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	<title>Cell and Gene Therapy | Avalere Health Advisory</title>
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		<title>Social Determinants May Affect Access to CAR-T Treatment</title>
		<link>https://advisory.avalerehealth.com/insights/social-determinants-may-affect-access-to-car-t-treatment</link>
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		<dc:creator><![CDATA[Leah Keller]]></dc:creator>
		<pubDate>Thu, 29 Aug 2024 15:37:47 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=32977</guid>

					<description><![CDATA[<p>Chimeric antigen receptor T-cell (CAR-T) treatments first came to market in 2017, and since then there has been rapid development and advancement bringing these innovative treatments to a broader set of patients. As of the mid-2024, there are six CAR-T treatments targeting blood cancers. However, the promise of CAR-T has been accompanied by challenges for&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/social-determinants-may-affect-access-to-car-t-treatment">Social Determinants May Affect Access to CAR-T Treatment</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>Chimeric antigen receptor T-cell (CAR-T) treatments first came to market in 2017, and since then there has been rapid development and advancement bringing these innovative treatments to a broader set of patients. As of the mid-2024, there are six CAR-T treatments targeting blood cancers. However, the promise of CAR-T has been accompanied by challenges for patient access due to a range of factors, including a limited set of treatment sites, an uncertain reimbursement landscape, a complex supply chain, an extended period of follow-up care, and financial costs that extend beyond drug costs. These unique access barriers for CAR-T must be considered through a health equity lens to better understand the appropriate solutions that should be pursued to bolster access for eligible patients.</p>
<p>Avalere is building on prior <a href="https://advisory.avalerehealth.com/insights/socioeconomic-factors-may-impact-patient-access-to-cell-therapies">research</a> to analyze treatment barriers for patients diagnosed with a broad set of five cancer types that may be treated using on-market CAR-T treatments. The five indications are diffuse large b-cell lymphoma (DLBCL), acute lymphoblastic leukemia (ALL), multiple myeloma (MM), follicular lymphoma (FL), and mantle cell lymphoma (MCL).</p>
<p>In this analysis, Medicare fee-for-service (FFS) beneficiaries with relevant diagnoses were subdivided into distance-based cohorts determined by driving time from home ZIP codes to CAR-T treatment sites. Avalere assessed demographic and socioeconomic factors to understand differences across cohorts that may influence access to care and/or require new approaches to support access that are not based solely on distance.</p>
<p>Avalere found persistent trends across all five conditions showing that patients living nearest to a treatment site were disproportionately likely to be Black or Hispanic compared to the patient population further from a treatment site. Additionally, patients living in areas nearest to treatment sites had lower levels of vehicle ownership and fewer adults per household. Income data showed differences between earnings for White individuals and Black or Hispanic individuals, demonstrating that “need” cannot be easily defined based on proximity to a treatment site and therefore novel forms of support could be necessary.</p>
<h2>Background</h2>
<p>Treatment with CAR-T products is currently provided in a subset of hospitals with the experience and training necessary to ensure safe and effective care, including management of any potential adverse events. In this analysis, a subset of Foundation for the Accreditation of Cellular Therapy (FACT)-accredited sites that provide immune effector cell therapy were considered as potential CAR-T treatment locations. Policy and regulatory attention has generally been focused on alleviating access barriers for eligible rural patients who may need to travel significant distances, since many FACT-accredited sites are in urban areas with large hospital systems or academic medical centers. However, other factors may impact access for the populations of potential CAR-T patients living close to a treatment center in urban or suburban communities.</p>
<h2>Analysis Findings</h2>
<p>The defined patient cohort in the analysis was enrolled in Medicare FFS between 2018 and 2021. There were no restrictions applied to the cohort based on the line of therapy or disease progression. Therefore, the analysis captures all DLBCL, ALL, MM, FL, and MCL patients, including those who may not be currently eligible for CAR-T treatment.</p>
<p>Given the rapid development in the CAR-T market and the progression to manage disease as an earlier line of therapy, reviewing a broader set of patients who may present as eligible for future treatment was warranted. This analysis focused on individual- and community-level factors(race/ethnicity, income, household size/composition, and vehicle ownership to) better understand potential needs for patients based on how far they live from treatment sites. This assessment was undertaken with the goal of identifying compounding factors (e.g., additional to drive time to a treatment site) that could contribute to access barriers.</p>
<p>Key findings include:</p>
<p><strong>Differences in Indications by Proximity to Treatment Center:</strong> Proximity to treatment centers was consistent across all five indications, with the greatest variations in the &lt;30 minute range and the 60–120 minute range. Notably, more than 50% of patients in every indication live within one hour of a cell therapy treatment site (Figure 1).</p>
