Joe DePinto, Head of Cell, Gene, and Advanced Therapies at McKesson, discusses the evolution and challenges of payment models in the cell and gene therapy (CGT) space reviewed during his session at Asembia 2024.

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Joe DePinto: Hi, my name is Joe DePinto. I am the Head of Cell and Gene Advanced Therapies at McKesson. I've been in the industry for 30 years. I've had a variety of roles in large multinational [and] small biotech and technology companies and services and solutions [with] companies ranging from clinical development to commercialization. And I've focused much of my career on bringing innovative products to patients. So that's what excites me.

Could you share some insights or key takeaways from your recent Asembia session regarding payment models for CGT? Were there any particularly surprising findings or developments discussed that specifically impact payers, employers, and patient cost concerns?

Joe DePinto: So, it was a great assembly of this year. They celebrated their 20th anniversary, which is amazing leadership in the space.

And we've watched this convention grow significantly. Our topic really focused on innovative payment models. We started the meeting and the panel by really focusing on cell and gene therapy being the next wave of innovation clinically.

We also discussed some of the barriers and challenges for adoption in cell and gene therapy. We talked about some of the challenges in the value chain in delivery of these unique products. We talked about some of the cost density and complexity challenges.

We then talked about the fragmented health care system and how patients have to navigate that fragmented health care system to get access to these groundbreaking drugs, we also talked about multiple innovative payment models that are available for biopharma providers, payers, and employers alike to take advantage of so that these patients can have access to them. We dug deep into payment models because it's impossible in a 40-minute panel to discuss them all. And we really dug deep into warranties.

We talked a lot about how warranties can play a role in cell and gene therapy and advanced therapies being delivered to patients.

What are some of the common barriers patients encounter when they try to get access to these specific therapies?

Joe DePinto: The beauty of cell and gene therapy is the science is so groundbreaking complex. And if you've seen one cell or gene therapy, they all tend to be a bit different. It's a very heterogeneous population. So, what happens is the value chain needs to be focused on the precision medicine that's being delivered. And there tends to be different barriers in the value chain along the way that could inhibit patient access. One of the things we focus on in our strategy at McKesson is how we alleviate those barriers to access and what services and solutions we can provide to three key stakeholders: biopharma, providers, and payers. How can we ensure that those barriers navigate our health care system efficiently so that patients can have access? It can range from manufacturing challenges to benefit verification challenges to distribution and logistics challenges, all the way to clinical and commercial services challenges. So, they vary widely.

Cell is different than gene and within cell and gene, based on how these different therapeutic areas and products get segmented. So it's not one specific answer to that question, it's multifactorial, but we're excited at McKesson to help solve those access challenges.

How can providers utilize CGT clinical trials as a means to educate and raise awareness among patients, thereby facilitating access to innovative medicines?

Joe DePinto: So, the excitement in the space for cell and gene therapy is that we're a bit of a tipping point. You're seeing so many of the clinical trials moving to pivotal studies. And from there, they're going over to commercial.

The US FDA in 2019 predicted that by [the] 2024/2025 time period, we would have 10 to 20 a year. So, last year we had 10 approvals. This year we're well on our way to 10 to 15 approvals.

So, we're at a bit of a hockey stick where what we're seeing is we're moving from clinical development to commercial development. And those same sites, those providers, are doing clinical trials and commercialization work as well for the branded products that have received regulatory approval.

So, the challenges tend to be a bit different clinically than commercially. One of the things we did here at McKesson in our Cell and Genie Advanced Therapy Group is we developed our strategy to be provider aligned. What I mean by that is we went out and got a lot of feedback from the providers: how do we have this precision type medicine scale in a democratized or industrialized fashion for delivery of the product? And that's not an easy feat, but that feedback we receive from the providers helps to guide our strategy and how we help the biopharma companies make sure their products get to the right patient.

Do you view manufacturers offering copay cards as a solution to access problems, or is it merely a temporary fix, considering the importance of collaboration among various stakeholders?

Joe DePinto: There's going to need to be a series of like-minded companies working together to help solve some of these challenges.

