Health Plans Brace For Cell And Gene Therapy Costs

Cell and gene therapies are breaking ground as life-saving treatments, but their six- and seven-figure price tags are an increasing worry for employers and healths, according to a new analysis.

More than 70% of employers and health plans expect affordability of gene therapy for their health plan members and workers will be a “moderate or major challenge” over the next 2 to 3 years, according to a report released Monday at Asembia ASX25 in Las Vegas by Pharmaceutical Strategies Group (PSG). The analysis was based on responses from more than 230 health benefits executives from health plans, employers and unions.

The report comes with up to a dozen new cell and gene therapies expected to launch on the U.S. market this year, PSG’s report said. Such therapies, which can “prevent or treat a disease by adding, replacing, or turning off genes,” come with high prices such as $475,000 for a treatment for acute lymphoblastic leukemia or more than $3 million for a treatment for hemophilia B.

Yet despite the headline-grabbing costs of some of these new treatments, those picking up the tab for the bulk of the costs aren’t prepared for potential expenses to their budgets for healthcare.

Even though 73% of plans expect cell and gene therapies to “pose a moderate or major financial challenge in the next 2–3 years, most express low confidence in their understanding of the financial impact,” PSG said in a statement accompanying its report. “What’s more, nearly 40% don’t currently use any financial protection product to manage their financial risk related to cell and gene therapies.”

“These therapies aren’t one-size-fits-all,” said Renee Rayburg, vice president of clinical strategy at PSG. “Not only do gene therapies present financial challenges, they’re also complex in terms of which patients are eligible as well as the treatment process, and demand is higher for some gene therapies than others. Payers need expert analysis that considers their population, pipeline exposure, and vendor ecosystem.”

Specialty drugs already account for well more than half of the total prescription spending any health plan, employer or government health program manages. Employer clients tell benefits consultants specialty costs easily account for 60% or more of their total drug spending, particularly as more Americans flock to anti-obesity GLP-1 medicines, prescriptions hailed for their ability to help people lose weight.

But the PSG report says employers are increasingly finding ways to deal with specialty drugs.

Take Humira, for example, an expensive rheumatoid arthritis drug derived from biotechnology that at its peak generated more than $20 billion in annual sales as the world’s top selling drug for its maker, Abbvie. Humira costs more than $50,00o a patient.

But increasingly health plans and employers are covering less expensive biosimilar versions of Humira in a “preferred position” in their preferred list of drugs known as formularies. The PSG report said “65% of plans have implemented a preferred drug strategy for one or more Humira biosimilars.”

“Leaders are eager to try new approaches to address costs while preserving access to drugs that their members need,” said PSG’s chief operating officer, Rebekah Gregg. “Yet many benefit leaders lack the data, infrastructure, and confidence to fully implement those strategies. Transparency and clear, data- driven insights will be vital to adapt to the pressures payers face.”