<h2>Figure 1. Potentially Eligible Patient Breakdown Per Cancer Type by Distance to Nearest Treatment Center (2018–2021)</h2>
<p><img loading="lazy" decoding="async" class="alignnone wp-image-32978 size-full" src="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-1-e1724944734757.png" alt="" width="960" height="409" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-1-e1724944734757.png 960w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-1-e1724944734757-300x128.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-1-e1724944734757-768x327.png 768w" sizes="auto, (max-width: 960px) 100vw, 960px" /></p>
<p><strong>Differences in Race/Ethnicity by Proximity to Treatment Center:</strong> When comparing patients across indications, there was a higher percentage of non-White patients diagnosed with MM and ALL, particularly in the cohort less than 30 minutes from a treatment site (Figure 2).</p>
<p>Consolidating all the patients from the five indications and focusing breakdown of race across the distance-based cohorts, highlights the difference in patient populations living within 30 minutes of treatment centers and patients living greater than 60 minutes from a treatment center. Within 30 minutes of a treatment site, 15% of patients are Black and 73% of patients are White compared to the cohort greater than two hours from a treatment site, where 6% of patients are Black and 88% of patients are White. This shows that, proportionally, a greater percentage of Black patients are closer to a treatment site while a greater percentage of White patients are in rural areas.</p>
<p>Nearly half (43%) of patients who are Black and 46% of patients who are Hispanic live within 30 minutes of a treatment site compared to only 25% of patients who are White.</p>
<h2>Figure 2. Potentially Eligible Patient Breakdown Per Cancer Type by Race (2018–2021)</h2>
<p><img loading="lazy" decoding="async" class="alignnone wp-image-32979 size-full" src="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-2-e1724944898838.png" alt="" width="960" height="436" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-2-e1724944898838.png 960w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-2-e1724944898838-300x136.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-2-e1724944898838-768x349.png 768w" sizes="auto, (max-width: 960px) 100vw, 960px" /></p>
<p><strong>Differences in Caregiver Availability:</strong> In an assessment of household characteristics, Avalere found that potential CAR-T patients living nearest a treatment site were from areas with a higher share of single householders (44%) compared to those who live more than 30 minutes from a treatment site (38–39%), potentially indicating lower availability of caregiver support in the home, which could be integral during the pre- and post-operative periods around CAR-T treatment.</p>
<p><strong>Transportation Options</strong>: Compared to patients living more than 30 minutes from a treatment site, those living in closer proximity were from areas with lower levels of vehicle ownership (10–12% of households with no vehicle across all five indications) (Figure 3).</p>
<h2>Figure 3. Households without Vehicles by Cancer Type and Distance to Nearest Treatment Center (2018–2021)</h2>
<p><strong><img loading="lazy" decoding="async" class="alignnone wp-image-32982 size-full" src="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-3-e1724945743784.png" alt="" width="960" height="329" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-3-e1724945743784.png 960w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-3-e1724945743784-300x103.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-3-e1724945743784-768x263.png 768w" sizes="auto, (max-width: 960px) 100vw, 960px" /></strong></p>
<p><strong>Differences in Income</strong>: Black and Hispanic patients living less than 30 minutes from a treatment site were from areas with lower median household incomes than White patients in the same cohort, indicating potential cost barriers and higher need among minority patients close to treatment centers (Figure 4) . Median household income for Black patients within 30 minutes of a treatment site was $58,741, and Hispanic patients earned $64,228, compared to $87,794 for White patients. In general, incomes for Black and Hispanic patients were lower than those of White patients in all distance cohorts.</p>
<h2>Figure 4. Income of Cohorts by Race/Ethnicity (2018–2021)</h2>
<h2><img loading="lazy" decoding="async" class="alignnone wp-image-32980 size-full" src="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-4-e1724945206437.png" alt="" width="960" height="516" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-4-e1724945206437.png 960w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-4-e1724945206437-300x161.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/CAR-T-graphic-4-e1724945206437-768x413.png 768w" sizes="auto, (max-width: 960px) 100vw, 960px" /></h2>
<h2>Key Considerations for Patient Support and Policy</h2>
<p>The findings of this analysis build on prior observations related to access in the CAR-T space, with implications across stakeholders:</p>
<ul>
<li>The findings highlight the need to approach CAR-T access in a holistic manner that accounts for barriers other than distance from a treatment site. Additionally, solutions pursued with a goal of improving access should be evaluated for unintended consequences or potential for creating/exacerbating disparities. For example, among patients living near a treatment site, there may be an acute need for wraparound services (e.g., rides to treatment centers, temporary on- or near-campus housing at treating sites, respite for caregivers, health aide assignment in absence of family caregivers, meal delivery for low-income patients while in treatment). These services could be coordinated and provided by a combination of treating sites, health plans, manufacturers, and other organizations that serve patients.</li>