Some of the tactics you just talked about are great opportunities that should be explored. Whether it's [a] copay card or financial assistance—all those are tactics or vehicles that we should be exploring, and it's not one size fits all. Based on the therapeutic area, based on the type of product, is it inpatient? Is it outpatient? How is it going to be billed? What's the payer mix? All our components that need to be examined as the biopharma companies think about the patient journey, the product journey, and the financial flow or the reimbursement journey that's occurring.

I like to think of it almost sometimes as a bit of a complex sort of chess game, right? It's like a three-dimensional chess game that you have to play, so that way you're leveraging the core components of those 3 journeys.

Can you highlight the innovative payment model you discussed at Asembia?

Joe DePinto: To start, we took a look at a variety of payment models. We outlined just to state a few. So, when products in the cell and gene space typically get approval, you'll see a press release announcing the approval and the excitement from the company launching the product that their product has navigated the regulatory system, and they have a positive opinion, and they will be now having this product available for patients commercially. And in the past, some of these long-term, and these press releases, have also come accompanied with some verbiage around innovative payment models that will ease access.

And some of these models that we've seen in the past, and this is not in its entirety, [but] it's not meant to be comprehensive, [with] things like value-based agreements, outcomes-based agreements, annuities, subscription agreements, and even warranties. What we looked at the panel was breaking it up in value-based agreements and outcomes-based agreements, [which] are based on the ability to see at a particular outcome.

So, how do we value that outcome and how do we pay for that outcome? And how do we re-numerate if the outcome isn't achieved? On annuities and subscription, that's really solving as well for the same issue, which is durability of response for these products. So, the annuity and subscriptions are sort of pay as you go. And warranties are a reinsurance program that you're reinsuring for the delivery of the product outcome. Now, this all goes with the backdrop of typically cell and gene therapies are delivered at one time and the price of that product is paid at that, the cost is paid at that one time. It's called cost density, where that cost is absorbed at the time that the product is given, but the value is seen over an elongated period of time, which is counter to how our payer system and our health care system is sort of set up. So, what these different innovative payment models is doing in my estimation is it's really solving for the durability of response over time because of the cost density issue.

The innovative payment model you mentioned ensures upfront coverage, potentially granting patients more immediate access to care and saving cost in the long run. Is that accurate?

Joe DePinto: Yeah, I think you're spot on. I look at it as a total cost of care analysis. You give a product at point A, the value is seen over a period of extended time, but there's health care costs that occur. They're both fixed and variable. And what happens is less hospitalization, less medication in the future, less doctor visits, and patients live a longer, more durable, more quality of life in some of these populations. Now, highly dependent on the type of product. What we're seeing is some of the cell and gene therapies are given in pediatric populations. Some are given in adult populations. So, we have seen a lot of activity in the rare, ultrarare, and orphan area for cell and gene.

We've also seen it in hematologic malignancies and non-hematologic malignancies, [eg] later stage products. But now the clinical data [is] starting to evolve where products and patients that are earlier in lines of therapy are starting to get access.

And with the clinical trial work in autoimmune disease, we're starting to look at some larger patient populations.

Do you feel that payers may need to reevaluate patient population criteria in order to help with access issues and medication adherence issues for patients with these diseases?

Joe DePinto: Tough question, and I will say this—with all of the clinical trials in place in cell and gene therapy, when you have patient populations that don't fit the specific indication of approved products, exploring those clinical trials is really important. That specific disease area you talked about is being studied in cell and gene therapy. So, having advocates along the way to help the patient navigate access to clinical trials is really important. There are hundreds, if not thousands, of clinical trials out there, and some may be a fit for that particular patient population. And the regulatory authorities are approving these cell and gene therapies for a specific product label that has had rigorous clinical trial work and a pivotal trial. Now, many of these are approved before phase three. They're accelerated reviews and high medical unmet need, so a variety of different mechanisms are followed through the regulatory pathway.

