Zolgensma’s successful market uptake by payers may hold lessons for other manufacturers of costly gene therapies.

When Zolgensma was approved by the FDA in May 2019 for the treatment of spinal muscular atrophy – a rare, deadly genetic disease – the gene therapy became the most expensive drug in the world, at $2.1 million. The question became whether payers would accept and pay for such a product, which was approved to treat children under the age of two as a “one and done” treatment.

While Novartis has experienced some roadblocks from the FDA in trying to get Zolgensma approved as an intrathecal injection for adults, the company has been able to quietly prove critics wrong, at least concerning the drug’s initial launch. In February, Novartis announced fourth-quarter 2019 sales of $186 million for Zolgensma, which beat analyst expectations of $177 million. The company reported that payer coverage of Zolgensma is strong with 97 percent of commercial and 50 percent of Medicaid lives covered. The strong sales indicate that even despite a multi-million dollar price, payers seem willing to pay for a gene therapy product with strong efficacy and opportunity to offset costs by replacing other costly medications.

Another costly gene therapy is waiting in the wings, however. With Novartis’ success, attention will shift to the impending release of gene therapy products for hemophilia, a not-so-rare genetic disorder but one of the most common genetic disorders targeted by gene therapy. BioMarin is expected to be the first to approval with Valrox, which has had a proposed price tag floated as high as $3 million. The question is whether payers will be as welcoming to the cost and volume of hemophilia gene therapy as they have for Zolgensma, or will they drag their feet and wait for competition.

How BioMarin enters the market, and what the company offers payers, may play a pivotal role, and they could take some lessons from what Novartis did with Zolgensma.

 

Laying the groundwork for gene and rare disease therapies

For any company launching a costly therapy, especially for a rare disease, understanding how the payers see the product is critical, according to Clint Burrus, CEO of Ashfield Market Access.

Burrus says payers will view the product “very differently than how the company sees the product, or the patient maybe will see the product, or support networks around the patient see the product, or even how the healthcare practitioners will see the product.” This means it is “absolutely critical” that any company launching one of these products must do their market research, to understand what the payer is looking for, and what it takes to ensure that the product has access in the marketplace. “And it’s probably better to do that earlier rather than later,” Burrus says.

According to Burrus, this market research needs to have a clinical development component, to understand what the endpoints need to be, not just from what the FDA requires for approval, but also what are the clinical relevant endpoints that payers are going to be looking for. He offers a hypothetical example of a product that treats eyesight, and after treatment the patient’s eyesight statistically improved but still was blurry, “but is it clinically relevant? If one function is improved then possibly, if more than one is improved then the likelihood increases. The key is to understand what activities from a clinical view are important to payers. Unless you do the market research, understand the issues and address them, your product may face barriers for reimbursement.”

Another critical area of market research for companies looking to launch a rare disease or costly gene therapy product is to understand the benefit design. “Is the product an infused product? Is it an injectable product? Is it an oral product? And based on some of those criteria it may fall under a medical benefit or a pharmacy benefit. And if it’s a medical benefit, the out-of-pocket cost to the patient could be significantly different and a much higher coinsurance rate than it would be under the pharmacy benefit side,” Burrus says.

If it’s an expensive drug that falls under pharmacy benefits, it will fall under a coinsurance range, usually with monthly out of pocket limitations. However, products that fall under the medical benefit of an insurance plan – usually infused or injection products administered by the physician in the office or other outpatient clinical setting – are not subject to some of those same, lower out-of-pocket costs for the patient. And these costs could range as high as $10,000.

According to Burrus, this means the company developing the rare disease therapy “really has to stop and think” about if the product would fall under most payers’ medical benefit, what the implications would be to buying down that out-of-pocket cost for the patient.

“If it’s a government patient, you can’t really buy down that cost directly,” he says. “So what are the other avenues to minimize the out-of-pocket cost to the patient in a way that is beneficial to the patient?”

Payers will be scrutinizing all of those aspects of how the therapy can fit into their benefit design, and how it fits into their overall cost of treating a disease.

“All of those factors are going to be an influence. So if it’s a pharmacy benefit, it may be subject to a new-to-market block, in which the payer is not going to reimburse it except for medical necessity, until they’ve had time to review it,” Burrus says. “There could be issues about the timing of coverage of the product.”

