Early health economic models in gene and cell therapy to inform clinical trial design and optimize commercialization efforts

Research computer, lab

Early health economic models in gene and cell therapy to inform clinical trial design and optimize commercialization efforts

By Ivar Jensen and Philip Cyr

“All models are wrong, but some are useful”. George E. P. Box

This often-used quote among statisticians and health economic modelers points us in the direction of what makes early health economic modeling so important to cell and gene therapy companies. Let’s examine the first part of the statement: “All models are wrong….” Every model inherently must be “wrong” as it is a simplification of reality, and in the case of cell and gene therapies, it is an often complex reality that has potential to alter healthcare delivery (e.g., one or infrequent administrations, potential for curative outcomes, high “sticker price,” etc). Turning to the second part of the statement:  “…but some are useful,” health economic models do a specifically great job at helping us gain insight to explain, predict, and understand the value drivers for a therapy. These insights thereby enable companies to more precisely plan clinical trial design, other evidence development, and commercial strategy.

Most pharma and biotechnology companies routinely develop health economic evaluations, such as a cost-effectiveness analysis and budget impact analyses for their assets, since these models are required in countries with formalized health technology assessment (HTA) bodies to gain a recommendation of reimbursement and access to the drugs. These routine health economic assessments are based on pivotal trial results for a drug and are intended to quantify the direct and indirect consequences that give HTAs insight into value for money and affordability.

Since the early 2000s, early economic models have been used by many developers as a best practice to maximize development through clinical trial design and commercial success. Early economic models are similar to HTA models in that they assess the direct and indirect costs and consequences of using a new therapy. However, the early health economic model differs from an HTA model in that it is developed before the manufacturer has robust data on efficacy, safety, and other outcomes from clinical trials and other clinical and health resource use.

In our experience, especially for cell and gene therapies, early health economic models have been particularly useful in three major areas.

  • Assessing commercial viability. Using a target product profile and value proposition, a manufacturer can gain insight into the potential value a new intervention may bring to the healthcare system given different assumptions regarding attributes in the target profile. Some of these attributes may include specific patient populations, relative (compared to the standard of care) efficacy and safety, duration of effect of a therapy, and health resource use including offsets, administration, and pricing strategies. The early economic model can shed light to understand what impact these attributes have on value and which attributes are responsible for the quantified value. Additionally, the early model can help manufacturers understand what level theses attributes need to be at to deliver what HTA assessors call “value for money” at a given willingness-to-pay threshold. If a product fails to deliver these levels for the attributes in a given population, it may be an indication to re-examine the target profile, i.e., potentially evaluate or identify a subpopulation where conventional standards of value could be met, and if not potentially consider redirecting investments to another asset.
  • Developing clinical trial design and evidence-generation strategy. Building an early model can also be leveraged to pinpoint data that is required for substantiating the value in a health economic evaluation. The data needs may be based on the clinical trial. For example, if a cell or gene therapy is supposed to normalize a certain biomarker, it will be important to link that normalization to measures that can be quantified in a health economic evaluation. The data needs may extend beyond the clinical efficacy. A model may highlight a need for a burden of illness study, a chart review, patient preferences, quality of life assessments, utility weights, and comparative efficacy assessments, such as network meta-analysis or other forms of indirect treatment comparisons. Developing an early economic model will provide insights into the clinical viability as measured by specific level of efficacy and safety as well as provide insights into whether to include additional health economic outcomes in the pivotal clinical trial.
  • Planning for launch preparedness. The early economic model, though early, can be foundational to the health economic model that is eventually going to be submitted as part of the HTA evaluation once the definitive pivotal trial has been completed and analyzed and the asset has passed the market authorization process. Although early economic models tend to be confidential to the manufacturer and therefore rarely published, there is also an opportunity to use the information the early model generates to prime and educate the market about the magnitude of the current lifetime burden of disease, which would help ready payers and providers in advance of any launch.

The main limitation of the early models lies in the word “early.”  The word “early” in early economic model relates to the necessary simplifying assumptions leading to a level of uncertainty of the results that are dependent on the assumptions and attributes of which many may be aspirational and based on premature data points and evidence. However, in our experience we employ a similar process for developing HTA models as when developing early models in synthesizing the available evidence base through targeted or systematic literature searches as a method for selecting the most competent and reliable data available to populate the model with. When it comes to making assumptions and to minimize the uncertainty of the model structure and results, we build in the usual probabilistic and deterministic sensitivity analyses as well as involve clinical (external or internal) experts to validate clinical assumptions.

The downturn in the public markets have hit the biotechnology sector hard, especially cell and gene therapies developers; thereby, in many cases, limiting their ability to raise follow-on funds for continued research and development. Because of this, many firms have had to rationalize pipelines and understandably focus investments on mission-critical activities (such as the development of efficacy data, etc.) of prioritized assets. In this type of environment, the question remains, should developers of cell and gene therapies develop early health economic models? We think yes. In our opinion, it is one of the essential and mission-critical activities, as it is “useful” in prioritizing assets, constructing forward-thinking trial design, and preparing for launch in a cost-efficient manner.

Ivar Jensen, PRECISIONheor Ivar Jensen is vice president, PRECISIONheor where he focuses on developing rigorous and commercially relevant BIMs, cost calculators, and other health economic models for life sciences companies including pharmaceutical, biopharmaceutical, medical device, and diagnostic products.  Jensen brings more than 19 years of life sciences experience including nine years of consulting experience.  His consulting experience spans both health economics and outcomes research (HEOR) and commercial projects, including development of health economic models, HEOR value messages, commercial assessments, merger and acquisition support, asset valuation, and competitive analysis. Jensen holds an MBA, with honors from the FW Olin Graduate School of Business at Babson College and a BS in Chemical Engineering from the Danish Technical University. 

PhilipCyr, Precision Value & Health

Philip Cyr, MPH, is senior vice president, customer solutions for Precision Value & Health with responsibility for cell and gene therapy. Cyr has more than 26 years of health economics, outcomes research, health policy, and payer experience, including a strong record of conducting published research, conducting health technology appraisal within a U.S. payer, and interacting with global HTAs. Cyr and his team have built the health economic evidence and value demonstration strategy for more than 15 gene therapies. He received Masters of Public Health with concentrations in Epidemiology and Biostatistics from the Boston University School of Public Health and a Bachelor of Arts degree in Biology and History from Kenyon College.

Precision ADVANCE is a collection of interconnected services and complementary teams uniquely focused on the complexities of clinical, regulatory, manufacturing, and commercial needs to successfully bring cell or gene therapies to market.