However, I will say that the commercial product that these patients get is typically for the specific indication that was approved. The payers will focus on those approved indications, but that's not to say for the patients who don't particularly fit that indication that they don't have options to explore in the clinical trial room because there is a lot, I mean a real lot of clinical trial activity. And listen, biopharma companies, large, mid, and small, are studying cell and gene therapies in a variety of different therapeutic areas. So, an extensive search of clinical trials would be a good thing for those patients who don't specifically fit into the regulatory approved label for those products.

How have environmental factors, particularly in rural communities and concerning social determinants of health (SDOH), affected patients’ access to CGT?

Joe DePinto: When we think about where cell and gene therapies are delivered commercially currently, it tends to be at sort of the academic centers.

It can be anywhere from 250 to 354 hundred sites across the United States. But because of the excess amount of clinical trial work and all these commercial products launching, we're starting to see a bit of migration of sites being now brought on board as qualified treatment centers that are community-based hospitals. They could be perhaps part of an academic network, and really expanding that because obviously we want to try to get treatment of these patients as close to home as possible.

That's optimal, right? And we want patients to have therapeutic choices that don't entail a 50-, 60-, 100-mile travel or an extended period of time. So, we're starting to see that, but it's still [the] early days. The market is still nascent in cell and gene. And to deliver these products, you just can't do it just anywhere. It's part of, especially in the autologous setting, the CGMP process starts with the patient at the hospital. So, these centers have to be qualified to deliver these products by the biopharma companies.

But we're starting to see that migration. I think it's a variety of things. I think one is we want to make biopharma wants to make sure their products are available closer to the patient population for all those issues that you had mentioned.

And secondly, I believe that because of all the clinical work and the commercial evolution, there's just not enough treatment sites and centers that are available right now. And the market is exciting and expanding. So, I think it's multifactorial the reasons for this migration, but I only see this accelerating as cell and gene therapies get approved.

Do you believe expanding the roles of pharmacists could facilitate easier access to CGT to patients in rural areas, considering the accelerated efforts to expand access to care and health care facilities in these regions?

Joe DePinto: I think cell and gene therapy is delivered through a treatment team, a multidisciplinary treatment team. I think there are a variety of stakeholders in the institutions that get engaged in the delivery of cell and gene because of the complexity of it. Again, a gene therapy acts differently than a cell therapy, an autologous cell therapy acts differently than an allogeneic cell therapy. In vivo or ex vivo gene therapies act differently as well. It's highly dependent upon the type of product and the disease area.

But the common in the space now is these multidisciplinary teams treating these patients. And some products are given inpatient, some products are given outpatient. So that, as well, but the evolution of the science here is tremendous. The outcomes are second to none, [based on] what we've seen. I mean, very exciting clinical outcomes.

The key will be how does this continue to evolve and how as a treatment team, do we help the providers make sure that there's a standard way to deliver as much as possible of these unique products?

What is one key takeaway you hope the Asembia audience walked away with after attending your session?

Joe DePinto: We talked a lot about warranties, and we dug deep into the use of warranties.

Warranties are used in a lot of different areas in the United States and looking at warranties as a vehicle for biofuels, as well as payers, to take advantage of in this space. Because of the cost density issue, because of the outcomes in solving for durability over time, warranties and reinsurance can be a vehicle that's typically underused but starting to gain some traction in the space. And those warranties are something that have some benefits from a best price and CMS 2020 has even laid out some rules and responsibilities that can help guide biopharma payers.

And ultimately the employers want to make sure that their employees have the best health care, right? [They want] the most economical health care for them, and using a warranty may help solve for that lack of response durably over an extended period of time.

So, we explored it very carefully. We looked at how do you design a warranty. How do you develop a warranty? How do you track the outcomes of a warranty? We explored all those key vehicles from Octavia Financial and Marsh, which are best in class sort of companies that work in this space. So, I was really pleased by the interaction at the panel and afterwards many people came up asking for additional follow-up questions.

Warranties are new. We have to explore all the new vehicles so that way we can make sure that we're using all the new vehicles. We really need to look at using everything we can to make sure patients get access.