Manufacturers will also have to take into consideration whether the product will be for a commercial audience or a Medicare/Medicaid plan audience when looking at the kinds of discounts they can offer. “You can’t use the assistance programs in the government programs, so what other systems can you use to help the patient from a cost perspective?” Burrus says. “The company needs to know that coming in because it will have a huge impact on their gross to net. If you’re buying down a commercial patient’s script, and the insurance coverage is pretty significant, even though the patient does have co-insurance and you buy it down, it’s still pretty profitable. But if it’s Medicare Part D and you have to put money in foundational support following appropriate government guidelines to the process, maybe it is, maybe it isn’t. That is why the market research is so critical.”

Additionally, companies will find in their market research that even in the commercial sector, what a payer is looking for often depends on the type of payer they are. “A PBM may look at it very differently than insurance companies or integrated delivery networks,” Burrus says. “And the timing of when you see cost benefit from that is going to vary as well too.”

Another critical component is how is the product distributed. “Since you’re dealing with a rare disease, it’s generally not going to be a widely distributed product, but limiting the distribution network can play a critical role in whether a product is reimbursed,” Burrus explains. “Most of the big payers own their own specialty pharmacy network, and excluding their specialty pharmacy from your distribution network can have significant consequences for a rare or orphan product. So that’s another component to the market research that needs to be understood and done correctly.”

Manufacturers also need to understand that payers may not be looking at a long-term value message for products, Burrus points out.

“If you’re looking at something that shows value for a payer over a five to 10 year period of time, that message is probably not going to be well-received by an insurance company that on average has patients within their benefit design for two to three years, versus an employer who may very well be interested in that data,” Burrus says.

“The other thing from an HEOC modeling standpoint, and what a lot of companies entering the rare orphan disease space don’t appreciate is, they may have the first product with an approved indication for that particular disease, but if there is a standard of care out there that may not have that indication but health plan recognizes it as standard of care and it’s less costly, and the health plan believes it’s consistent as to what their needs are, that’ll weigh in on their decision of coverage of the new product.”

Although the pharma companies have to launch their gene therapies at a high price point to make them economically viable, Burrus says once they have done their payer market research and understand what the needs of the payer are, and position their economic arguments within the framework of what the payer is looking for, most payers will be looking for cost or utilization guarantees.

“Payers can’t go into negotiations with manufacturers without an understanding of what the financial implication can be to their organization,” Burrus told Med Ad News. “So they’re going to be expecting the pharma company is going to bring in something that is going to guarantee them certain utilization restrictions or certain cost guarantees.”

When creating the value proposition and cost arguments for the payer, manufacturers need to provide accessible data models that can be used to validate the cost guarantee. “Payers are telling me that what they don’t want is something so absolutely complicated that they either have to hire people to build a database for their own internal system or that they have to spend a lot of time digging through their own internal database to pull that out,” Burrus says. “It needs to be something that’s relatively simple enough and easy enough to measure, that the payers don’t feel that there’s added cost to them to validate the guarantee.”

Advocacy support for the patient can also be impactful to the process. Pharma companies need to use advocacy support groups for rare disease patients in a way for the payer to understand what the value and importance of the product is.

“Likewise you want to do the same thing with HCPs,” Burrus says. “And even if the plan puts in barriers to access, in almost every instance the healthcare practitioner can do a medical necessity to access the product. It goes through different criteria and review processes, and each plan is a little bit different on how they do that. But if the HCP is absolutely willing to advocate to get that product to the patient, ultimately in these rare diseases they more than likely will be successful. And the more of those that occur and the more that happens, the more willing that payer is to open up additional access and coverage of the product.”

According to Burrus, manufacturers should start their conversations with payers no later in the development timeline than Phase II/Phase III.

“That way when they’re setting up their clinical trials, they can understand, ‘OK, here is what the FDA requires us to do, what additional information do I need to pull out of these studies?’ And how can I set them up in a way that gets that information that the FDA will also agree to in the clinical protocol, that helps me answer the questions the payers are going to be looking for.’”

Additionally, who a marketer talks to at the payer is critical, because they need to reach the actual decision makers.

“You need to make sure that you are talking to the right people,” Burrus says. “A lot of companies talk about their market research capabilities, but they have broad capabilities and not necessarily payer specific. You really have to get within payers to decision makers and understand that.”