<li>There are a <a href="https://pubmed.ncbi.nlm.nih.gov/36130152/">range of factors</a> that may impact uptake of a CAR-T treatment, including provider reimbursement, out-of-state travel for treatment, and manufacturing capacity/supply chain. This research shows that even among populations viewed as facing fewer barriers to treatment due to their relative proximity to treatment locations, access to CAR-T can be impeded by other factors such as affordability, transportation options, and lack of caregiver support. Successful patient access strategies are likely to be those that provide patients with multiple options for support and incorporate considerations related to patient age, language, race and ethnicity, and income.</li>
<li>Policymakers should consider whether current regulatory barriers limit support options for patients living at different distances from treatment centers and assess the impact of amending existing policies, or creating exemptions, to allow stakeholders to more effectively address social determinants of health and non-physical barriers to accessing care.</li>
</ul>
<h2>Methodology</h2>
<p>Using 2018–2021 data, Avalere identified a population of previously treated MM patients. Medicare FFS beneficiaries were identified using the 100% file of Medicare FFS Parts A and B data, accessed via a research-focused data use agreement with the Centers for Medicare &amp; Medicaid Services; commercial, Medicare Advantage, and Medicaid managed care members were identified using medical claims from the Inovalon MORE<sup>2</sup> Registry®, a large scale, real-world multi-payer dataset comprising medical, pharmacy, and lab claims, as well as clinical data on more than 332 million de-identified patients. Patients were identified with one of following five indications: acute lymphoblastic leukemia, diffuse Large B-cell lymphoma, follicular lymphoma, mantle cell lymphoma, and multiple myeloma.</p>
<p>Identified ALL, DLBCL, FL, MCL, and MM, patients were placed into distance-based cohorts using average drive time calculations to the closest prospective treatment site. Avalere leveraged the Acxiom’s InfoBase® Geo files database and the American Community Survey to assess socioeconomic factors in the relevant geographic areas in which each individual resides.</p>
<p><em>Funding for research provided by PhRMA. Avalere Health retained full editorial control.</em></p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/social-determinants-may-affect-access-to-car-t-treatment">Social Determinants May Affect Access to CAR-T Treatment</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Examining Variation in Gene Therapy Access Across States</title>
		<link>https://advisory.avalerehealth.com/insights/examining-variation-in-gene-therapy-access-across-states</link>
					<comments>https://advisory.avalerehealth.com/insights/examining-variation-in-gene-therapy-access-across-states#_comments</comments>
		
		<dc:creator><![CDATA[Lisa Murphy]]></dc:creator>
		<pubDate>Tue, 27 Aug 2024 17:33:22 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=32947</guid>

					<description><![CDATA[<p>The Medicaid Drug Rebate Program (MDRP) requires state Medicaid programs to cover outpatient drugs produced by participating manufacturers for all medically accepted indications. In general, covered outpatient drugs include those administered in an outpatient setting as well as drugs administered in an inpatient setting when paid for separately. However, within these federal requirements, states are&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/examining-variation-in-gene-therapy-access-across-states">Examining Variation in Gene Therapy Access Across States</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>The Medicaid Drug Rebate Program (MDRP) requires state Medicaid programs to cover outpatient drugs produced by participating manufacturers for all medically accepted indications. In general, covered outpatient drugs include those administered in an outpatient setting as well as drugs administered in an inpatient setting when paid for separately. However, within these federal requirements, states are granted flexibility to administer their Medicaid programs. As a result, approaches to Medicaid coverage, management, reimbursement, and financing of innovative therapies varies among states.</p>
<p>To understand this variability, Avalere analyzed gene therapy coverage, reimbursement, management, and access across 12 state Medicaid programs (AZ, CA, FL, IN, LA, MA, MI, NC, NY, OR, TX, WA). The analysis examined Medicaid coverage and reimbursement policies for four gene therapies that were approved between 2017 and 2023. The research was conducted for each state’s Medicaid fee-for-service (FFS) program and for the largest managed care organization (MCO) in each state. In addition, Avalere assessed state management approaches, use of innovative financing, treatment center availability, out-of-state coverage policies, and coverage of ancillary services (e.g., travel, lodging).</p>
<p><strong>Medicaid Coverage and Management Policies for Innovative Therapies</strong></p>
<p><strong><em>State Management of Gene Therapies:</em></strong></p>
<p>States may determine which entities—the state FFS program or MCOs—are responsible for coverage and management of gene therapies.</p>
