Solutions to Mitigate the Cost of Gene Therapies

Financial Protection Programs Offer Payors Options

BRIEFING
May 21, 2020
Vice President, Health Strategy and Innovation, CVS Health
Senior Vice President, CVS Health and Chief Medical Officer, CVS Caremark

Numerous gene therapies are in various stages of development for a wide range of conditions, which were previously untreatable or at least incurable. These innovative treatments bring great hope and promise for patients and their families. However, the therapies approved so far are expensive — the most expensive north of $2 million for a single dose. Future treatments are likely to continue that trend, and if they do, it could have a large — immediate and long-term — impact on clients and the nation’s health care system. Many of these conditions currently require lifetime care and treatment and that can be expensive but the cost impact is spread out over a long period. With very expensive gene therapies, payors face a large one-time cost that — even accounting for only a few members needing the treatment — could put a small or self-insured employer out of business. This may lead some to exclude coverage.

Our role is to reduce the costs of therapy, while ensuring appropriate utilization of cutting-edge therapies.

Stakeholders across the industry are working to find ways to mitigate the cost impact of gene therapies and ensuring that patients have appropriate access to them including payment plans and value-based contracting. As we enter the era of a “new normal” precipitated by the COVID-19 pandemic, our health care system will be even more focused on the delivery of accessible, high-value care.

The role of CVS Health — and Aetna as a health insurer — is to reduce the costs of therapy, while ensuring appropriate utilization of cutting-edge therapies. We are exploring various approaches to help our clients address the impact of gene therapies.

Solutions to Mitigate Large One-Time Cost Impact

In addition to refining foundational medical and pharmacy benefit strategies, we are developing various approaches to help payors mitigate what could be a detrimental impact from a large one-time cost for gene therapy treatment for one or a few plan members.

In April, we began offering two financial protection solutions to payors:

Checkmark Stop-loss offers eligible clients financial protection against unexpected, high-cost gene therapy claims.*
Checkmark Installment Payment Plan allows eligible clients to pay for a gene therapy over several years, mitigating the immediate financial impact of the claim/smoothing the impact of an immediate large incurred cost.

Both products may offer clients an alternative to excluding high-cost gene therapies.

 Financial Protection Program Through Stop-loss

This solution is available to self-funded CVS Caremark pharmacy benefit management clients without an active Stop-loss policy. Clients can choose a policy for gene therapy coverage with three different deductible options, and coverage includes the cost of the gene therapy product.**

 Installment Payment Plan

The plan is available for select FDA-approved gene therapy products dispensed through CVS Specialty and spreads payments of high-cost claims over several years. The solution offers client-specific payment terms.***

Approaches to Reduce the Cost Impact of Gene Therapies

For more information about how such programs can help mitigate the cost impact on payors, download our Gene Therapy White Paper >
For more information about how such programs can help mitigate the cost impact on payors, download our Gene Therapy White Paper >

In addition to financial protection programs, there are other potentially complementary approaches health plans and employers can utilize to reduce the cost impact of gene therapies including extending a model such as Aetna’s National Medical Excellence Program to gene therapy, value-based contracting, and an evolution of the role of specialty pharmacy to encourage direct dispensing to prevent costs increasing because of the practice known as “buy-and-bill.”

Making sure gene therapy-based treatments are accessible for all those who need them requires innovative partnerships, as well as new ways of providing health insurance and pharmacy benefit design. Without solutions to help payors manage the cost, some may make the choice to exclude coverage, which could jeopardize patient access to these potentially life-saving medications.

Want to learn more about how to mitigate the potential cost impact of gene therapies? Ask Us
BRIEFING
May 21, 2020
Vice President, Health Strategy and Innovation, CVS Health
Senior Vice President, CVS Health and Chief Medical Officer, CVS Caremark

*Stop-loss coverage is provided by Aetna Life Insurance Company and its affiliates (Aetna). Aetna is a member of the CVS Health family of companies.

**Associated costs including facility and physician charges, which are covered by the client’s base medical plan are not included. Members must receive the gene therapy product through Aetna’s network of gene therapy providers in order to qualify for gene therapy Stop-loss reimbursement.

***Clients are responsible for the entire cost, regardless of whether the beneficiary is still covered under their plan. Clients are required to sign an addendum and promissory note that outline all payment plan terms.

Data source, unless noted otherwise, CVS Health Enterprise Analytics, 2020.

Pipeline Services projections, data 2020 through 2023, as of May 11, 2020.

This document contains references to brand-name prescription drugs that are trademarks or registered trademarks of pharmaceutical manufacturers not affiliated with CVS Health.

Image source: Licensed from Getty Images, 2020.

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