In most cases, the manufacturer will have to be doing blinded market research because most payers do not allow their people to participate in open market research.

“You need to make sure the company doing the market research has the connections to talk with the decision makers, and get true feedback on how a product is going to be evaluated, and not someone in an ancillary position who knows a little bit about how things work but really isn’t a decision maker in the process,” Burrus says. “You need to get people who have worked in that business for an extended period of time and has relationships.”

He believes that it’s not only critical that the researcher have the relationships, and the track record for success in those interviews, but “maybe they’ve worked on both sides of the table. They’ve worked on the pharma side and also worked on the payer side.”

Once a company has done thorough market research that can answer all payer questions, Burrus says interaction with payers will be a little bit easier of an interaction with payers going forward.

“But the companies have to keep in mind that payers are very skeptical of any economic information that’s shared with them,” Burrus states. “One in particular told me, ‘Everyone has a health economics outcomes mode, and I’ve yet to see one that doesn’t show that their product is cost effective.’ That doesn’t mean that it isn’t cost effective in their environment though. But it’s really critical that [marketers] understand what each of the payer segments are looking for, and specifically within each payer.”

In some instances, Burrus says, a company should seek to duplicate its economic studies within the payer’s database.

 

The lessons of Zolgensma

According to Jeremy Shafer, senior vice president for PRECISIONvalue, with Zolgensma sales surpassing Wall Street expectations, proof of strong coverage across the board by commercial payers and signs that coverage in the Medicaid market was expanding, the company has shown that a high-priced gene therapy could be successful.

What did Novartis do to ensure the success of Zolgensma?

“I think some of the things that they did that were smart was, they did a really good job laying out what was the unmet need,” Schafer told Med Ad News. “Spinal muscular atrophy is a very serious fatal condition. Babies are born with it and the only treatment options were pretty limited, only Spinraza, which itself is fairly expensive, was really the only alternative. And Novartis had done a cost-effectiveness announcement ahead of time showing that at their pricing level, the drug would pay for itself in less than 10 years, and possibly sooner, depending on how the patient was being treated. I think they had laid out pretty good groundwork to payers and the marketplace before bringing that product prospect out.”

But BioMarin faces some very different challenges, he points out.

“When it came to Zolgensma, they’re talking about treating newborns and a situation where the disease is fatal and therapy options are very limited,” Schafer says. “In the case of what Novartis was able to do with Zolgensma, that this is a vulnerable population that you need to treat right away, and the only other drug available is very expensive itself, but in hemophilia it’s going to be very different.

“In hemophilia the gene therapies probably won’t be used in patients any younger than 12, because you have to wait until their liver has matured so that the drug doesn’t get … one of the concerns is that the drug could get nullified as the liver grew and the cells that were growing were not set up with this new gene. So the patients are going to be older, and hemophilia is a marketplace where you actually have a fair amount of treatment options that work really well.”

“In terms of gene therapies, BioMarin is going to be entering a market that already has a fair amount of therapeutic options available that clinicians know, that patients know, that payers know, that aren’t going to be wanting to give up that market share,” Schafer says. “They are definitely coming into a different environment than Zolgensma did.”

Clotting factors have been the standard of care for decades, greatly extending the lives of people with hemophilia and improving their prognosis.

Although the mechanics of administering clotting factors can be cumbersome, limiting things such as travel because the patient has to worry about storing and accessing their therapies, there are other solutions available. Roche received approval for Hemlibra in 2017, and received expanded approval for the product in 2018. Hemlibra, in comparison with standard clotting factors, can be dosed as little as once a month as a subcutaneous injection, and has had a very rapid market uptake, according to Schafer.

Roche’s success with Hemlibra came from emphasizing the quality of life messaging. “That was something that Roche really hammered on in their campaign, in addition to the promising efficacy, data that they had, that was part of their argument, was that even of you are well-controlled on clotting factor, you’re still doing infusions two to three times a week and there would be storage requirements around it, a lot of hassle,” Schafer says. “If you travel, you’d have to bring it with you. Roche painted this picture that there is a fair amount of hassle associated with this, versus the subcutaneous injection would be weekly to monthly, so they really capitalized on that. ‘You’ll still have hemophilia but we will make it a lot easier for you.’”
BioMarin could make a quality of life argument for its gene therapy, offering a potential cure for some patients and no more clotting factors.