<ul>
<li><strong>Carve In</strong>: In eight of the assessed states (AZ, FL, LA, MA, NC, NY, OR, TX), gene therapies are carved into MCO contracts, meaning the MCO is responsible for covering and bearing risk for gene therapy costs. In two of these states (AZ, TX), the state mitigates MCOs’ risk by reimbursing them for some or all of the cost of certain high-cost drugs and services.</li>
<li><strong>Carve Out</strong>: The remaining four states (CA, IN, MI, WA) carve gene therapies out of MCO contracts and manage them entirely through FFS. The specific drugs subject to these carve outs vary from state to state. For example, IN carves out certain high-cost drugs from MCO contracts while CA carves out all care for certain high-cost conditions (e.g., hemophilia).</li>
</ul>
<p><strong><em>Clinical Coverage Policies:</em></strong> Clinical coverage policies set coverage requirements for gene therapies, and those requirements inform patient access. Across all assessed state FFS programs, MCO plans, and drugs, clinical coverage criteria are publicly available in approximately two-thirds of instances. Of these publicly available policies, about two-thirds contain requirements that are more restrictive than the products’ FDA labels (Figure 1), which could limit coverage to fewer patients than defined by the FDA. These requirements are typically based on products’ clinical trial inclusion and exclusion criteria. In addition, although states are required to cover outpatient drugs of manufacturers that participate in the Medicaid Drug Rebate Program, one state (IN) has published a non-coverage policy for a gene therapy.  In some instances, MCO coverage policies are more restrictive than those implemented by the state FFS program. This practice has drawn the attention of <a href="https://www.gao.gov/products/gao-24-106532">federal a</a>gencies and <a href="https://www.casey.senate.gov/news/releases/casey-urges-medicaid-agency-to-crack-down-on-health-insurers-who-harm-patients-by-denying-coverage-of-medically-necessary-care">lawmakers</a>, as <a href="https://www.ecfr.gov/current/title-42/part-438/section-438.210#p-438.210(a)(5)(i)">federal regulation</a> requires MCO coverage policies to be no more restrictive than FFS policies.</p>
<p><strong>Figure 1: State Coverage of Assessed Gene Therapies</strong></p>
<p><img loading="lazy" decoding="async" class="alignnone wp-image-32952" style="color: var(--wpex-text-2); font-family: var(--wpex-body-font-family, var(--wpex-font-sans)); font-size: var(--wpex-body-font-size, 13px);" src="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/Insight-Graphic-300x133.png" alt="" width="1022" height="453" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2024/08/Insight-Graphic-300x133.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/Insight-Graphic-1024x455.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/Insight-Graphic-768x341.png 768w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/Insight-Graphic-1536x682.png 1536w, https://advisory.avalerehealth.com/wp-content/uploads/2024/08/Insight-Graphic-2048x910.png 2048w" sizes="auto, (max-width: 1022px) 100vw, 1022px" /></p>
<p><strong>Reimbursement for Gene Therapies Across Medicaid FFS and MCOs</strong></p>
<p>Generally, states reimburse for gene therapies either using a bundled payment methodology (e.g., diagnosis related group) or following a methodology that reimburses for the cost of the gene therapy separately from other costs (e.g., patient care). Bundled payments reimburse for all services provided during an encounter at a set rate based on patient factors (e.g., diagnosis) and do not account for the number or types of services provided. The rates paid under these methodologies typically do not factor in the price of high-cost therapies and therefore may not always cover the costs of purchasing and delivering gene therapies.</p>
<p>More than half (56%) of FFS programs assessed in this analysis pay for gene therapies provided in the inpatient setting using bundled payments. Bundled payments are less common in the outpatient hospital setting, with 90% of assessed FFS programs using methodologies that pay for gene therapies provided in the outpatient setting separately from other costs.</p>
<p><strong>State Adoption of Innovative Contracting </strong></p>
<p>States are increasingly exploring innovative financing approaches to manage drug costs. Of the 12 assessed states, 10 have CMS-approved state plan amendments to allow value- or outcomes-based rebate agreements. In addition, at least five of the evaluated states (AZ, LA, MA, MI, WA) have entered into innovative contracts with pharmaceutical manufacturers. Three of these innovative contracts (AZ, MA, MI) are for gene therapies and are structured as outcomes-based agreements in which the manufacturer will provide additional rebates if certain clinical outcomes are not met.</p>
<p><strong>Ancillary Service and Out of State Coverage</strong></p>
<p>Gene therapies are typically administered in designated treatment centers or centers of excellence. For the gene therapies researched, there are no treatment centers available in many states, meaning many gene therapy patients would need to travel out of state to access care. While all states must cover out-of-state care and non-emergency medical transportation, the accessibility of information on this coverage varies. In addition, information on state coverage of ancillary services (e.g., lodging and meal support) to support travel for care is often limited. For example, while comprehensive information on travel, lodging, and meal support is available from IN Medicaid, patient-facing resources from CA Medicaid focus more on transportation.</p>
