Blue Cross Blue Shield insurers have become the first carriers to cover multimillion-dollar new gene therapies for sickle cell disease, and other insurers and Medicaid agencies are moving to follow suit.
Blue Cross' Synergie Medication Collective has inked risk-sharing agreements with drugmaker BlueBird Bio to offer its $3.1 million Lyfgenia gene therapy treatment for sickle cell disease to some self-insured employers, as well as competitor Vertex Pharmaceuticals' $2.2 million Casgevy treatment. The Food and Drug Administration greenlighted the treatments in December.
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High prices could bankrupt companies writing checks for these treatments and Synergie is balancing the gene therapies' big upfront costs with potential long-term benefits by sharing risk with manufacturers and directing patients to specific providers.
With these agreements, drugmakers struggling to turn a profit on new treatments for rare diseases are also making a bet that their pioneering therapies will replicate the results from clinical trials in the real world.
The high stakes represent the new norm in healthcare contracting as expensive gene therapies increasingly come to market. “Our goal is to have an effective outcomes-based contract for every gene therapy on the market,” Synergie CEO Jarrod Henshaw said.
Costly treatment
Sickle cell disease is a genetic disorder in which red blood cells' shape alters to resemble a crescent moon, leading to blocked veins, excruciating pain, potential organ failure and early death. It affects 100,000 Americans, the majority of whom are Black and covered under Medicaid.
Treatment for these patients often fails to reach national standards, said Dr. Lewis Hsu, director of the pediatric sickle cell program at the University of Illinois Chicago and chief medical officer at the Sickle Cell Disease Association of America, a patient advocacy group.
Patients suffering from acute sickle cell pain often visit the emergency room for care and, because they do not show outside symptoms--such as a broken bone--hospital staff do not prioritize their treatment, he said. Staffers sometime accuse patients of being drug addicts, he said.
Some medications can reduce the disease’s severity, but it can be hard for patients to obtain them and none are intended as a cure. Stem cell transplants represent the gold standard for treatment, but that comes with significant risk and requires patients to find a suitable donor.
Since the FDA approved treatment in 1984, about 1,200 individuals have received a stem cell transplant for sickle cell, according to a July article in the National Center for Biotechnology Information journal.
Black Americans are one of the least likely ethnic groups to find a fully matched donor despite being the most affected by the disease, with fewer than 30% able to find a perfect match, according to a study published last August in the Transplantation and Cellular Therapy journal.
“There’s a lot of things that we could do for sickle cell that are not being done,” Hsu said.
Price problems, solutions
New gene therapies intended as cures could dramatically improve life for those living with sickle cell.
Through Synergie’s deal, self-insured employers can pay Blue Cross plans an undisclosed fee to cover sickle cell treatments for their workers through their stop-loss policies, Henshaw said. Synergie has worked with Blue Cross plans to pool about 10 million patients’ lives, though it’s unclear exactly how many will use Lyfgenia.
Synergie did not provide details on how many plans are currently participating. Synergie promises to pay drugmakers the full cost of the drug, so long as they agree to give the company a full or partial refund if certain patient outcomes are not met, Henshaw said.
Synergie has contracted with Blue Cross companies' Evio to help navigate sharing risk with drug manufacturers, and with BCS Financial to help structure its stop-loss policy. It is also working with independent vendor Emerging Therapy Solutions to direct patients to preferred treatment facilities.
Bluebird’s agreement with Synergie lasts three years and is tied to the number and cost of hospitalizations and emergency department visits Lyfgenia patients experience for acute pain events, a Bluebird spokesperson said. Synergie was the first company to ink such an agreement with Bluebird, the spokesperson confirmed.
The company also finalized a similar deal with another payer that covers 100 million U.S. lives this month, which the spokesperson declined to name. Bluebird is also talking with 15 state Medicaid agencies about coverage, the spokesperson said.
Additionally, Bluebird is negotiating with the Centers for Medicare and Medicaid Services about inclusion in a pilot program whereby federal regulators would broker payment agreements with drug manufacturers that could be used by all state Medicaid agencies. Bluebird said it anticipates CMS will implement the Cell and Gene Therapy Access Model next year. CMS did not respond to an interview request.
Despite the increased coverage, the drugmaker is still struggling to build a profitable business around its gene therapies. Bluebird in January projected it only has enough money to last until the first quarter of 2025. The company listed financial sustainability as a “going concern.”
"Everyone's trying to figure out how to manage the affordability and access of these drugs because they're just different than traditional drugs from a price perspective and from a complexity perspective," Henshaw said.
Questions remain about whether public and private payers covering Bluebird and Vertex's therapies will receive a return on their investment.
The average lifetime cost of a commercially insured sickle cell patient is $1.7 million, according to a January 2023 study published in the Blood Advances journal. Both Bluebird and Vertex have estimated the lifetime cost of managing sickle cell for someone with recurrent pain crises to be between $4 million and $6 million.
Bluebird and Vertex’s treatments could be considered reasonably priced at $2 million, according to the Institute for Clinical and Economic Review, a nonprofit that reviews the cost-effectiveness of drugs.
Gene therapy manufacturers have inked payer deals similar to Synergie's, which have improved patient access to drugs without lowering list prices.
For example, shortly after winning FDA approval in 2018, Spark Therapeutics entered into outcomes-based contracts for Luxturna–an $850,000 gene therapy that treats a rare form of blindness–with nonprofit insurer Point32Health and Cigna's Express Scripts pharmacy benefit manager. Luxturna's sticker price has remained steady since.
Insurers are likely weighing both the potential financial and social costs when it making gene therapy coverage decisions, Hsu said.
“‘How come you’re not going to pay for that, what kind of cave are you living in?’ That’s probably what [insurers] are hearing,” Hsu said. “Adding to that is that sickle cell disproportionately affects Black and brown people. It would be social injustice for sure if you did not cover it.”