“I think the gene therapy manufacturers, they will follow down a similar route,” Schafer says. “They’ll lead with their clinical evidence, because that’s always the first step you take, to showcase not only the really low incidence of bleeds, but also that patients treated with the gene therapy came off clotting factors entirely. But they’ll also market to the convenience portion, such as ‘Don’t worry about a missed dose,’ or ‘Don’t worry about what you do if you travel and is your therapy ready,’ ‘Don’t worry about what do you do if you have a breakthrough and your existing therapy isn’t working and you missed a dose on your schedule, you’re essentially cured.’ I think that’s definitely part of the angle they’ll take is, don’t treat the condition, cure the condition. I think that would probably be their wisest angle.”

Where there’s the rub, according to Schafer, is whether BioMarin’s gene therapy Valrox is actually a cure.

“This is something that the gene therapy manufacturers need to keep coming to is, is it a cure?” he says. “Because even in BioMarin’s data for their product, which is in the lead right now, you can see from year one to year two to year three, there’s been a decline in factor activity. So I think a lot of stakeholders, whether they’re payers or providers or patients, are wanting to see what does year four look like? What does year five look like? Because if it’s a gene therapy that essentially cures you for a lifetime, even at a price of several million dollars, that can be a pretty attractive proposition, given the cost of chronic therapy for hemophiliacs and the risk of complications.”

Schafer adds, “But if after four years the effect wears off and you have to treat again, it becomes significantly less attractive. There’s the convenience benefit but a payer isn’t going to pay a ton of extra money for patient convenience. That’s one thing they’re going to have to continue to educate the market on is their longer-term data.”

BioMarin and other hemophilia gene therapy manufacturers will have to emphasize the unmet need, “which in hemophilia is going to be complicated since there are a lot of established products on the market already,” Schafer says. “That’s something that marketers are going to need to do with providers, patients and payers, is yes, there are treatment options out there, but there is still a significant unmet need that this gene therapy can address that maybe the other products can’t.”

BioMarin will also have to answer a lot of hard questions about cost effectiveness, Schafer explains. “Cost effectiveness is increasingly part of the conversation in healthcare delivery, especially if the price comes in at two to three million dollars or somewhere in there,” he says. “They’re going to have to be able to speak to that and say, ‘Yes, we realize that this is a significant investment, but here’s the savings you’ll have from chronic therapy, here’s the benefits to patients having more freedom, and a higher quality of life.’ So they are going to need to address that as well.”

If a marketer of a hemophilia gene therapy can show their product is a one-and-done, that also may appeal to physicians, who often find their patients forced to switch to lower-cost or generic options. “They can market it as a one-and-done, that it’s not a situation that, ‘Doctor, if you put a patient on this drug, they may wind up having insurance issues two to three years from now and they’ll have to come off of it,’” Schafer says. “In this case, it’s you administering it, you’re done. There is no need for this ongoing back and forth about what’s covered or what’s not. That’s something inherent to gene therapy that they can market on as well.”

One of the concerns that PRECISIONvalue has heard from payers about covering gene therapies is that the patient leaves the plan, and a competitor, another health plan, reaps the benefit of the investment that the first plan made.

“That is something while it’s a legitimate concern, it doesn’t have seemed to slow Zolgensma that much because for a lot of payers, they might pay for one patient who leaves and benefits another plan, but a different plan might pay for a patient that eventually comes to their plan and in the end benefits them,” Schafer explains. “You have a potential to lose when patients leave, but you have a potential to gain when patients come.”

Patients with hemophilia may change that paradigm, Schafer notes. “When they find a health plan that has a good coverage situation, they tend to stick with it for awhile, and not risk moving around and losing coverage for their treatment,” he says. “So they do tend to be a little more sticky than the average person.”

Manufacturers aiming to launch a rare disease gene therapy should never assume that a disease is too small to be managed by a payer. “They should go into it thinking that payers will or may put down managements and barriers, and they need to think about what those barriers might be and how to market effectively to minimize the impact of that,” Schafer says.

