Gene therapy and employee benefits: from science fiction to medical reality
There are many quality improvement and risk mitigation strategies benefit advisors can bring to employers.
At the rate research and approvals have been accelerating, the 2020s may be remembered as the decade when the number and scope of gene therapy treatments expanded substantially. As of late May 2024, 14 gene therapies are FDA-approved for a range of conditions including sickle cell disease, hemophilia A and B, Duchenne muscular dystrophy, beta thalassemia, and metachromatic leukodystrophy. Nine of these approvals have come since August 2022, and currently in the U.S., more than 600 gene therapy trials are actively recruiting patients. This rapid pace is expected to continue, with at least three more approvals expected by the end of 2024 and dozens more anticipated by the end of the decade.
Now that gene therapies have been around for more than five years, durability and efficacy information is beginning to emerge. Luxturna® (voretigene neparvovec), which treats an inherited retinal disease that progresses to blindness, has thus far had good durability statistics. A surprise, however, has been Zolgensma® (onasemnogene abeparovec), available since 2019 to treat spinal muscular atrophy. Early statistics indicate that its durability of response has not been as robust as expected, with many patients requiring ongoing support from additional high-cost drugs such as Spinraza®.
The newest treatments and outlooks
December 8, 2023 was an exciting day in the U.S. for people with sickle cell disease, as two new gene therapies were approved that day. One, CasgevyTM (exagagamglogene autotemcel), is the first-ever gene therapy approved by the FDA that uses CRISPR (gene editing) technology. Casgevy was already approved in the U.K. to treat both sickle cell disease and beta thalassemia, and in mid-January, it was approved in the U.S. for beta thalassemia. The second gene therapy for sickle cell disease, LyfgeniaTM (lovotibeglogene autotemcel), uses a lentiviral vector, and had already been approved by the FDA for beta thalassemia since August 2022 under the brand name Zynteglo. Both treatments are intended for patients ages 12 and older.
In the U.S., sickle cell disease is classified as a rare disease, which means it is defined by the Orphan Drug Act as affecting fewer than 200,000 people. It has very high prevalence – 1 in every 300 to 500 births in the African American community – and elevated prevalence among Hispanics, with 1 in every 16,000 to 17,000 births. Currently, more than 100,000 people in the U.S. have sickle cell disease, and until now, the only potentially curative treatment was a costly allogenic hematopoietic stem cell transplant, for which many do not qualify due to lack of a potential stem cell donor.
Elevidys (delandistrogene moxeparovec), which was approved in June 2023, is the first gene therapy developed for Duchenne muscular dystrophy. It is only available for children ages four and five, so health plans are likely to experience claims quickly as parents urgently seek treatment before their child ages out of eligibility (RGA has already incurred a share of one claim for a patient about to turn age 6). Sarepta Therapeutics, the company which developed and manufactures the treatment, recently filed a request asking the FDA to eliminate the age range and ambulatory restriction. Although the company announced in late January positive results of a portion of the Phase 2 study, the outcome of its request is still uncertain, as the study did not meet its primary endpoints.
People with hemophilia A and B have long been one of the most expensive classes of patients in the U.S. It is not uncommon for a typical patient to incur claim costs of between $400,000 to $1.3 million per year, sometimes even more if a patient is injured, requires major or minor surgery, or develops inhibitors that require higher amounts of prophylactic factor medications. The one-time gene therapies come with very high list prices: $3.5 million for Hemgenix® (etranacogene dezaparvovec), which treats Hemophilia B (Factor IX deficiency) and $2.9 million for RoctavianTM (valoctocogene roxaparvovec), which treats Hemophilia A (Factor VIII deficiency).
BioMarin, which manufactures Roctavian, will also provide an outcomes-based warranty that will partially reimburse government and commercial payors if the patient loses response to the therapy within the first four years. Warranties will have to be negotiated by health plans and states, and the industry is currently developing ways to track patients with warranties due to changing health plans and employers. While price tags for hemophilia gene therapies are high, the high cost of existing hemophilia factor treatments actually could make these treatments a worthwhile investment.
Vyjuvek® (beremagene geperpavec), a first-time topical gene therapy, was approved by the FDA in May 2023 for dystrophic epidermolysis bullosa (DEB). DEB is a condition where collagen does not form normally, resulting in the formation of large, painful blisters where the skin and other epithelial cells are not able to properly adhere to the body. Two more DEB therapy approvals, for prademagene zamikeracel and dabocemagene autoficel, are expected in the coming months. These treatments may be used repeatedly over several years as well as simultaneously with one another, based on the size and the depth of the blisters to be treated.
