A Look at the Current, Future State of Cell and Gene Therapies in the United States

During a session at the 2022 Asembia Specialty Pharmacy Summit, held in Las Vegas from May 2-5, Kyle Felmet, vice president of specialty commercialization at Two Labs Pharma Services, and Jennifer Lospinoso, managing director and consulting lead at Riparian LLC, a Two Labs company, laid out the evolution of cell and gene therapies in the United States and offered insights on the future of these industries.

These therapies offer “new hope for a different type of treatment,” Felmet explained, as the goal for cell and gene therapies is to provide a potential 1-time treatment that could last anywhere from 5 to 20 years, offering significant clinical durability and efficacy for patients with chronic conditions.

Describing the industry as where the future of medicine is heading, Felmet outlined several therapies on the market today, including Zolgensma (onasemnogene abeparvovec-xioi) for spinal muscular atrophy (SMA).

This treatment essentially gives patients lacking the SMN1 gene “the exact working copy of SMN1 that they’re going to have in their body for the rest of their lives.” Just a 1-time infusion of the treatment can significantly stall progression of SMA.

Multiple companies are also working to bring hemophilia gene therapies to market.

When it comes to differentiating between the 2 forms of therapy, Felmet explained cell therapies work by infusing live cells into a patient to help lesson or cure a disease. These therapies can be autologous, whereby cells used to create the drug come from the patient, or allogeneic, where the treatment starts with donors.

The latter therapy is of particular interest due to its scalability potential. With a pool of large donors, positivity rates can increase, but more time is needed to understand the efficacy of allogeneic cell therapies, Felmet said. In contrast, gene therapy consists of a replacement or introduction of a new gene to the patient via a viral vector, or modified virus.

To date, there has only been a handful of approvals in this space, while the high cost of these therapies has garnered some reimbursement concerns. However, as Felmet notes, the price points are reflective of the products’ clinical durability and efficacy, and effects of infusion could potentially last years.

In addition, most products are administered in an inpatient setting and although this model may be sustainable in the short term with only a few products approved, looking to the long term, as more products become available to more patients, treatment centers may not be able to manage the influx of patients needing such complex therapy administration.

Although current growth in this industry is sustainable, Felmet predicts exponential growth in the future, which could also lead to increased storage and distribution challenges down the road. Most therapies are delivered under liquid nitrogen conditions.

Eight products are currently approved in the United States, but over 1000 clinical trials are ongoing for cell and gene therapies, ranging from phase 1 to phase 3, with most research focused on oncology, rare disease, ophthalmology, and neurology.

“There are 11 companies that expect to file their [biologics license applications] in 2022,” with 5 additional companies that may do the same in 2023, Felmet explained. In the next 5 to 8 years, estimates project up to 70 cell and gene products could be approved.

Furthermore, products in the pipeline are intended for much broader patient populations than those available, with conditions ranging from sickle cell disease to Alzheimer disease.

“That's going to take us from this heavy inpatient focus to where we're going to have to shift to more outpatient treatment,” thus increasing the role of specialty pharmacies, Felmet said. Payers are also unwilling to compensate in-hospital markups for inpatient administration and will likely put site of care initiatives in place to incentivize outpatient settings. Specialty pharmacies can also be integral in collecting patient follow-up data and driving forward value-based payments.

In her portion of the talk, Lospinoso outlined evolution in pricing models for cell and gene therapies.

Value-based pricing and payment arrangements are a “critical key component to a modernized health care system because they allow everybody a flexible and sustainable approach for paying for these therapies and cures,” she said.

Lospinoso went on to explain several hypothetical scenarios weighing the value and costs of different therapies based on their efficacy and durability.

Based on the value of the treatment seen over years of follow-up, manufacturers can effectuate arrangement when outcomes are tied to pricing. Under a rebate model, if the therapy proves to be immediately effective, there is no rebate due for the manufacturer, she said. If down the line it proves to be noneffective, a rebate would be due, resulting in an increased price.

“In this example, if it continues to be effective over the duration of the measurement period of just 3 years, that therapy would command the full price of $1 million,” Lospinoso said.

Installment payments offer an additional alternative. If the treatment is seen as effective immediately following administration, an installment payment is due. “If it proves to not be effective immediately after the administration, there is no installment payment due, which effectively results in a zero-dollar price due," she noted. If, after 3 years, the product is still effective, a payment is due resulting in the capturing and realization of the full price of the product; if it is not effective at that time, no additional payment is due.

“Values-based pricing arrangements, whether they're effectuated through a rebate or installment payment, they're very valuable for manufacturers and patients,” Lospinoso said. “They allow manufacturers to enter into risk sharing arrangements using a defined set of measured outcomes and defined set period system.”

Currently, 11 states have CMS approval to engage in value-based arrangements with pharmaceutical manufacturers, but significant barriers still exist. For example, the Medicaid 340 B program was constructed in a way that presents financial risk to these manufacturers, she explained, although recent government actions have aimed to address these hurdles.