Emerging Gene Therapy Offers Window Into Potential Costs of New Class of Therapies

By Linda Carroll

March 23, 2021

(Reuters Health) - The budget impact to Medicaid of gene therapy to treat severe sickle cell disease offers a window on the potential costs of this emerging class of million-dollar treatments, and requires payers to think about how to ensure access, according to a new study.

An analysis of the financial cost to 10 state Medicaid programs with a total of 2,315 enrollees who would be eligible for the sickle-cell gene therapy at a cost of $1.85 million per patient finds the mean one-year budget impact could be $29.96 million per state, researchers report in JAMA Pediatrics.

"There are lots of new treatments coming down the pipeline and some will present affordability challenges," said Dr. Patrick DeMartino, a pediatrician and fellow in the division of pediatric hematology at the Oregon Health and Sciences University. "We're hoping this will spark discussion on affordability before products enter the market."

The hope, Dr. DeMartino said, is that if people start thinking about the costs now, alternative payment methods can be considered.

A new lentiviral-based gene therapy for sickle cell disease (SCD) is showing promise in ongoing clinical trials, the study team writes in their report. The product, betibeglogene autotemcel, was approved by the European Medicines Agency in 2019 to treat beta-thalassemia, and "it appears that a gene therapy for SCD may soon enter the US market, presenting an option for a relatively large population in comparison with existing gene therapies for other diseases," they write.

To explore the possible financial impact of this sickle cell gene therapy, Dr. DeMartino and his colleagues focused on 10 state Medicaid plans with a five-year horizon, using state-level disease prevalence data from 2012. The annual budget impact was calculated as the estimated one-time cost of the gene therapy minus the annual savings from patients no longer needing treatments they previously received for the disease.

The 10 Medicaid programs with the highest prevalence of sickle cell disease were included in the study: Mississippi; Alabama; South Carolina; Georgia; Washington, DC; Louisiana; Virginia; North Carolina; Florida; and Maryland. Six of the 10 states have not adopted Medicaid expansion under the Patient Protection and Affordable Care Act.

The gene therapy was assumed to be administered to 7% of the eligible population annually and to be curative (no subsequent disease-related expenditures). In the base case, the gene therapy price was $1.85 million, and baseline disease-related expenditures were $42,200 per year.

The model projected a mean one-year budget impact of $29.96 million per state Medicaid program, or $1.91 per member per month. Florida was estimated to have the highest absolute one-year cost among the 10 states, at $67.43 million ($1.48 per member per month), whereas Washington, DC, had the lowest at $5.71 million ($1.81 per member per month).

Over time, the model predicted that savings would accrue, and fewer individuals would remain eligible for the therapy. An annual decrease in budget impact was predicted to occur across the five-year time horizon. In Mississippi, for example, the annual costs in years one through five were: $23.8 million; $21.6 million; $19.5 million; $17.6 million; and $15.8 million, with per-member per-month costs decreasing from $3.07 in year one to $2.04 in year five.

Comparing the standard payment scenario with a five-year annuity payment, the researchers found the annuity payment plan decreased the short-term budget impact during the first four years by deferring some spending beyond the five-year horizon. By year five, the annuity model's annual budget impact exceeded the standard payment plan.

The cost of the treatment might be considered a form of reparation, an editorial accompanying the study suggests.

"In the U.S., most patients with SCD have African ancestry which can be traced to the United States' original involvement in slavery," writes Dr. Philip Ozuah, a professor in the department of pediatrics and a professor in the department of epidemiology and population health at the Montefiore Medical Center in the New York City. "Limiting this population's access to a cure for a chronic disease that denies them a normal life from childhood on would be a cruel extension of the countless injustices inflected on their forebears."

Dr. Ozuah concludes, "there is a debt to be paid here, and we as a society should welcome the chance to pay it. There are, after all, so many others that will not be paid."

The issue is a little complicated, as the editorial demonstrates, said Dr. Albert Wu, an internist and a professor of health policy and management at the Johns Hopkins School of Public Health, in Baltimore, who wasn't involved in the study.

"You could use the reparations lens to argue that the federal government through Medicaid should pay for this," Dr. Wu added. "And while I don't disagree with that, I think there are other ways to think about it."

The gene therapy "is at the moment an astonishingly expensive therapy and it looks likely the costs the paper presents may actually be an underestimate," Dr. Wu said. "But it is a very useful paper because this is just the first in what is likely to be - and what hopefully will be - a growing series of conditions which would be amenable to treatment or even cure based on CRISPR-based gene therapy."

One thing the paper failed to consider, that should be considered, is the potential impact the therapy could have on quality of life, Dr. Wu said. "The paper is not a cost-benefit or cost-effectiveness analysis," he added. "So, it did not consider the costs of the profound misery and lost productivity of sickle cell disease."

SOURCE: https://bit.ly/3r5zfL6 and https://bit.ly/3rc1N5R JAMA Pediatrics, online March 22, 2021.

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