Connect with us

TOP BREAKING NEWS!

Insurers Pitch New Ways to Pay for Million-Dollar Therapies


Financial

Insurers Pitch New Ways to Pay for Million-Dollar Therapies

https://www.wsj.com/articles/insurers-pitch-new-ways-to-pay-for-million-dollar-therapies-11567677600?mod=hp_lead_pos8

Insurers are scrambling to blunt the expense of new drugs that can carry prices of more than $2 million per treatment, offering new setups aimed at making the cost of gene therapies more manageable for employers.

Cigna
Corp.


CI -1.32%

plans to announce Thursday a new program that allows employers and insurers to pay per-month fees for a service that will cover the cost of gene therapies and manage their use.

CVS Health
Corp.


CVS 1.60%

says it plans to offer a new layer of coverage specifically for gene therapies, which would handle employers’ costs above a certain threshold.

Anthem
Inc.


ANTM -1.50%

said it is looking at special insurance setups to help employers protect themselves from the financial impact of the drugs.

Rising Payments

Spending on gene therapies is projected to grow 25-fold between 2019 and the end of 2024.

Annual U.S. sales, gene therapies

“You have all these new products coming to the market at these very high prices,” said Steve Miller, Cigna’s chief clinical officer. “Clearly this is a pain point in health care that needs to be solved.”

Cigna hasn’t set a fee yet, but Dr. Miller said the company is aiming for it to be less than $1.00 per member a month.

The protection plans are limited so far, and it isn’t clear that the insurers will be able to bring down the overall costs of the therapies, as opposed to simply spreading them out. Insurers say they are pushing for deals that tie payments for gene therapies and other high-cost medicines to their results in patients.

Drugmakers, for their part, say they are open to working with insurers on new payment arrangements that improve patient access to their products.

Drug pricing is complicated and secretive. WSJ explains how the flow of money, drugs and rebates behind the scenes may drive up the price of prescription medicine for consumers. Illustration: Mallory Brangan

Gene therapies, which replace a faulty gene with a functioning copy, promise to cure hard-to-treat inherited diseases. But their price tags threaten the balance sheets of employers and insurers, especially as more hit the market.

Novartis
AG

priced Zolgensma, a gene therapy for a muscle-wasting condition known as spinal muscular atrophy, at $2.1 million.

Meantime,

Spark Therapeutics
Inc.

listed Luxturna, which treats a form of inherited vision loss, at $850,000.

In June,

A Step-By-Step Blueprint For Making Money Online, That Is 100% Dummy Proof!

GET EASY FREE TRAFFIC + AFFILIATE OFFER = COMMI$$IONS

Get The Simple Traffic Blueprint Now!

Bluebird Bio
Inc.

said it would price a new gene therapy for a rare blood disorder at €1.6 million ($1.8 million) in Europe, where it has been approved.

“Employers are saying, ‘I just can’t afford it,’” said CVS Health Chief Medical Officer

Troy Brennan.

So far, health insurers have tried to balance providing patients access to the new therapies with managing their cost partly by setting conditions that limit who can get the drugs.

The protection plans represent an additional approach. The Cigna program, called Embarc Benefit Protection, will launch with Zolgensma and Luxturna for 2020, and the company aims to add more drugs in the future, Dr. Miller said.

SHARE YOUR THOUGHTS

How should insurers best cover high-priced drug treatments? Join the conversation below.

Embarc will administer the review process that decides which patients can get the drugs, and Cigna’s specialty pharmacy can dispense the drugs.

Cigna said it wants to accumulate enough clients in the new offering to gain more leverage with the drug companies and wring out better deals for gene therapies. “We’re looking for money-back guarantees,” said Dr. Miller.

A spokeswoman for AveXis, the Novartis subsidiary that developed Zolgensma, said the company hasn’t been briefed on the new insurance payment plans, but recognizes “innovative therapies like Zolgensma require innovative solutions for access.”

A Spark spokesman said the company continues to evaluate “ways to enhance patient access” to Luxturna with various stakeholders.

CVS’s new offering on gene therapies, for self-insured employers that are clients of the company’s Aetna health insurer, will include Zolgensma and Luxturna and potentially other treatments, Dr. Brennan said. The stop-loss program, which would cover an employer’s costs that exceed a set threshold, will be available for 2020. CVS is also working on a broader reinsurance product for high-cost drugs, he said.

Anthem said it is evaluating reinsurance or stop-loss options that employers could use to shield themselves from the high cost of certain drugs.

The new options may prove attractive to employers that aren’t big enough to absorb the cost of the new drugs and don’t have existing stop-loss insurance that would cover them, said

Nadina Rosier,

who is head of the pharmacy practice at advisory firm Willis

Towers Watson
.

For companies that already have stop-loss policies that cover such drugs, “You have to ask yourself, ‘why am I double paying?’” she said.

Insurers in Massachusetts have been working on a pilot program in which they would forge installment-payment plans for expensive one-time treatments like gene therapy and agree to continue making payments even if patients taking the drug switch insurers.

The effort has stalled, however, because of drugmaker concerns about Medicaid best-price rules, which require the government program to receive the lowest price of any payer, said Mark Trusheim, strategic director of the New Drug Development Paradigms, a think tank run out of the Massachusetts Institute of Technology.

AveXis is currently offering a payment option that allows insurers to receive a rebate if the drug doesn’t meet prespecified clinical outcomes for the patient, the company spokeswoman said. The rebate cannot exceed the statutory rebate of 17.1% that drugmakers pay to Medicaid for pediatric drugs, the spokeswoman said.

Write to Joseph Walker at joseph.walker@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com

Copyright ©2019 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Free Gift With Our Newsletter

We hate SPAM and promise to keep your email address safe

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Top Stories!

To Top