The PharmaLifeSciences 2024 summit highlighted the reimbursement barriers to cell and gene therapies and discussed policy reforms to ensure patient access and sustainability.
Cell and gene therapies are transforming healthcare, offering groundbreaking treatments for conditions like cancer, genetic disorders and autoimmune diseases. Their potential to provide durable, one-time cures is unprecedented, but the high cost and complex nature of these therapies create significant challenges for reimbursement and patient access.
"The financial considerations for cell and gene therapies are not theoretical or a future state," Stanford said. "They're real headwinds that vulnerable patients and providers are experiencing in real time. The concerns we're addressing are tied to specific patients seeking relief, and it's important for us to ensure that our thought process is benchmarked with the end goal of generating progress and access for these patients."
Current reimbursement realities
One key issue in the current reimbursement landscape is the misalignment between existing Medicare and Medicaid reimbursement frameworks and the high-cost, one-time nature of CGTs. This misalignment can result in financial losses for hospitals, coverage gaps, and administrative barriers that delay patient access.
Misaligned inpatient and outpatient reimbursement models
Stanford outlined how inpatient therapies, such as CAR-T cell treatments, are currently bundled into the Medicare Severity-Diagnosis Related Group (MS-DRG) system under code 018, which encompasses a variety of T-cell immunotherapies. However, this DRG often fails to cover the actual costs of administering these therapies.
"When the first CAR-T launched in 2017, they were mapped to the bone marrow transplant DRG 016, which was being reimbursed at just over $40,000," she explained. "As a result, reimbursement fell significantly short of the treatment cost for Medicare fee-for-service patients, making it difficult for hospitals to onboard these therapies."
The situation has improved somewhat since CMS created the new DRG 018 in 2020, but the payment -- currently set at approximately $257,958 -- still doesn't reflect the full economic burden associated with CGT administration, especially when the costs of post-treatment care and other related services are considered.
"The ambiguity in CMS's definition of 'immunotherapy' for mapping purposes has also introduced controversy over which therapies qualify, further complicating reimbursement," Stanford added.
Administrative barriers and delayed access for Medicaid patients
Medicaid, which covers a disproportionate number of patients with rare diseases, faces its own unique set of challenges when it comes to CGT reimbursement. Stanford emphasized that states often lack formal coverage policies for new CGTs at launch, resulting in delayed patient access while state agencies determine appropriate coverage criteria.
"States often don't have formal coverage policies for cell and gene therapies when they first become commercially available, and it can take 6-18 months for them to develop these policies," Stanford noted. "This is problematic because these therapies are often indicated for very young patients with rare conditions who may not have the time to wait."
Additionally, cross-border credentialing issues arise when patients need to travel out of state to receive CGTs at specialized treatment centers. Providers must enroll and be credentialed by the patient's home state Medicaid program, creating a lengthy and complex process that can prevent timely treatment.
Value-based payment models
Value-based payment (VBP) models are gaining traction as a potential solution to balance the high upfront costs of CGTs with the need for long-term cost sustainability. Under VBP arrangements, manufacturers and payers agree to link reimbursement to a therapy's real-world performance. If the therapy does not meet specific clinical benchmarks, manufacturers might be required to provide rebates or other financial concessions.
"VBPs allow payers to recoup costs if products do not meet expected outcomes for patients," Stanford explained. "However, the current system was not designed for these types of arrangements or one-time administered durable therapies."
She pointed to Bluebird bio's agreement with Michigan's Medicaid program as a prime example of how VBPs can be structured to align reimbursement with outcomes. Under the agreement, Bluebird bio's sickle cell gene therapy, Lyfgenia, is reimbursed based on the therapy's ability to prevent painful vaso-occlusive episodes over a three-year period.
However, implementing VBP agreements is complex. They require robust data infrastructure, clear contractual terms, and compliance with existing regulations, such as Medicaid's "best price" rule. The Medicaid Value-Based Payment (MVP) Act was introduced to provide a framework for VBPs by clarifying how multiple prices can be reported under a VBP arrangement without violating the Anti-Kickback Statute.
"The rise in value-based payment models and the robust pipeline of CGTs demand that our federal healthcare laws keep pace," Stanford explained.
What's next for cell and gene therapies?
The CGT pipeline is expanding beyond traditional indications, such as hematologic cancers, to include solid tumors, autoimmune conditions and rare genetic disorders. The future success of CGTs will depend heavily on whether payers can adapt their reimbursement models to reflect the diversity and complexity of these new therapies.
Stanford outlined several upcoming therapies expected to launch between 2024 and 2026, including CAR-T therapies for solid tumors, gene therapies for Parkinson's disorder and cell therapies for autoimmune diseases, such as lupus.
The path forward requires a coordinated effort to modernize existing frameworks. Ensuring that patients receive timely access to these therapies will depend on our ability to advocate for policies that align value and sustainability.
Monet Stanford, PharmDDirector of access and reimbursement policy, Alliance for Regenerative Medicine
"The industry has rallied around autoimmune conditions as the next frontier for cell therapies," she noted. "Most of the focus for gene therapy has been on rare pediatric diseases, but we're looking at expanding indications to include conditions like type 1 diabetes and even some neurodegenerative diseases."
Proposed policy reforms and legislative efforts
Several legislative efforts were discussed at the summit to address the unique reimbursement challenges faced by CGTs:
The MVP Act. This act aims to codify Medicaid's best-price rule to support the use of multiple prices for VBP arrangements, providing developers with greater flexibility when reporting prices for VBPs and traditional pricing models.
Accelerating Kids' Access to Care Act. This proposal would streamline the credentialing process for out-of-state providers, allowing them to treat Medicaid patients without undergoing repeated screening in each state.
Patient Access Act. This act seeks to establish safe harbor protections for companies providing travel and lodging assistance to Medicaid beneficiaries who must travel out of state to receive CGT treatments.
"Each of these legislative efforts is a step forward in ensuring that patients can access transformative therapies without being burdened by financial or administrative barriers," Stanford emphasized.
The reimbursement landscape for cell and gene therapies is at a critical juncture. As more CGTs receive FDA approval, healthcare stakeholders -- including payers, providers, and policymakers -- must work together to create flexible, patient-centric reimbursement models that can accommodate the unique complexities of these therapies.
"The path forward requires a coordinated effort to modernize existing frameworks. Ensuring that patients receive timely access to these therapies will depend on our ability to advocate for policies that align value and sustainability," Stanford concluded.
Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.
