RARE Daily

Senator Argues for Novel Payment Mechanisms to Fund Gene Therapies

December 6, 2023

Rare Daily Staff

The growing number of high-priced, potentially curative gene therapies advancing toward a healthcare market that was designed around paying for long-term use of daily prescription medicines is creating the need for Congress to get involved in developing financing mechanisms for these treatments, according to Republican Senator Bill Cassidy of Louisiana.

Cassidy, who is a physician, outlined several issues that need to be addressed in an op-ed in Stat.

“Life-changing gene therapies are coming,” wrote Cassidy. “We must give thought now on how to determine the price of these innovative, new-age treatments and how to finance them to ensure that we realize their full, beneficial potential while also ensuring that society can pay for them.”

While highlighting several issues including the different financial burdens these therapies pose for commercial insurers, patients, and taxpayers through Medicaid—as well as the challenge of how to determine the value of these therapies—Cassidy outlines several novel payment mechanisms as solutions.

This includes outcomes-based arrangements that allow for partial or no payment when patients fail to derive benefit from a therapy. Another approach he puts forward is what has been dubbed a “Netflix” model where insurers pay an annual flat rate at a predetermined price to treat as many patients as possible for that price. He also discusses an amortized approach, the creation of an international fund to pay for such therapies, and a private-payer collaboration fund for curative therapies.

“I do not believe that any single one of these proposed models can do that in all cases, and at least for now we need to explore them all,” Cassidy wrote. “The tragedy would be if the benefits of innovation were denied because of an inability to afford the innovation. It is an issue which must be addressed.”

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