Management Strategies for High-Cost Cellular and Gene Therapies

Sep 1, 2023

While gene and cell therapies (CGT) increasingly fill the drug pipeline, half of payers believe that the affordability of these treatments will be a major challenge in the next two to three years, according to a recent survey.

And, as these innovative therapies are introduced to treat conditions that affect larger populations, the significance of this issue is likely to grow.

For payers, tackling it will require new strategies to manage costs, which may include:

  • Stop-loss and reinsurance coverage. Stop-loss coverage shields self-insured employers against both individual catastrophic claims and overall risk. As an added layer of assurance, reinsurance providers offer protection to stop-loss and health insurance carriers.
  • Arrangements with vertically integrated healthcare organizations. Partnering with vertically integrated healthcare entities gives payers the opportunity to delegate coverage of catastrophic financial claims to larger organizations that may be better positioned to absorb the risk. It also allows them to leverage established provider networks to administer and support CGT.
  • Delegating to third-party consultants with standalone provider networks. Under this partnership, payers would gain access to third-party consultants’ guidance, forecasting, underwriting tools, and contracted provider networks. This type of arrangement may also facilitate value-based contracting with drug manufacturers.

There is no one-size-fits-all solution to skyrocketing prices, and each of these tactics pose opportunities and challenges. For example, coordinating data sharing among third parties and/or potentially needing to partner with a PBM that is owned by a competing health plan.

Whatever direction a payer decides to pursue, PBMs play a critical role in helping them implement the best possible strategies for their plans and members. And the ability to collaborate and operate with transparency will be key.

This blog was written by David Baker, Pharm.D., Director of Clinical Sales at Abarca as a summary of his session at the 2023 PBMI National Annual Conference. Download the full presentation.