<p><strong>Considerations for Patient Access</strong></p>
<p>Variation in gene therapy management strategies can create differences in patient access across states. In states and MCOs without published clinical coverage policies, patients may face delays in care, particularly if a case-by-case review is needed. When published coverage policies are more restrictive than a product’s FDA label, a patient may not receive coverage, despite being eligible for a gene therapy per the product’s label. While states are generally <a href="https://www.macpac.gov/wp-content/uploads/2023/03/Chapter-3-Strengthening-Evidence-under-Medicaid-Drug-Coverage.pdf">required</a> to cover all of an MDRP-participating manufacturer’s products there are not specific federal requirements that either set timelines for clinical coverage policy publication or require that coverage criteria align with FDA labels. The absence of federal requirements can lead to differences in timelines of access for patients across states.</p>
<p>Differences in reimbursement methodologies across states may also have implications for patient access. Bundled payments often do not account for the cost of gene therapies, which could limit provider uptake and subsequently patient access. Separate payment policies, such as the one required under CMS’s <a href="https://advisory.avalerehealth.com/insights/understanding-the-cms-cell-and-gene-therapy-access-model">Cell and Gene Therapy Access Model</a>, aim to evaluate the link between provider reimbursement and gene therapy uptake and access.</p>
<p>State policies related to out-of-state treatment and ancillary services coverage are also likely to influence patient access, particularly when the limited availability of treatment centers requires patients to travel to receive care. While Medicaid programs must cover out-of-state care and non-emergency medical transportation, requirements around the publication of patient-facing and accessible information on these benefits are limited.</p>
<p><strong>Methodology</strong></p>
<p>Avalere assessed gene therapy management approaches across 12 state Medicaid programs. Using publicly available resources (e.g., state Medicaid program websites), Avalere identified clinical coverage and reimbursement policies for four on-market gene therapies. For each state, Avalere researched the state FFS program and the largest MCO. In instances where the same MCO parent organization was the largest MCO in two states, the second largest MCO was selected in one of the states. Information is current as of April 2024.</p>
<p><strong>Connect With Us</strong></p>
<p>To learn more about management of innovative therapies and the impacts for your business, <a href="https://pages.avalere.com/Insights.html">connect with us</a>.</p>
<p><em>Funding for research provided by the Pharmaceutical Research and Manufacturers of America (PhRMA). Avalere maintained editorial control.</em></p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/examining-variation-in-gene-therapy-access-across-states">Examining Variation in Gene Therapy Access Across States</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>CGT Payment Changes Proposed in FY 2025 IPPS Proposed Rule</title>
		<link>https://advisory.avalerehealth.com/insights/cgt-payment-changes-proposed-in-fy-2025-ipps-proposed-rule</link>
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		<dc:creator><![CDATA[Leah Keller]]></dc:creator>
		<pubDate>Wed, 24 Apr 2024 19:33:02 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=31916</guid>

					<description><![CDATA[<p>The Centers for Medicare &#38; Medicaid Services (CMS) proposes to continue using its Medicare Severity Diagnosis-Related Group (MS-DRG) for chimeric antigen receptor T-cell (CAR-T) treatment stays in fiscal year (FY) 2025. CMS also proposes to continue providing differential reimbursement based on whether a drug was provided as part of a clinical trial, with a significant&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/cgt-payment-changes-proposed-in-fy-2025-ipps-proposed-rule">CGT Payment Changes Proposed in FY 2025 IPPS Proposed Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>The Centers for Medicare &amp; Medicaid Services (CMS) proposes to continue using its Medicare Severity Diagnosis-Related Group (MS-DRG) for chimeric antigen receptor T-cell (CAR-T) treatment stays in fiscal year (FY) 2025. CMS also proposes to continue providing differential reimbursement based on whether a drug was provided as part of a clinical trial, with a significant overall increase proposed this year. The financial impact of changes in the FY 2025 Inpatient Prospective Payment System (IPPS) proposed rule would vary by hospital, and reimbursement could continue to fall short of fully recognizing provider costs of treatment in some cases. Substantial changes to New Technology Add-on Payments (NTAP) are proposed in this rule with implications for manufacturers preparing applications and for providers seeking additional reimbursement. In particular, manufacturers of recently launched gene therapies may benefit from changes to NTAP maximums. Comments on the rule are due on June 10, 2024.</p>
<h2>Background</h2>
<p>Since the first Food &amp; Drug Administration (FDA) approval of a CAR-T product in 2017, concerns have persisted over how the Medicare program would reimburse for these products, which are commonly administered in the inpatient setting and have a significant cost for providers (e.g., average sales prices exceeding $400,000). Hospital inpatient reimbursement is calculated on a case basis using an MS-DRG base payment rate that is adjusted for factors such as hospital geography, diagnosis, case severity, and discharge status. Additional reimbursement can be provided through <a href="https://advisory.avalerehealth.com/insights/how-a-new-technology-add-on-payment-works">new technology add-on payment</a> (NTAP) and outlier payments.</p>
