Posted: 22 Oct. 2020 10 min. read

Next-generation therapies might require next-generation payment models

By Brian Corvino, managing director, Deloitte Consulting, LLP, and Sonal Shah, senior manager, Deloitte Center for Health Solutions, Deloitte Services LP

Next-generation cell and gene therapies hold the promise of curing diseases and helping people live longer and healthier lives. They treat diseases for patients who might have few options or no options. While the value to both patients and society can be enormous, such therapies can cost millions of dollars, and the long-term effects might not be known for years. A gene therapy for children who have spinal muscular atrophy, for example, is priced at more than $2 million.1 The average cost of a CAR-T cell product and related services averages about $419,000, according to the American Society of Clinical Oncology.2 Fewer than 2,000 people have received CAR-T treatments, but over the next five to 10 years, that number could reach 2 million, according to some estimates.3

Last month, we assembled 40 thought leaders from across the health care ecosystem—biopharmaceutical companies, health plans, pharmacy benefit managers, and health systems—for our third annual Value Exchange Summit. This year, we focused on strategies to improve patient access to next-generation cell and gene therapies, and innovative payment models that could be used to cover the cost.

Our summit participants agreed that affordability and durability of treatment response are the biggest questions that need to be addressed for next-generation therapies. While these therapies can be curative one-time treatments, they come with a significant one-time cost. While a therapy might cure a patient’s disease, it could take years of evaluation to determine the long-term effects. A health plan, for example, likely won’t want to pay for a multimillion-dollar curative therapy if there is no guarantee that the disease won’t resurface several years after the treatment. As a result, biopharmaceutical companies should work with commercial and government payers to develop innovative payment models that might help balance patient access and affordability.

By 2025, regulators expect to address challenges around patient access and affordability.4 During the session, participants focused on the following challenges facing cell and gene therapies: 

  • Financing, affordability and reimbursement innovation: Cell and gene therapy companies should try to be catalysts for change and be willing to take on risk, said one attendee, adding that partnering with payers with similar mindsets to launch pilots could be a first step. Biopharma companies should take an ecosystem approach and identify solutions that allow the economic benefits to be shared with all stakeholders, including patients. One attendee suggested that a biopharma company might offer some type of a warranty for a therapy where the payer and patient can recoup some of the cost if the therapy fails. Three countries—Germany, Italy, and Spain—have already entered into outcomes-based contracts for next-generation therapies. As more therapies are approved, it is possible that more patients will benefit and some of the cost barriers will come down as a result.
  • Finding, measuring, and sharing value: Defining and aligning on value might be one of the hardest parts of executing an outcomes-based contract. Sharing value is another important consideration. Some participants suggested that ecosystem stakeholders could come together to develop industry standards for measuring benefits and outcomes (e.g., improved productivity, avoidance of additional medical expenditure, etc.). One participant noted that his company hired a health economist early on to prepare studies, scrutinize the data, develop evidence, and help define the lifetime value of a therapy. He suggested that health economists collaborate with payers to design a credible, real-world-evidence (RWE)-based model. Another attendee stressed that cell and gene companies need to be transparent with their partners. They should identify the types of data that will demonstrate the value and effectiveness of a therapy, how that information will be generated, and how it will be evaluated.
  • Patient-access orchestration: Some patients might need to be followed for 15 years to determine the long-term benefits and safety of a therapy. For some therapies, eligibility-testing could require highly specialized tests that health plans might not cover. The cost of such tests might keep some patients from participating. All stakeholders could also face challenges evaluating patients over a long period of time. Biopharma companies could look at ways to remove friction points along the patient’s health journey. This could include creating registries, increasing access points, and paying for transportation. Additionally, a system where patients own their health data—which they can share and transfer seamlessly—would likely be valuable.

Once companies receive positive clinical data about their therapies, they should be prepared to quickly launch well thought-out market-access strategies. It might take 12 years to develop, test, and win regulatory approval for traditional small-molecule drugs. Cell and gene therapies, by contrast, are typically on an accelerated regulatory-approval schedule. Moreover, the diseases they treat tend to be rare, which means patient populations can be exceptionally small—and clinical trials progress much more quickly. A next-generation therapy might be ready to go to market as soon as patient data begins to emerge. This means biopharma companies should be able to pivot quickly from research and development to collecting and measuring RWE. As more of these next-generation therapies come on-line, biopharmaceutical companies should work closely with the health care ecosystem to help these therapies reach their potential.

It's imperative that stakeholders continue to get together for meetings (like this one) to discuss innovations in payment models for next-generation therapies. Deloitte has committed to regularly convene the Next Generation Market Access Industry Group to continue the dialogue on how to structure payment models, generate supporting evidence, and share value across the ecosystem. 

In the near term, Brian will be leading a discussion at this year’s Academy of Managed Care Pharmacy (AMCP) conference, where he will discuss the future cell and gene therapy landscape, the value these therapies bring, and novel payment models that can help tie payment to value.

Acknowledgements: Joseph Coppola and Mathias Cousin


1. At over $2 million, Zolgensma is the world's most expensive therapy, yet relatively cost-effective, Forbes, June 5, 2019

2. The Price of Hope: Weighing the Cost of CAR-T Cell Therapy in Treating Blood Cancers, CURE, September 23, 2020

3. Hospitals are saving lives with CAR-T. Getting paid is another story, STAT, March 12, 2019; Global addressable patient population for CAR T-cell therapies 2019, statista, September 1, 2020

4. Statement from FDA Commissioner Scott Gottlieb, M.D. and Peter Marks, M.D., Ph.D., Director of the Center for Biologics Evaluation and Research on new policies to advance development of safe and effective cell and gene therapies, January 15, 2019

Return to the Health Forward home page to discover more insights from our leaders.

Subscribe to the Health Forward blog via email

Get in touch

Sonal Shah

Sonal Shah

Senior Manager | Deloitte Services LP

Sonal is a senior manager with the Deloitte Center for Health Solutions within Deloitte Services LP and leads the center’s life sciences research. Through her research, she helps inform Deloitte’s health care, life sciences, and government clients about emerging trends, challenges, and opportunities. Her research focuses on R&D and innovation, the impact of the ongoing health care transformation to life sciences companies, and value-based care. Prior to Deloitte, Sonal worked in the biopharma industry. Sonal has a Master of Business Administration in health care management from the Wharton School, and a Doctor of Pharmacy from the Rutgers University Ernest Mario School of Pharmacy.