Jeremy Schafer, director of Precision’s Payer Access Solutions, offers insights into combating the risk and exposures of gene therapy. While the outlook is promising for gene therapies, manufacturers face reimbursement challenges unique to the field. Jeremy Schafer helps explain these challenges and what could be done to help share the burden.

To read an excerpt of the article, please see below.

Gene Therapies Hold Promise, Challenging Payment Issues
January 2018

High Cost All at Once Is Challenging

This process, he tells AIS Health, “has not changed. What has changed, which brings this topic to a higher level of sensitivity, is the high cost burden these new medications represent. With the higher cost burden comes the higher cost-risk that must be borne by the provider stakeholders. In short, this is not a new situation, only an intensified situation where there is no quick and easy solution.”

According to Jeremy Schafer, senior vice president, director – payer access solutions at Precision for Value, “The adoption of gene therapies isn’t just complicated by price, but also by the fact that the cost comes all at once. Hospitals are not new to the idea of using drugs without product-specific codes—they do it all the time. If a hospital doesn’t get paid for one month of an oncology treatment, it may be out $10,000; but if it doesn’t get paid on a gene therapy, the loss could be $500,000 or more. These one-time payments create a level of exposure so high that  hospitals may not be willing to take it.”

Schafer tells AIS Health one option may be installment plans that expose hospitals to less risk. In addition, “Payers can do their part by releasing some form of coverage guidance soon after the product is released. The guidance should provide information on what uses are going to be covered and clearly describe the documentation that will be needed. That way, hospitals could proceed with therapy with at least some assurance of coverage.”

Wong points out that “the CAR-T therapies are a new class of medications. Payers may not completely understand the complete range of cost ramifications, e.g., pre-chemo, harvesting, reinfusion, hospitalization, potential adverse effects (Cytokine Releasing Syndrome), clinical benefit, nor the place in therapy these treatment options represent. Payers need to be educated on the overall process of the CAR-T treatment option.…Payers will also need to be educated on how to identify the appropriate population, as well as to provide assistance in the development of the utilization management criteria.

“In my mind,” he continues, “the biggest issue to deal with will not be the medical necessity of the treatment option, but rather the reimbursement for the treatment process, especially to an out-of-network provider. The national payers will more than likely have national network coverage; however, there will be issues with the regional players.”

“Early commercial success of the first gene therapies will be important to encourage more manufacturers to pursue these life-changing agents,” Schafer says. “In order for gene therapies to be successful, there needs to be uptake by health systems and coverage by payers. If these new payment models can spread risk in a way that is acceptable to all stakeholders, it may create a path forward for future gene therapies to be covered. There is likely to be a competitive advantage for manufacturers that are willing to be flexible in payment methods by speeding their product’s adoption over challengers.”

Contact Miller through Jennifer
Luddy at

Schafer via Tess
Rollano at and
Wong at

Article reprinted courtesy of AIS Health