"Sky-high" has almost become an exclusive adjective for gene therapy, and there is no most expensive, only more expensive. On August 17, 2022, the US FDA announced the approval of Zynteglo, a gene therapy developed by Bluebird, for the treatment of patients with β-thalassemia. Zynteglo is priced at $2.8 million, making it the most expensive therapy in the world at the time. On September 16 of that year, Skysona, another gene therapy of Bluebird, was approved by the FDA for the treatment of the rare neurological disease "brain adrenoleukodystrophy", priced at $3 million. Subsequently, the FDA approved the listing of Hemgenix, a gene therapy jointly developed by CSL and UniQure, for the treatment of hemophilia B. The price of one dose is $3.5 million, once again breaking the record of the world's most expensive drug.

Despite the potential to solve the problem once and for all, the high price has made it difficult for most gene therapies to be commercialized for more than 10 years. Glybera, the world's first approved AAV gene therapy, was launched in 2012 for the treatment of lipoprotein lipase deficiency. Due to its high price, one treatment costs $1 million, and its indications are rare. After its launch, only one patient was treated, and it was finally withdrawn from the market in 2017. Zynteglo has also encountered similar difficulties before. Before the FDA approval, Zynteglo was first approved for marketing in Europe. However, due to the high price of 1.575 million euros (about 12.1 million yuan). Faced with this high price, the German government was unwilling to pay the full price, and the upper limit was "half price". In the end, Bluebird decided to withdraw from Europe with Zynteglo and Skysona.

The SCD gene therapies Casgevy and Lyfgenia of Bluebird and Vertex/CRISPR mentioned above have also encountered commercial difficulties. In August of this year, more than six months after the approval of these two products, neither Vertex nor bluebird reported that patients had begun to use their respective SCD gene therapies for treatment. The reason is simple. The two gene therapies are priced at $2.2 million (Casgevy) and $3.1 million (Lyfgenia), which are also sky-high prices. The sickle cell disease (SCD) they target is a genetic blood disease that disproportionately affects black Americans.

According to the official website of the US CMS, there are about 100,000 Americans with sickle cell disease in the United States, and nearly half of them are enrolled in Medicaid, the so-called "medical insurance for the poor" of the US government. Data show that Medicaid covers about 50%-50% of sickle cell patients. Hospitalizations and other health events related to SCD impose a burden of nearly $300 million on the US health system each year. With the introduction of gene therapy, while bringing hope of treatment to patients, it also puts great pressure on Medicaid payments. Whether from the perspective of patients or medical insurance, this type of sky-high-priced therapy urgently needs innovation and breakthroughs in the payment system.

On January 30 this year, CMS announced that it would launch the CGT access model in response to the Biden administration's call to further reduce the cost of prescription drugs. Bluebird, Vertex/CRISPR's SCD gene therapy is the first product to be piloted in this model to explore new payment methods for cell gene therapy, improve accessibility, and reduce the burden of medical insurance. Since sickle cell disease patients must rely on payers for payment, it is difficult to gain negotiation advantages in price by relying solely on the user volume of each state. For this reason, CMS hopes to reduce prices through payment by efficacy and volume-based procurement of federal insurance.

According to CMS, this plan is to pay manufacturers through outcome-based agreements (OBAs), and the payment amount is linked to the patient's health outcomes over a certain period of time. At the same time, CMS also hopes to link it to drug sales. There are three core points: Under this model, if the success rate of gene therapy in improving health outcomes in the long term is lower than expected, drug manufacturers will refund part of the treatment costs to medical payers. The agreement will also include other price concessions, such as volume-based rebates or guaranteed rebates. CMS will negotiate with manufacturers on behalf of the states for cell and gene therapies for beneficiaries with Medicaid as the main payer. The model allows CMS to bring states together for negotiations on a multi-state basis, rather than each state establishing its own OBA with the manufacturer. CMS will also be responsible for establishing financial and clinical outcome measures, coordinating data, and evaluating results. States will still be responsible for paying for cell and gene therapies, but price rebates will be determined based on specific results of CMS negotiations. These combination models can not only reduce the economic risks of patients and insurance providers, but also incentivize pharmaceutical companies and healthcare providers to continuously optimize and improve treatment options.

At the same time, CMS also stated that as the effects become apparent, this payment model will be adopted for more cell gene therapy drugs in the future. At the beginning of the year, CMS stated that it would work with participating states and drug manufacturers in the next year to establish a framework to increase the accessibility of SCD gene therapy. After 10 months of hard work, on December 4, CMS finally announced that Bluebird and Vertex/CRISPR had reached an agreement with it to participate in this pilot model. CMS will officially launch the new payment model in January 2025, and individual states can also choose to participate in the arrangement. Obviously, the success or failure of this test field will directly affect the future commercial value of these sky-high drugs.

At present, the domestic solution to sky-high therapies is to increase the amount of commercial insurance. For example, although high-priced therapies such as CAR-T can enter the preliminary review catalog, it is difficult to pass the pharmacoeconomic evaluation. Considering the reality of the tight balance of medical insurance funds, especially under the current severe situation of population aging, the long-term pressure on the fund is increasing. In this case, it is not enough to rely on medical insurance alone to further encourage the development of innovative drugs. For the industry, if the payment problem cannot be solved, innovative drugs will not be able to obtain income that can feed back to research and development from the commercialization link, and a real virtuous circle cannot be achieved. In this regard, the industry will place more hope on commercial insurance.

In 2022, commercial health insurance premium income will account for 10.2% of total health expenses, while expenditure will account for only 4.2% of total health expenses. In terms of insurance depth and density, the development level of domestic commercial health insurance is still insufficient compared with overseas. The development level of domestic commercial health insurance is low, and one of the key factors is the lack of connectivity of data resources. The comprehensive health information of the population is mainly in the hands of medical insurance and public hospitals, and commercial health insurance companies cannot obtain it. Therefore, the designed health insurance products cannot be accurately and reasonably priced and set benefits.

Since September, there have been frequent catalytic events about commercial health insurance in the industry, with the participation of the Medical Insurance Bureau, the insurance industry, and medical institutions. The common point of these events is that they revolve around the sharing and interaction of information data, as well as implementation practices. Under the catalysis of various policies and events, one of the core bottlenecks in the development of commercial health insurance is expected to be solved. In any case, commercial health insurance is likely to bring a certain amount of payment increase.

Wang Guodong, deputy director of the Medical Insurance Center of the Medical Insurance Bureau, also said at the press conference that with the rapid development of medical technology, some expensive cell therapy and gene therapy drugs have been launched one after another, which is difficult to fully support by the basic medical insurance system alone. The National Medical Insurance Bureau is focusing on building a "1+3+N" multi-level medical security system to expand the development space for innovative drugs and better meet the people's multi-level medical security needs. Next, it will be a general trend to promote the effective connection between commercial health insurance and basic medical insurance.

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