After the thrill of approval has worn off and press coverage has faded, producers of gene therapies will be left with the challenge of getting their products to patients and getting paid for it. They’ll need to be able to modify cells and viruses with novel technologies and specialized staff. They will need to be able to distribute highly sensitive treatments while keeping patients informed about where they are in the process. They will need to be able to satisfy payers and providers with novel payment and support models to ensure these therapies are viewed as good science – and, critically, a good deal.
A war for manufacturing capacity will strain production capacity, making acquisitions or partnerships attractive options: As an increasing number of companies enter the gene therapy space, competition for contract manufacturing organization production capacity will increase, potentially raising costs or limiting its usefulness as an option.
The advanced therapies field is expected to grow rapidly over the next few years. The FDA has said it expects to receive more than 200 investigational new drug applications per year for gene and cell therapies starting in 2020, and by 2025 it expects to approve between 10 and 20 cell and gene therapy products per year.
Demand for these gene therapy manufacturing services is likely to increase due to the number of active or recruiting trials. Greater competition for existing manufacturing capacity likely will result in higher costs or scarcer supplies for customers, and companies may need to make investments into manufacturing technologies – or purchases of companies for their manufacturing expertise – to ensure they are able to compete or gain an edge over other players.
For gene therapies, commercial success may require novel reimbursement models that can assure payers – and patients – that the therapies are worth their often-high prices. Already, companies are offering innovative pricing models to ease market access, including multiple payment models for single therapies. Outcomes-based contracts may be especially important to insurers worried about paying six- or seven-figure prices for a therapy that might not work. This is especially true just after approval, when there is a relative lack of real-world use data.
Gene therapy companies should expect many hurdles to commercialization that are likely to slow down launches – insurance coverage, site certification, staff training, reimbursement and patient identification among them – and will need to begin identifying those hurdles and develop processes and systems with which to clear them.
Even with these systems in place, companies may encounter significant challenges despite the small patient populations they intend to treat. Based on an HRI analysis of historical data and consensus forecasts for the sales of FDA-approved gene therapy products, these products can expect to realize less than half of their expected peak sales in the first two years, with some first-year products achieving less than 20 percent of peak expected sales.
Gene therapy companies often must rely on a robust supply chain with advanced capabilities, from collection of the cells from a patient to administration of the treatment. Key among these capabilities is a “cold chain” ensuring products are stored at the right temperature and handled properly from manufacturer to patient or vein-to-vein. A single temperature failure in the supply chain could render the product useless, even dangerous.
Companies also will need to comply with FDA serialization requirements, or “track and trace.” Under “track and trace,” each product is affixed with information to track its chain of custody. Companies also will want to ensure the packaging used to transport each product is tagged with technologies capable of tracking logistical information. This information may include the time each product spent in an entity’s custody, temperature of the product, whether the product packaging was opened and other information.
Even if a treatment is available, patients may have to travel far to obtain treatment, according to an analysis by HRI. There are just five ZIP codes in the US in which a patient would be able to receive all four approved gene therapy products.
Karen C. Young
US Pharmaceutical and Life Sciences Leader, PwC US
Global Pharmaceutical and Life Sciences Advisory Leader, PwC US