And for gene therapy in particular, it’s all about the follow-up data. “Just because you’ve launched the product doesn’t mean you’re off the hook,” Schafer says. “Keep following it up to see how long term the drug works, and find ways to market on that. Because it would be a significant advantage to a product that is already out compared to one that’s in the pipeline, to say we’ve got the data on this drug, it’s already out, this drug keeps working, why try anything else?”

Roshawn Blunt, managing director of 1798, a Fingerpaint company, also points out that marketers need to understand that treatments for rare diseases and gene therapies aren’t immune from payer control.

“I think for some people that’s been a perception that even with a potential higher price point and you are developing these therapies that from an actuarial perspective within a payer there may not be that many patients, there will be easy acceptance of that price point.” This means what Novartis needed to do to was a lot of work to help drive through any level of payer acceptance.

Novartis did “very thoughtful planning” that included everything from launching with a price strategy that allowed them to optimize revenue, according to Blunt, “and also thread that needle based on where ICER said was an appropriate point, so the value of the product actually happened to match the therapy.”

Novartis also worked with MIT to come up with ways to immediately address payer concerns with payment, even looking at ways to do the installment payments, “though those weren’t readily accepted by the payers overall,” Blunt says. “But being amenable to going into outcomes-based contracting, which actually is seemingly what is supporting a lot of the access, is certainly a key lesson to learn – to work early, think about the structures that payers are going to need, focus on those and not being afraid to use FDAMA 114, to have those thoughtful discussions around how access is going to shake out.”

But marketers should try to avoid pulling broad lessons from the marketing of Zolgensma, Blunt cautions. “I think it’s very important to use the right analogs,” she says. “What is the payer mix for any other product that’s coming to market? Is it going to have the exact same dynamics? Obviously there are differences in coverage uptakes between the commercial side and the Medicaid side. If you had a Medicare-heavy product that came to market, would you have the exact same thing [as Zolgensma’s uptake success], especially based on some of the limitations? Site of care is very important, is it an infusion that can be done as an outpatient or as a hospital in-patient? That can certainly have a very different dynamic as to the strategies and approaches.”

Zolgensma is administered only once to the patient, while other gene therapies are going to require continued dosing over a period of time, even years. This means there is an economic and net cost that will go to possible multiple payers, Blunt notes.

“And they’ll all have that curative promise, so it’s what research is available, the size of the patient population, and level of advocacy,” Blunt explains. “There are a lot of things that you can look at and see major lessons, but I would also caution any one organization from focusing too specifically on an analog if it doesn’t have some symmetry to its product and its patient population, advocacy group, other issues that are surrounding it and may look like when it comes to market.”

Even though Novartis has published its coverage numbers for Zolgensma, Blunt says she and other researchers take a very deep look at what is the definition of coverage for any product.

“There are some plans out there that don’t cover Zolgensma precisely to the FDA label,” Blunt told Med Ad News. “Now I would certainly think that given how important this therapy is, given how transformational it is, not having perfect coverage being a little more restrictive than what’s on the label is still advancing therapy for some patients but it’s important to dive in even deeper and ask what is the definition of access. To say that payers are covering it doesn’t mean that it’s perfectly even coverage or that it’s coverage as to what the FDA label says. So that’s another thing to consider when you’re really just talking about access with a capital A.”

If companies are going to seek out early conversations with payers, what can they legally talk about. Blunt points out the “great clarity” provided by the 21st Century Cures Act’s FDAMA 114, which laid out what marketers can say in advance of an FDA approval and launch. Under this rule, marketers are more able to develop “a thoughtful and accurate payer value, to help payers really understand what is the clinical value of the drug, what is the burden of the disease? How many patients in their plan may be impacted by this particular disease state? What are going to be the outcomes, what are going to be the benefits overall?

“Making that really comprehensive and thoughtful message to them, coupled with the extent to which you are comfortable with having any conversations that suggest what the net price could be, helps the payer get a much more specific idea of how their plan and their beneficiaries are going to be impacted, and how they can think about the overall budget impact,” Blunt says.

Again, one of the things that Novartis did well was having those thoughtful, early conversations to continue to shift the market, Blunt says.

