Next Generation Therapies: Access, Pricing, and Challenges

2018 was a watershed year for medicine, showing us the transformative and curative future for biopharmaceuticals:

• The first patient was treated with an approved gene therapy
• The first therapy based on gene suppression (RNA interference) was approved
• Hospitals in Europe and the U.S. administered newly approved chimeric antigen receptor T-cell (CAR-T) therapies for the first time

Next Generation Therapies (NGTs) currently in development will deliver treatments that address the underlying cause of diseases, disrupt the biopharmaceutical environment, and offer a life-long solution to patients.

What Qualifies as an NGT?

NGTs is a term for a range of new, leading-edge therapies that:

• Expand science
  NGTs employ an expanding number of scientific approaches to diagnose and treat disease, including gene therapy, cell therapy, RNA therapy, immunotherapy, and hybrids of these therapeutic models
• Meet the significant unmet need
  NGTs have secured approval by the EMA and/or FDA to meet significant unmet medical needs or promise significant improvement in patient health over current standards of care
• Gain expedited market access
  NGTs are often approved through the FDA’s Breakthrough Therapy, EMA Prime Review, Rare Disease, and other priority review pathways—often after expedited reviews and clinical trials based on surrogate endpoints

Overview of Next Generation Therapies (NGTs)

Challenges Related to NGTs

This surge of new therapies creates unprecedented opportunities for patients and will be measurable in lives saved, disabilities reduced, and overall quality of life improvements.  And, along with these benefits come unprecedented challenges for insurance coverage, reimbursement, and payment.

These new therapies are expected to create major challenges for healthcare, including:

• Timely patient access to treatment
• Overall treatment costs, including patient initiation and adherence support
• Spending that supports sustainable health coverage for all patients
• Continued biopharmaceuticals innovation

Governments, health insurers, and other healthcare payers have historically relied on volume-based discounts, hidden discounts/rebates, and price/volume agreements as their primary tools for managing or containing pharmaceutical costs. But these approaches have real limitations when applied to the new wave of highly innovative pharmaceuticals.

What’s Next for NGTs?

What can the industry do right now to embrace the arrival of therapies that can benefit patients in such an unprecedented manner?

First, biopharmaceutical organizations, providers, payers, and patient communities must share information about NGTs in development.

Early information sharing reduces the chance that payers and providers are caught unaware of new therapies that could impact yearly health care budgets and insurance rates. Information sharing will also help payers and providers:

• Gauge the impact of NGTs on patient utilization and costs as access and availability grows over time
• Increase the likelihood for more competitive therapeutic options
• Ensure availability of new diagnostics or advanced analytics in “the right therapy for the right patient, at the right time” way

Information sharing may also encourage the development of alternative policies on coverage and payment.

Second, stakeholder collaboration around shared principles for affordable patient access at a manageable cost to the healthcare system—while sustaining continued innovation—is essential. These fundamental principles should include:

1. Linking payment for next generation therapies to a demonstration of durable health outcomes in real-world medical practice
2. Expanding available reimbursement options for physician administered drugs, including:
   1. Innovative access, payment, and pricing models
   2. A commensurate commitment to models of fair provider reimbursement for the administration of new and complex therapies
3. Collaboration across sectors to standardize and harmonize novel contract models to cut the complexity, time, and contract execution expenses
4. Measuring the “all in” costs and benefits of NGTs, including—if possible—payment and finance models. The highest and best use of NGTs may not be achieved within standard, one-year budgets supporting one-year insurance enrollments. These therapies may create medical spending offsets realized over a period of years, and they may also trigger new and ongoing medical costs. And they may create social benefits, such as reducing the patient’s need for social services. This raises the question of whether health insurance programs should bear the total responsibility for covering treatment or whether government or other, non-insurance sources should share the cost.
5. New engagement on innovations in reinsurance and risk adjustment so payers have a level competitive playing field that accommodates affordable coverage of NGTs.

Learn more about NGTs, from concept through commercialization, and how our GMA experts can help.