RARE Daily

As Spending on Cell and Gene Therapies Grows, Challenges Remain

March 13, 2024

Rare Daily Staff

Spending on cell and gene therapies grew to $5.9 billion in 2023, a 38 percent increase from the previous year, according to a new study.

The study from the IQVIA Institute for Human Data Science notes that the spending accounted for just 0.4 percent of the $1.6 trillion spent on medicines globally in 2023.

As of the end of 2023, 76 cell and gene therapies have been launched globally, more than double the number of therapies that had been launched by 2013.

Cell and gene therapies are a broad group of medicines, including cell-based immunotherapies, cell therapies, gene therapies, and tissue-engineered products, but do not include RNA therapeutics. The report noted, though, that despite the growth, significant uncertainty still exists about the future for these therapies and the sustainability of the cell and gene therapy sector.

Among the critical issues the sector faces are health system infrastructure needs, the complexities of path patients must travel to receive these therapies, and the real-world performance of these treatments.

Venture capital activity and public transactions for cell and gene therapies have accelerated in the past three years. Following historic funding levels in 2021 and a retraction in 2022, nearly 100 deals and $3.4 billion of deal value occurred in 2023.

Later-stage venture capital deals grew in 2023 as earlier-stage deals declined. Nevertheless, all venture categories remain above levels seen five years ago.

Over the last five years 3,285 trials were started to evaluate cell and gene therapies in patients across all sponsor types, including 631 in 2023. Academic institutions, non-profits, and governments with no biopharma involvement represented more than one-third of the trial starts in 2023.

The report noted that cell and gene therapies present challenges to payers when evaluating the cost-effectiveness of these treatments. These therapies are often priced significantly higher than other existing therapies. Questions about the efficacy, durability, and superiority compared to other treatment options are often unclear because of limited data on their use. As a result, there have been disparities in cost-effectiveness analyses and reimbursement decisions across countries.

Though pay-for-performance agreements and outcomes-based rebates in some countries have allowed for patients to access these therapies, the report noted that the Centers for Medicare and Medicaid Services in the United States has typically been hesitant to adopt some of these payment models in the past. CMS will launch the Cell and Gene Therapy Access Model in 2025 to increase access to cell and gene therapies for Medicaid patients. Under the model, CMS will negotiate outcomes-based agreements with manufacturers for cell and gene therapies, and states will have the option to opt-in to these agreements. Additionally, states will receive resources from CMS to support the execution of these agreements.

As the portfolio of treatments expands, the report warned that some payment models may become unmanageable. “Payers and manufacturers will need to be flexible with payment for these therapies to ensure patient access while maintaining sound healthcare budgets,” the authors wrote.

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