“And even though there may be some payers that are maybe a little more restrictive than many they hoped for, the dialog is there and some form of coverage is there,” Blunt says. “And Novartis is continuing to work with the payers, give them the data that they need, and let the data speak for itself within the payer’s own population, and bringing in the health economics outcome groups to drive that conversation is really key. Bringing in the medical affairs side, bringing in HEOR, having that comprehensive story, is really what’s critical to make it a true value-based story that’s being conveyed.”

The greater the challenge to access can be, the earlier the marketer should be having those conversations.

“Once the databases are going to be locked, in Phase III, is the time to be out there,” Blunt says. “A lot of times, the higher-cost products, the market access team and market access marketing, might be a little bit of the tip of the spear that’s going out there and having those conversations with payers. Or it could be hospital pharmacists as population decision makers, and others to set the landscape and understand what is going to be receptivity to the overall value story. Those teams in combination with HEOR and medical affairs, are really going out there in the early days to make sure the landscape is set and is receptive to when the commercial marketing team comes in and does all of their great work so that people really understand the product for providers and patients, that there won’t be as much of a challenge to access. So it’s a little bit of a balance.”

One of the other things to consider with gene therapies is that many of them have Breakthrough Therapy status with FDA, so their approval may not wait for the Phase III data. “You have to gauge where you think you are with the FDA, where your launch timelines is going to be, and push back far enough so that you are assessing and messaging against any potential hurdles that you see as soon as possible, so that the landscape is set for when broader messaging starts to take place,” Blunt says.

Price and net price – and providing discounts – are always going to be challenges to marketers of transformational products, Blunt notes. “But even when you look at Novartis’ numbers and you can look at their strategies, you can see that they’re doing so,” she says. “Ensuring that you have the right statutory discounting strategy and discretionary discounting strategy that leads to an appropriate gross to net is important. And payers will be looking at that total net price.”

According to Kristen Roeckle, senior VP, commercial solutions, at Concentric Health Experience, one of the things that Novartis did really well when talking with payers and the public was its transparency.

“When we hear about a new rare disease product coming to market, payers know it’s going to be expensive, but start the conversation with them earlier and help them identify who within their plan is the right patient for it,” Roeckle says.

For Biogen, which had the first product for spinal muscular atrophy, one of the biggest hurdles that the company had to overcome was defining to payers which patients should receive the drug.

“Payers knew it was for SMA, but there are different phases and different stages, pediatric vs. adult populations,” Roeckle says. “One of the things that Novartis did really well, and their CEO did really well, was get ahead of it. They were honest and open and transparent up front. They wanted to partner with the payer to help them understand the cost implications and they actually proactively put out PR around the price being really high. Rather than waiting for that reactive approach, where people challenge it or there’s outrage, instead they got ahead of it, and they were open about the fact that it was going to be expensive. They were forward, they were transparent, and they worked with payers to help them try and figure out how to pay for it in an innovative models. And their CEO came right out and said that ‘We’re open to exploring all kinds of contracts, because we want patients to have this.’”

Casey McDonald, copy supervisor at Concentric, agrees that Novartis did well to get ahead of the game by addressing Zolgensma’s pricing.

McDonald says marketers should look at the example of Gilead’s hepatitis C treatment Sovaldi on what could go wrong, PR and treatment-wise, if costs are not addressed up front and early on.

“With Sovaldi, no one was prepared for big bills coming out,” McDonald says. “ You had patients waiting, patients that they were ‘warehousing.’” Looking at this example, this means companies need to start their conversations early with payers and regulatory authorities, and those kinds of conversations “are happening more and more.”

“Right now, the 21st Century Cures Act allows a manufacturer to start communicating about a branded product to payers, in any type of non-misleading way, clinically based, prior to launch,” Roeckle says.

How early should manufacturers be speaking to payers? According to Roeckle, “We see a lot of our manufacturer clients doing that six months pre-launch. Where there is going to be a high price point, we’d recommend up to a year, just to start priming them and being clear about your expectations as a manufacturer, and kind of opening the doors to talking about projects and partnerships longer term.”

With rare diseases, the number of patients is small but the impact on a payer can be huge, especially if the plan is not a big one. “For example, looking at a Blue Cross/Blue Shield of Michigan, or Blue Cross/Blue Shield of Florida, if they have one patient in that population, it’s a huge hit,” Roeckle says.

She recommends that marketers prioritize those smaller plans.