<p>For FY 2024, inpatient stays with CAR-T treatment are currently assigned to MS-DRG 018, which has a base reimbursement rate of $257,958. Outlier payments are available to hospitals to cover extremely costly cases when the costs exceed the total of the MS-DRG payment, the NTAP amount (if applicable), and the current fixed-loss threshold of $42,750. Even with these adjustments, Medicare reimbursement for CAR-T cases today sometimes fails to cover total hospital costs, which could negatively impact provider uptake and patient access.</p>
<p>For FY 2025, CMS proposed several policies that would impact provider reimbursement for CAR-T and other cell and gene therapies (CGTs).</p>
<h2>Payment Changes for CAR-T Cases</h2>
<p>As a result of an increase to the base operating and capital rates for all IPPS payments and an increase in the proposed relative weight for MS-DRG 018, the proposed base payment for CAR-T cases in FY 2025 would increase by 6.4% to $274,413.</p>
<h2>High-Cost Outlier Payments</h2>
<p>The proposed fixed-loss threshold for FY2025 is $49,237, a 15% increase over the current threshold. For CAR-T cases, which are more likely than other inpatient stays to qualify for outlier payments, this would require hospitals to incur more losses before qualifying for an outlier payment. However, the higher overall MS-DRG base rate may mitigate some negative impacts.</p>
<h2>Adjustment for Clinical Trial Cases</h2>
<p>CMS reimburses CAR-T clinical trial cases, which do not incur drug costs, at a lower rate than non-clinical trial cases. Using its standard approach to analyze the latest update of the 2023 Medicare Provider Analysis and Review data, CMS found that clinical trial cases for CAR-T treatment incur 34% of the costs of non-clinical trial cases. Therefore, the agency proposes an adjustment factor of 0.34 to the relative weight of MS-DRG 018 for these cases (an increase over the current adjustment factor of 0.27). This would result in a base rate for clinical trial cases of $93,300, an increase of 34% over FY 2024.</p>
<h2>Product NTAP Assessments</h2>
<p>CMS is evaluating several CGT products for potential NTAP status in FY 2025. However, none of these products are anticipated to map to MS-DRG 018:</p>
<ul>
<li>Exa-cel (Casgevy<sup>TM</sup>) for the treatment of sickle cell disease (SCD)</li>
<li>Lovo-cel (Lyfgenia<sup>TM</sup>) for the treatment of SCD</li>
<li>Donislecel-jujn (Lantidra<sup>TM</sup>) for the treatment of type 1 diabetes</li>
<li>Lifileucel (AMTAGVI<sup>TM</sup>) for the treatment of melanoma</li>
</ul>
<h2>NTAP Eligibility Changes</h2>
<p>CMS proposed several changes related to NTAP eligibility and payment, which could impact future NTAP submissions and products being considered for NTAP in FY 2025:</p>
<ul>
<li>Starting in FY 2026, CMS proposes to revise the newness period assessment of products receiving NTAP based on an October 1 cutoff rather than April 1, broadening the window in which products are deemed to still be in their newness period.</li>
<li>CMS proposes a change to its rule that requires applicants to have a “complete and active” FDA market authorization request prior to applying for NTAP to no longer consider “hold status” to be an inactive status for the purposes of eligibility in FY 2026.</li>
</ul>
<h2>NTAP Maximum Payments</h2>
<p>CMS proposes to increase the maximum NTAP payment for gene therapies treating sickle cell disease (SCD) from 65% to 75% of product costs. Currently, the only other products subject to the 75% maximum are Qualified Infectious Disease Products or products approved under the Food and Drug Administration’s Limited Population Pathway for Antibacterial and Antifungal Drugs (LPAD).</p>
<h2>Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Proposed FY 2025 vs. Final FY 2024</h2>
<p><img loading="lazy" decoding="async" class="alignnone wp-image-31923 size-full" src="https://advisory.avalerehealth.com/wp-content/uploads/2024/04/ipps2.png" alt="" width="760" height="448" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2024/04/ipps2.png 760w, https://advisory.avalerehealth.com/wp-content/uploads/2024/04/ipps2-300x177.png 300w" sizes="auto, (max-width: 760px) 100vw, 760px" /></p>
<p><span style="font-size: 10px;"><em>FR: Final Rule; PR: Proposed Rule. </em></span><br />
<span style="font-size: 10px;"><em>Assumptions: </em></span><br />
<span style="font-size: 10px;"><em>• Hospital charges for CAR-T episode are kept constant across all examples, consistent with the geometric mean charges included in the FY 2025 Proposed Rule after outliers removed (AOR) file ($1,557,682)</em></span><br />
<span style="font-size: 10px;"><em>• Hospital has an average operating and capital cost-to-charge ratio of 0.3, which influences CMS calculations of hospital costs.</em></span><br />
<span style="font-size: 10px;"><em>• Hospital receives add-on payments that stem from payments for indirect medical education adjustment (IME) and disproportionate share hospital (DSH) adjustments, which are calculated as a percentage of the base MS-DRG. In this figure, there is an assumed IME factor of 0.2 and DSH adjustment of 0.05</em></span><br />
<span style="font-size: 10px;"><em>• Hospital area wage index is 1.0, meaning no adjustment is made to the labor-related share of the standardized amount.</em></span><br />
