This white paper summarizes key points from a virtual roundtable that current members of Oliver Wyman's Health & Life Sciences practice held in Q4 2021. The roundtable included over 20 participants with from industry, payers and solution providers, and is the third roundtable in a series of annual roundtables on cell and gene therapies (CGTs).
Cell and gene therapies hold tremendous promise for patients and for health systems and we have seen a few launches over the past year, especially in oncological conditions. Cell and gene therapies come to the market with limited data and a promise for future accrual of health benefit (often termed as “cure” or “long term transformation”). Payers and health systems are not aligned on how they are assessing value for these one-time therapies, and most CGT launches have required contracting and often strong discounting to ensure access. The past year has also seen setbacks, through delays to market and most notably the lack of European launch for Zynteglo.
While some uncertainty is expected due to the novel treatment modality, there is an underlying dynamic in relation to the high cost, perceived value and lack of health system readiness to absorb innovation that will come to the fore with upcoming launches. This is likely to be exacerbated where there are limited upfront direct cost offsets from a payer perspective, as is the case for treatments used in the last line of management or indeed in many rare diseases.
INNOVATIVE CONTRACTING IS A CRITICAL LEVER FOR THE FUTURE
The ongoing debates within industry and in health systems reflect an understanding of the unique challenges of CGTs as a treatment modality and go-to-market considerations. There is also an increasing recognition that such therapies will require and are most suitable for newer contracting approaches, especially outcomes-based agreements that enable industry to be rewarded for innovation whilst managing payers’ concerns on clinical effectiveness uncertainty.
Work undertaken by the US based MIT NEWDIGS FoCUS group has previously highlighted a high level of concern among payers regarding the management of the financial risk and impact of high-cost durable therapies, with a recent survey capturing the different financial contracting solutions being explored such as reinsurance/stop loss, financial and warranty services. Similarly, there's been an evolution of some European systems to undertake annuity approaches over multiple years, including outcome-based components. However, there is also a recognition that approaches we are experimenting with today may not be appropriate or ready for the future volume of CGTs, for example continuing to build off existing data systems will lead to further fragmentation of data or that insurance premiums may continue to increase with number of CGTs. Alternative views reflect the lack of a burning platform and concerns that systems will be ready to adapt when this becomes more critical, especially given the pandemic centric disruption today.
Nevertheless, there is general consensus that taking a passive approach towards therapies with such strong transformative potential can not only be damaging towards patients but can also push back the investment being poured into this area. Industry has made significant investments to support cell/gene therapy innovation and seeing that translate into appropriate pricing and patient access at scale is key, otherwise the future of CGT therapy could be adversely impacted. With a projected 60 cell and gene therapies being on the market by the end of this decade, the true test of scale and viability for enabling patient access to cell/gene therapies is yet to come and we need to be ready for it.
BUILDING FOR A SCALABLE APPROACH TO OUTCOMES-BASED AGREEMENTS
Historically, health systems have shown predominant interest in undertaking financial contracting arrangements without a performance or outcomes-based dimension, and have largely been effective in implementing these across therapy areas. However, use of outcomes-based agreements remains fragmented and variable, and scaling these for CGTs will require deliberate and considered planning and alignment across stakeholders. Challenges for scaling outcomes contracting for CGTs overlap with those facing other therapy areas, such as how to measure and capture performance in the real world, but equally face some distinct dynamics such as the length of follow-up required.
The roundtable discussion highlighted two core areas where industry and system stakeholders need to work together to build a sustainable ecosystem: Building the appropriate data infrastructure and creating incentives and mechanisms to support implementation.
SOLVE COLLECTIVELY FOR DATA INFRASTRUCTURE
A key challenge towards successfully implementing outcomes-based agreements is the data infrastructure needed to collect evidence on patient outcomes in the real world. Current data infrastructure is fragmented with data sitting across different systems (inpatient and outpatient EHRs, registries, patient apps etc period) that are often siloed, proprietary and lack interoperability. In addition, existing systems contain incomplete or poor quality data given the administrative burden of data input in most cases. There is a need to develop a system that connects the dots across multiple parties and provides good patient data sets within a given disease area.
Industry leaders and healthcare system stakeholders at the roundtable shared a strong desire for collaboration in developing strong real world-data infrastructure as key for unlocking the potential for outcomes-based agreements and gaining valuable insights into patient outcomes. Cell and gene therapy developers would then compete on the strength of their products.
A relevant parallel here is seen in the electric vehicles industry where developing charging infrastructure around the globe as seen as necessary to enable all developers to benefit and scale the technology.
An EU based public private partnership has sought to create a pilot model that reflects some of these principles. It is focused on creating a patient centric and trust-based approach with a robust data infrastructure model. While not focused on cell/gene therapies, this model could be considered as a starting point for a potential approach.
Open questions:
- What diseases are suitable for piloting collaboration?
- How do we build platforms/approaches that work across diseases?
- How do we build solutions that can be used across payer types?
CREATE SUPPORTIVE ECOSYSTEM AND INCENTIVES
While data infrastructure is a key enabler, implementation and execution of outcomes contracting will require us to think about supporting the underlying systems with the right models.
Data collection, handling and management is an underserved area where current organizations that collect most of this data (i.e. hospitals, clinics, pharmacies) do not have the time nor do they see it a priority that immediately impacts them. This will be particularly important where data is required to be collected by a provider that has not been involved in the treatment delivery, or those providers without the appropriate capabilities. Providers need to be incentivised financially and/or through formal care arrangements. Beyond these sites, there is an additional consideration of how we incentivize the patient to report on their outcomes in order to get the data. The engagement of the patient is the best way to get them to report data, and particularly important for long term follow-up.
In addition, there is a need to define a multi-stakeholder governance model that ensures a representative set of stakeholders (e.g. private industry, HCPs, patient organisations, payers) have oversight of data infrastructure and systems created for the purpose of driving outcomes collection. This will reinforce the trust element and drive adoption and uptake.
Finally, there is a recognition that solutions are not always sustainable and either get discontinued or aren’t scalable. In this context, it is important to consider the sustainability of funding for data collection as well as use of third-party solution providers to ensure longevity, both on data collection as well as financial instruments to support CGTs. Certain third-party solution providers Lyfegen and August are already paving the way, and seeking to move execution forward to address the gaps today.
Open questions:
- What are the right types of incentives for providers and payers to be engaged?
- What is the scope for integrating approaches for regulatory and payer driven data collection?
A FINAL THOUGHT
The roundtable conversation reflected that there is strong receptivity and interest across stakeholders and the first step needs to be taken to collaborate for mid-long term impact.
However, short-term impact can still be delivered through being brave, seeking to experiment and learn, and keeping a collaborative and engagement mindset between stakeholders.
