string of regulatory and legislative tasks, such as developing guidelines and legislative rules to systematically regulate newer pharmaceutical products. Accordingly, another layer of legislation and guidelines tailored for cell and gene therapies has been introduced and is expected to evolve on par with technological progress. Furthermore, authorities have shifted to pricing and reimbursement policies that can share risks for cost and outcome among stakeholders altogether, such as developers and the government, while expanding the accessibility of patients to innovative cell and gene therapies. This review attempts to capture the salient regulatory features of the cell and gene therapy market in the context of South Korea and the European Union and points out where two sovereign entities currently stand on each policy element and how each tackles regulatory challenges. We can observe the converging trend where regulatory, pricing and reimbursement rules of adjoining countries in the supranational union or member countries of a consortium are getting more aligned. Evidently, concerted efforts to share regulatory science knowledge and embrace reference pricing have played their parts. The authors argue that policy priorities should be placed on initiatives to harmonize with other medical authorities to better the rights of patients and clear out the uncertainties of developers, ultimately to share and advance regulatory science and layout forward-looking policies at opportune times.

Critical Reflections on Reimbursement and Access of Advanced Therapies

Background: The health economic literature has questioned the cost-effectiveness and affordability of advanced therapies, proposed adjustments to value assessment frameworks, and discussed the use of outcome-based managed entry agreements and staggered payments in the last few years. The aim of this manuscript is to conduct a critical reflection on assessment criteria and access conditions for reimbursement of advanced therapies.

Methods: A narrative review of the peer-reviewed literature and grey literature was conducted in April 2021 by searching PubMed; Google Scholar; policy and legislative documents; websites of health technology assessment agencies, advanced therapy organisations, governmental advanced therapy innovation programmes, consultancy agencies; ISPOR conference abstracts and presentations.

Results: Based on the available evidence, this manuscript argues that: a) advanced therapies can be cost-effective at high prices set by manufacturers; b) the economic evaluation framework adopted by many payers under-values these products; c) advanced therapies can be affordable and may not require spread payments; d) outcome-based managed entry agreements are theoretically attractive, but challenging in practice; e) the cost-effectiveness of advanced therapies depends on the outcome-based managed entry agreement and payment approach; f) there is a role for multinational collaborations to manage reimbursement and access of advanced therapies.

Conclusions: This manuscript shows that there is no single approach to reimbursement and access of advanced therapies. Instead, we support a more tailored assessment of health economic aspects of advanced therapies, which considers the heterogeneity of these products and their target populations.

Gene Therapy Evidence Generation and Economic Analysis: Pragmatic Considerations to Facilitate Fit-for-Purpose Health Technology Assessment

Gene therapies (GTs) are considered to be a paradigm-shifting class of treatments with the potential to treat previously incurable diseases or those with significant unmet treatment needs. However, considerable challenges remain in their health technology assessment (HTA), mainly stemming from the inability to perform robust clinical trials to convince decision-makers to pay the high prices for the potential long-term treatment benefits provided. This article aims to review the recommendations that have been published for evidence generation and economic analysis for GTs against the feasibility of their implementation within current HTA decision analysis frameworks. After reviewing the systematically identified literature, we found that questions remain on the appropriateness of GT evidence generation, considering that additional, broader values brought by GTs seem insufficiently incorporated within proposed analytic methods. In cases where innovative methods are proposed, HTA organizations remain highly conservative and resistant to change their reference case and decision analysis framework. Such resistances are largely attributed to the substantial evidence uncertainty, resource-consuming administration process, and the absence of consensus on the optimized methodology to balance all the advantages and potential pitfalls of GTs.