<span style="font-size: 10px;"><em>• Hospital received outlier payment, which is only made once hospital losses exceed the fixed-loss amount. Outlier payments provide 80% of excess costs beyond this threshold.</em></span></p>
<h2>Key Considerations</h2>
<p>Stakeholders should consider several implications stemming from proposed FY 2025 changes for existing assets and for future cell and gene therapies.</p>
<ul>
<li><strong>Stability of MS-DRG 018: </strong>While the proposed FY 2025 base rate for MS-DRG 018 would represent an <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-updated-in-ipps-final-rule">increase over FY 2024</a>, continued growth in the proposed fixed-loss threshold may reduce benefits for inpatient stays that incur an outlier payment. Total reimbursement will vary by hospital and case, with adequate reimbursement in some cases but potential financial risk for hospitals on significantly costly cases. The number of cases represented in the data to set the base rate increased this year (to 1,099), reflecting more on-market products and increased utilization. In the future, inclusion of additional immunotherapies may lead to fluctuations in the base rate and may lead CMS to consider splitting the MS-DRG depending on the number of cases and differences in resource costs. In this proposed rule, CMS did note that a request to rename MS-DRG 018 to recognize the use of “other autologous gene and cell therapies,” CMS did not propose any revisions and is current proposing continued use of its broader “Other Immunotherapies” language. With a robust <a href="https://advisory.avalerehealth.com/insights/pipeline-transformative-therapies-may-require-payment-model-innovation">pipeline</a> of cell and gene therapies, CMS may have to confront reimbursement challenges or consider alternative approaches.</li>
<li><strong>NTAP Eligibility: </strong>Several significant changes for NTAP eligibility are proposed in this rule. The proposal to move the newness period cutoff to October 1 would increase the time that providers may benefit from NTAP payments, which may help to support uptake of these products. Additionally, the proposal to make an exception for products with “hold status” when assessing whether a product has an “active” marketing authorization request would likely benefit manufacturers and recognizes that a hold status may be brief and therefore may not preclude a product from NTAP consideration.</li>
<li><strong>Gene Therapy Payment Considerations: </strong>A proposal to increase the maximum NTAP payment for SCD gene therapies may set a precedent for how gene therapies are addressed under inpatient payment methodologies. A proposed increase is notable, but the change would not fully address gaps that providers may encounter in payment, especially since list prices of SCD products currently being considered for NTAP have a per-treatment price between $2.2-3.1 million. The MS-DRGs that SCD gene therapies map to (016 and 017) have base rates that fall far below the costs of each product (i.e., ~$43,000). The specific focus on SCD in this proposed rule aligns with broader efforts of the administration, including the <a href="https://advisory.avalerehealth.com/insights/understanding-the-cms-cell-and-gene-therapy-access-model">CGT Access Model</a> currently being implemented by the<a href="https://advisory.avalerehealth.com/insights/what-is-the-cms-innovation-center"> CMS Innovation Center</a> (CMMI) that would allow for CMS to negotiate <a href="https://advisory.avalerehealth.com/insights/58-of-payers-use-outcomes-based-contracts">outcomes-based agreements</a> on behalf of states for SCD gene therapies in the Medicaid program. CMMI may also consider alternative reimbursement approaches in Medicare fee-for-service for CGTs, such as bundled payments or site-neutral payment. However, no models or additional details have been released to date.</li>
<li><strong>Site-of-Care Shifts:</strong> Differences in Medicare reimbursement methodology for the inpatient versus outpatient setting can sometimes result in higher reimbursement for CAR-T in the outpatient setting, where CAR-Ts are typically separately paid at average sales price plus 6%. However, assuming that a CAR-T therapy can be safely administered in an outpatient setting, shifts toward outpatient care may increase focus on Medicare’s outpatient drug payment methodology, as the 6% add-on payment could be significant given pricing of CAR-T products.</li>
</ul>
<p>Carefully monitoring reimbursement for these innovative products will allow CGT manufacturers, providers, and payers to engage other stakeholders based on anticipated developments. To discuss how Avalere can support your business on issues related to commercialization, NTAP proposal submissions, provider reimbursement, or policy developments, <a href="https://pages.avalere.com/Insights.html">connect with us</a>.</p>
<p>&nbsp;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/cgt-payment-changes-proposed-in-fy-2025-ipps-proposed-rule">CGT Payment Changes Proposed in FY 2025 IPPS Proposed Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Specialty Pharmacies Adapt to Support Cell and Gene Therapies</title>
		<link>https://advisory.avalerehealth.com/insights/specialty-pharmacies-adapt-to-support-cell-and-gene-therapies</link>
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		<dc:creator><![CDATA[Leah Keller]]></dc:creator>
		<pubDate>Tue, 05 Mar 2024 15:50:47 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=31567</guid>

