Economic Assessment of Novel Gene and Cellular Therapies: Beyond Traditional Modeling


 J Clin Pathways. 2018;4(3):36-37. doi:10.25270/JCP.2018.04.00013


1Precision Xtract, Boston, MA; 2College of Health and Human Services, University of North Carolina at Charlotte, Charlotte, NC


Precision Xtract performs value and access consulting services and has provided those to entities developing cellular and gene therapies. Philip Cyr is vice president of evidence strategy, generation and communication at Precision Xtract. Dr. Blandford is the executive vice president and managing partner at Precision Xtract.

Various forms of decision health analytic modeling have been used for the last 3 decades to assess potential health economic impact of new therapies. As initial gene and cellular therapies come to market, debate is growing as to the best ways to evaluate the associated economic impact, specifically in the context of the shift to value-based reimbursements. We share some of our observations and early learnings in modeling the economic impact.

Science fiction author Arthur C Clarke once said, “New ideas pass through three periods: It can’t be done. It probably can be done, but it’s not worth doing. I knew it was a good idea all along!” Over the last 3 to 4 years cellular and gene therapies have reached the third phase of Mr Clarke’s innovation paradigm with a number high-profile therapies being approved by the Food and Drug Administration (FDA), including: 

  • Voretigene neparvovec-rzyl indicated for inherited retinal disease due to mutations in both copies of the RPE65 gene (gene therapy)1
  • Tisagenlecleucel indicated for the treatment of B-cell precursor acute lymphoblastic leukemia (chimeric antigen receptor T-cell [CAR-T] therapy)2  
  • Axicabtagene ciloleucel indicated for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after 2 or more lines of systemic therapy (CAR-T therapy)3

Now that these “good ideas” and clinical advances are coming to fruition, there is growing debate regarding how best to evaluate the economic impact associated with gene and cellular therapies, especially in health systems evolving to value-based payments. 

For over 30 years, different forms of decision health analytic modeling have been used to assess health economic impact of new therapies, undergoing a number of refinements along the way.4-6 For the most part, methodologies have been dictated by 2 core elements: (1) cost of treatment in the form of drug cost and cost offset, including pharmacy and medical costs; and (2) clinical (life years gained) and quality-of-life (quality-adjusted life years [QALY]) benefits. Taken together, these considerations result in an incremental cost-effectiveness ratio (ICER); the output of an ICER is cost/life year gained or cost/QALY gained. Through the years, the use of the ICER has become the mainstay of health technology appraisal organizations such as the UK’s National Institute for Clinical Excellence (NICE), the United States’ Institute for Clinical and Economic Review, and others. 

With experience in developing health economic models for several of the initial gene and cellular therapies that have come to market or are projected to do so within the next few years, we share some of our observations and early learnings in modeling the economic impact.

Differences in Development and Commercialization of Gene and Cellular Therapies 

Small Patient Populations

Most gene and cellular therapies are being developed for diseases with relatively small patient populations, frequently for refractory disease. A small patient population has multiple repercussions. First, it can lead to clinical trials with small sample sizes that generate nonrobust clinical data and, in some circumstances, may result in single-arm clinical trials; such findings impact how modeling is approached (eg, requiring indirect comparisons to be made). Second, the small overall treatment population could influence pricing decisions, which also impacts cost effectiveness. Last, treatment for these rare conditions often is focused in centers of excellence, which can impact which patients actually receive treatment as well as potential time and cost factors associated with traveling to a center of excellence. 

Intensive Manufacturing Process

It used to be said that it took $800 million dollars to produce the first pill, and subsequent pills cost 1 cent. This is not the case with gene and cellular therapies. In fact, CAR-T therapies are manufactured specifically for each individual patient, since the individual’s own white blood cells serve as the “raw material” for developing the final product. Thus, there are both time and cost elements for these types of therapies that need to be fully accounted for in economic analyses.

Value May Vary by Perspective

The value of a potential cure is extremely high for patients as well as for the clinicians treating them. However, a payer will always be concerned about assuming financial risk without confidence in duration of effect or that the individual may switch to a different benefit provider. For providers, therapy requiring an inpatient hospitalization also elevates their financial risk, since the cost will surely exceed typical reimbursement.

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