CVS Health Publishes Methods to Reduce Gene Therapy Costs

According to CVS Health, extending the National Medical Excellence (NME) program model, evolving the role of specialty pharmacy, value-based contracting, and financial protection programs are key approaches to reducing the cost impact of gene therapies.

“Along with the promise of a potential cure that gene therapies offer, come unprecedented costs,” researchers stated in the white paper, Gene Therapy: Keeping Costs from Negating Its Unprecedented Potential, published recently by CVS Health.

In the white paper, the company stated that its role, and health insurer Aetna’s role, is “reduce the costs of therapy, while ensuring appropriate utilization of cutting-edge therapies.”

The first approach the white paper suggests to reduce the cost impact lies in extending the NME model so that patients who qualify for gene therapy develop deeper connections with the centers and providers. These strengthened relationships will allow better collaboration, for example, between transplant centers and health plan representatives.

Specialty pharmacy has a significant role to play in cost reduction if they are able to purchase gene therapies directly from the manufacturer. The white paper explains that, “Currently, many hospitals and physician offices mark up the cost of a drug even higher than the stated wholesale acquisition cost, after purchasing, and before administering it. If manufacturers were to not provide access to specialty pharmacies, the risk of mark-ups through buy-and-bill is much greater.”

CVS Health suggested that pharmacy benefit managers, like CVS Caremark, could implement pay-over-time plans that will lower costs for payers by allowing employer groups to pay out for medication over several years.

Thirdly, value-based contracting is a constant driver in health care today and the suggestion that it has role in lowering the cost impact of gene therapies is no surprise. CVS Health pointed out, “Even though manufacturers appear to have confidence in their therapies, value-based contracts, which refund a portion of the cost of the therapy if the patient fails to achieve and sustain an expected clinical response, help tie reimbursement to the expected outcome.”

A financial protection program where the actuarial risk for gene therapies is spread across a pool of members is the white paper’s fourth suggestion to mitigate the cost impact for payers and patients.

“For smaller employers with self-insured plans, a single patient needing a gene therapy—even one priced at $1 million, half of the most expensive gene therapy current available—could pose an actuarial risk,” according to the white paper, “For a 2000-employee client, the impact could represent a substantial increase in total cost.”

If stop loss policies were adopted by a large number of clients, CVS said, “it would have a predictable reasonable fixed cost, making it possible for payers to continue offering coverage for gene therapies while ensuring the financial viability of their benefit plan.”

CVS Health emphasized the importance of finding ways to lower costs while maintaining quality access. “Without solutions to help payers manage the cost, some may make the choice to exclude coverage, which could jeopardize patient access to these potentially lifesaving medications.” —Edan Stanley