Gene therapy is the latest high-cost challenge facing health plans and reinsurers alike. The need to understand issues associated with treatments, medical management, network management, and contracting will evolve and persist.
Take, for example, when organ transplantation networks first came on the scene. The high costs and intricacies of contracting for transplant services was confusing, but transplant networks met the need for a straightforward, cost-effective solution. In much the same way, the fast-changing landscape of gene therapy brings new challenges for the insurance industry. These therapies are high-cost, complex treatments that require specialized management and contracting. Costs for each treatment currently can range from $900,000 to $3.5 million. Also, it is important to recognize that few health plans have experience managing the rare conditions that gene therapy often treats.
Currently, there are five FDA-approved gene therapies. Luxturna® for the treatment of retinal dystrophy was the first approved gene therapy in December 2017. The newest gene therapy, as of November 2022 is Hemgenix®, for the treatment of hemophilia B. Additionally, the pipeline of gene therapies in clinical trials is overwhelming. Currently, there are nearly 1,000 active clinical trials investigating gene therapies in the United States. Of course, many of these gene therapies will not receive FDA approval, but if even a small percentage of them are approved, the implications could be substantial.
According to Dave McLean, CEO of Emerging Therapy Solutions® (ETS), they expect as many as four to seven new gene therapies to be approved in 2023. Further, McLean points out that this coming new volume of gene therapy treatments:
...can equate to real business risk in the form of unplanned and material per member per month (PMPM) increases with enormous overall financial impact to the health system. Looming decisions by the FDA on therapies for sickle cell anemia and hemophilia A are just two examples of where a new therapy could be approved mid-year and contribute to more than a $0.50 PMPM increase to premiums. Operationally, however, these therapies are too rare and too spread out for payers to build their own network and systems to effectively manage the cost.
To better understand how our healthcare clients are prepared to manage the financial and medical issues related to gene therapy, RGA’s ROSE Consulting Group conducted a client survey. The survey results showed that the majority of clients had little to no exposure to gene therapy claims to date, and some responded that their plans did not offer coverage. This is understandable as currently there are still a limited number of FDA-approved gene therapies, for diagnoses that are relatively rare. However, like the evolution of transplants, as gene therapy becomes more widely utilized, adequate preparation will be beneficial to the member, the health plan, and the plan’s ability to report to their reinsurer for proper disclosure and claim reimbursement.
Key findings from the ROSE survey include network management and financial related issues. Most responding health plans rely on their own networks to provide gene therapy services rather than utilizing a center of excellence network. The survey also identifies who within the health plan is notified of a pending gene therapy case: Finance is notified in 40% of the plans and network management in 20%. Clear communication with key internal stakeholders is a critical piece of effective complex care and case management.
From the medical management perspective, most plans require prior authorization for gene therapy. Medical directors and utilization management (UM) are frequently involved in the decision to approve treatment, but pharmacists and medical management are consulted by only 20% of participants. Most plans surveyed report that their medical management area follows the members’ care but only a few health plans have established protocols for consistency. General case managers (vs. case manager specialists) are often used by health plans for management of these patients. All participants noted a need for additional information on gene therapy. The most requested topics included treatments, medical/case management guidelines, side effects, and the pipeline of new treatments.
Best practices for complex medical care and management play a key role in managing new treatments. These include the following:
The promise of gene therapy offers great hope to improve health and extend lives, but the challenges of the high short-term cost of gene therapy will need to be managed so that health networks can continue to meet the needs of their patients. The importance of case management and education cannot be overstated when it comes to managing these new treatments.
This article was previously published by CMSA Today.