“Those are the guys that manufacturers need to be looking out for, and understanding what their costs will be in the year ahead,” Roeckle says. “The cycle in general with payers is a little bit longer, so I would definitely say that six to 12 months at a time.

Such a strategy especially applies for gene therapies in more common diseases such as hemophilia. “You’re going to have more patients but it still will be expensive, and some of the smaller plans will be on the hook for a decent cost,” Roeckle told Med Ad News. “The more you can get ahead, and help them start to plan their risk, and how much risk they are going to have in the next year or two years is important.”

According to Roeckle, these smaller, more regional health plans would be more likely to discuss different types of contracting with manufacturers.
In a non-gene therapy example,

AbbVie has convinced Washington state to try a “Netflix” style subscription model to treat hepatitis C patients with its drug Mavyret. Louisiana’s Departments of Health and Corrections chose to contract with Asegua Therapeutics, the generics subsidiary of Gilead, in a subscription-style deal to treat its hepatitis C patients.

Roeckle says with some of these gene therapies, the way that payers are thinking about contracting is much different – they may be looking at endpoints in the trials and contracting to those. If the therapies are disease-modifying rather than cures, payers are looking at the changes to patients over time.

“So starting those conversations even earlier is going to produce better outcomes for both the manufacturer and the plan, because everyone will be aligned and understanding of what the product can offer, what they can expect the long-term result to be, what they can expect their cost to be, and then how can everyone help mitigate that via contracting,” she says.

Contracting has had such a bad rap “because rebates sound terrible,” Roeckle says. “It sounds like, ‘OK, we’re going to give you a discount and hope you can drive volume.’ But in this case, it’s not rebates, it’s we’re helping a plan to have an values-based contract or an outcomes-based contract, based on that gene therapy that is going to be meaningful for both the manufacturer, because they believe in the product and that it will work, and also for the plan, who can anticipate that some of the financial risk will be mitigated.”

Defining the patient groups is also critical. “Different patient groups add complexity, so any more information that you can get to payers, the sooner, the better,” McDonald told Med Ad News. “But that also means the endpoints might be more complex, as opposed to a rare disease where the endpoints can be pretty straightforward.”

Roeckle also emphasizes the need to define the right patient for the product. While accepted biomarkers are a way to do this, manufacturers can look at other data to use as biomarkers.

“We always think of biomarkers as something like HER2-positive, or something set in stone,” she says. “But look at your data and see if there’s any way to segment it. If you’re looking at a trial outcome and you happen to see a certain cohort is doing better, can you dig into it with your medical team and figure out why? It may not be something that you promote on, like, ‘Patients with this specific enzyme or protein present did better and we’re only going to promote to that.’ That’s not the point. But with payers, that might be a hook in. You can go in and say, ‘Hey, we noticed with our MSL team, there’s this one little group of patients that did exponentially better, let’s talk about them.’”

Roeckle continues, “Because that could be a really nice way in to get a hook, and then you can halo that effect out. I think a lot more clients are hesitant to do that. They see the opportunity, but if they hold to one patient type … think about the payer. Is it better to be tried in one type of patient first, and hope for trial and usage to drive further use, or just to be blocked right away and fully restricted? Kind of weighing those options, versus their commercial goals, is critical. But the more that clients can identify the patients that do really well to prove value, even more deeply, is really going to be important. The way to do that is to expand what we consider a biomarker. If this group of patients did better and we know it, and it’s statistically significant, let’s start there.”

If the manufacturer of a gene therapy decides to have direct conversations with patients about their products via direct-to-consumer advertising, Roeckle advises caution, because patients may not have access to that product.

“If you’re driving a patient in, you want to make sure that you have really good access, so that when a patient asks their doctor for it, they get it,” she says. “If you’re driving a patient in and promising them success, in DTC, and then they get to their doctor and they can’t get it, it’s a big downfall for the manufacturer.

According to McDonald, in fashioning any sort of DTC campaign for a rare disease, manufacturers will have to talk to the real experts: the patients. “In some cases rare disease patients can be just as knowledgeable as the doctors,” he says. “The doctors may see two or three of these patients a year, but the patients can be really well networked, they talk to each other, they know the drugs, they understand the endpoints. So there are some overlaps there when you’re talking to these patients as well as physicians.”