How benefits advisors can help
Benefit advisors are working with their customers to determine which gene therapies should be covered and the degree to which the financial risk of doing so may be present for their health plan. While periodic and summary plan document reviews are common, a special review as to whether and how gene therapies are covered and described is recommended. Much akin to when transplantation was a new treatment path, there are many quality improvement and risk mitigation strategies benefit advisors can bring to employers. These include Centers of Excellence/Experience, boutique network and care management companies, and working closely with employers to ensure they have appropriately broad and matching stop loss insurance in place.
Looking ahead
Because gene therapies are very new, their longer-term durability, efficacy, and potential complications are still unknown, and it may be years before the quality of a patient’s health improvement is known.
Sickle cell, beta thalassemia, and hemophilia patients are likely to approach the new gene therapies with more hesitancy, which means initial utilization might be low. For people with sickle cell disease, hesitancy may be due to historic distrust of the medical establishment, the time and rigor of the gene therapy administration itself, infertility risk from the treatment (which is present for both gene therapy and bone marrow transplant), and pre-treatment costs.
For hemophilia patients, initial low utilization may stem from current patient access to prophylactic factor, which is already proven an effective treatment. These patients may await other options, including new improved factor products, new gene therapies, and CRISPR therapies. There is far more urgency for patients with DEB, Duchenne muscular dystrophy, spinal muscular atrophy, and cerebral adrenoleukodystrophy (CALD).
RGA is closely monitoring several gene therapy clinical trials, including treatments for rare conditions such as AADC deficiency, leukocyte adhesion deficiency type 1, Fanconi anemia, metachromatic leukodystrophy, mucopolysaccharidosis, cystic fibrosis, Pompe disease, Gaucher disease, hereditary angioedema, retinitis pigmentosa, x-linked retinoschisis, and Leber hereditary optic neuropathy.
In the future, gene therapies may be developed for less rare conditions, such as congenital hearing loss, macular degeneration, diabetic neuropathy, heart disease, osteoarthritis, cancer, Parkinson’s disease and myocardial ischemia.
RGA is also monitoring how RNA technology may influence the use of future gene therapy. As RNA is temporary and transcribes DNA, its focus is on the underlying cause of a condition. As a result, it could provide health and life improvement advantages similar to gene therapy. That said, use of RNA comes with benefits over that of one-time gene therapies, such as the ability to change treatments over time if something better comes along, or to slow or stop use if a safety concern arises. RNA also comes with financial benefits to the manufacturer of having a longer-term financial stream of payments for its use.
Although some gene therapies may not ultimately be cures, they have great potential to improve quality of life for patients and their families, and even perhaps extend patient lifespans. The FDA is enthusiastic about its ability to benefit patients and the pharmaceutical industry with speedier approvals of gene therapies.
The major concern over patient access to gene therapy now is financial. Wall Street is not optimistic about most of the companies developing these technologies, and the financial outlook for the overall biotech industry continues to be negative. Many companies in the gene therapy field now have historically low stock values, and layoffs at these and other biotech firms have been quite high. Many of the smaller firms developing these therapies need a well-capitalized pharmaceutical manufacturer to either purchase the company or the therapy in order for the treatment to achieve successful commercialization, but acquisition activity like this has been historically low.
Gene therapy prices are high and are expected to increase further. The expectation is that the $4 million ceiling will likely be broken in 2024. These high price tags will be a challenge for state and federal governments as well as commercial health plans. If patients are hesitant to use the current suite of gene therapy treatments or insurance plans are hesitant to cover them, the outlook for access to these and future gene therapy treatments could be at risk. Indeed, certain clinical trials were abandoned last year on financial grounds.
Final thoughts
Ever since the first gene therapy was approved seven years ago, this class of treatment has clearly shown its potential to be a positive game-changer for many diseases, both rare and not. The science is, however, still in early phases, with much more research and development needed to explore benefits and risks. Each gene therapy has its own profile of effectiveness, durability and safety. Thus far, stop-loss carriers and reinsurers have by and large stepped up to underwrite coverage for gene therapies, as well as helping payers understand the value that these treatments may bring. It is important, though, that all of the risks be clear. Monitoring the outcomes of each treatment in this emerging category of coverage is important for every health plan.
Kristi Bohn, FSA, MAAA, is Vice President and Lead Actuary, Health Excess, U.S. Group Reinsurance, RGA; and Melinda Baxter, R.N., MSN, CCM, is Director, ROSE Program, U.S. Group Reinsurance, RGARGA helps pool outlier risks more broadly so as not to threaten income and capital. Please email us (kristi.bohn@rgare.com, mbaxter@rgare.com) if you are interested in more information.