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3 Ways to Cut Payer, Employer Gene Therapy Healthcare Spending

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By Kelsey Waddill

The report outlined three techniques for covering high cost gene therapies.

One approach is to use value-based contracting to reduce the risk for payers and purchasers.

From Medicaid programs to private insurers, this approach has gained traction among payers in recent years. Different forms of value-based contracts have developed to help manage gene therapy healthcare spending through patient outcomes, such as the “subscription model.”

In 2019, a number of Medicaid programs adopted a subscription model for acquiring prescription treatments for hepatitis C and other conditions. Oklahoma, Michigan, Colorado, Washington, and Louisiana all received CMS approval for plans that took this approach.

“Though the drug may promise to cure these patients for life, these are early days in their use,” said Joanne Armstrong, MD, enterprise head of women’s health and genomics at CVS Health. “What we’re saying is, show us the clinical value proposition first.”Though the Medicaid programs jumped on this model because it made healthcare spending more predictable, value-based contracting still has its risks. Payers and manufacturers risk overestimating or underestimating the number of doses that the payer is purchasing due to limited data, a RAND Corporation study found.The value-based contracts may also be complex, CVS Health warned. In these […]

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