					<description><![CDATA[<p>Advanced therapies such as cell and gene therapies (CGTs) tend to target small patient populations, and treatment settings tend to be confined to a limited number of Centers of Excellence (COEs). These therapies are typically developed for individual patients, have unique distribution requirements (e.g., ultra cold chain management), and are more expensive than traditional specialty&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/specialty-pharmacies-adapt-to-support-cell-and-gene-therapies">Specialty Pharmacies Adapt to Support Cell and Gene Therapies</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>Advanced therapies such as cell and gene therapies (CGTs) tend to target small patient populations, and treatment settings tend to be confined to a limited number of Centers of Excellence (COEs). These therapies are typically developed for individual patients, have unique distribution requirements (e.g., ultra cold chain management), and are more expensive than traditional specialty products. It is essential to ensure comprehensive care, enhanced patient support, and adequate distribution services. These components influence the flow of products and shape the patient journey, including patient preparation for treatment administration and ongoing post-treatment monitoring. Specialty pharmacies are developing capabilities to effectively support the highly specialized requirements of CGTs.</p>
<p>Specialty pharmacies evolved from traditional retail pharmacies with the introduction of specialty biologics in the 2000s. They support patients in need of specialty products, often requiring a higher level of pharmacist education, support, delivery, and ongoing adherence management.</p>
<p>Specialty pharmacies are increasingly addressing the unique challenges associated with CGT products. At the pre-treatment stage, specialty pharmacies offer:</p>
<ul>
<li>Patient scheduling support</li>
<li>Clinical expertise, including benefits investigation and verification to ensure expedited access to treatment</li>
<li>Prior authorization support, including coordination of pre-treatment lab draws, drafting an appeal letter if coverage is denied, and support with genetic testing requirements</li>
</ul>
<p>During treatment, specialty pharmacies provide standard reimbursement support and enhanced patient support services such as patient-facing care managers, financial assistance (e.g., transportation support), and peer-to-peer/emotional support.</p>
<p>For patients that have completed the treatment regimen, pharmacies provide data tracking support such as data inventory, dispenses, and status reports to manufacturers. In addition, specialty pharmacies offer product distribution and third-party logistics services such as:</p>
<ul>
<li>Drop-shipping</li>
<li>Implementing product storage capabilities at ultra-cold temperatures</li>
<li>Assuming initial financial liability (e.g., offering expanded offerings by optionality for buy-and-bill or pass-through payment)</li>
</ul>
<p>These capabilities have become the standard for specialty pharmacies and manufacturers have come to rely on these enhanced services.</p>
<p>Manufacturers of CGTs and other rare disease therapies are interested in specialty pharmacies managing the entire patient and product experience.</p>
<p>Specialty pharmacies have begun to meet evolving demands to ensure comprehensive patient support and efficient treatment logistics. Recent developments include:</p>
<ul>
<li>Implementing full care management services with trained nurses to assist patients throughout their treatment journey</li>
<li>Establishing long-term patient tracking systems to monitor patients across different healthcare plans and providers, collect outcomes, and contribute to registries</li>
<li>Capturing financial and administrative data from multiple sources and integrating it into existing registries</li>
<li>Taking temporary or “flash” title in order to bill insurance then shipping product to the infusion center</li>
<li>Enhancing cold chain shipping capabilities to ensure the safe and reliable transport of products between manufacturing sites, pharmacies, and sites of care, while maintaining temperature monitoring, chain of custody, and product tracking</li>
</ul>
<p>Given the critical importance of seamless gene therapy provision to the site of care, specialty pharmacies must have the capabilities to accommodate a growing pipeline of products with unique distribution considerations. These pharmacies can be a partner to manufactures by taking on a larger role in providing payment adjudication and authorization, patient support services for CGT-treated patients, and distribution logistics support.</p>
<p>Avalere CGT specialized practice area can help manufacturers to develop their channel distribution strategy to support patient access and help prioritize specialty pharmacies that are building capabilities to support the unique nature of these products and patients. To learn more and how Avalere can help, <a href="https://pages.avalere.com/Keep-In-Touch.html">connect with us</a>.</p>
<p>&nbsp;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/specialty-pharmacies-adapt-to-support-cell-and-gene-therapies">Specialty Pharmacies Adapt to Support Cell and Gene Therapies</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Understanding the CMS Cell and Gene Therapy Access Model</title>
		<link>https://advisory.avalerehealth.com/insights/understanding-the-cms-cell-and-gene-therapy-access-model</link>
					<comments>https://advisory.avalerehealth.com/insights/understanding-the-cms-cell-and-gene-therapy-access-model#_comments</comments>
		
		<dc:creator><![CDATA[Lisa Murphy]]></dc:creator>
		<pubDate>Mon, 05 Feb 2024 21:45:13 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=31270</guid>

					<description><![CDATA[<p>On January 30, the Centers for Medicare and Medicaid Services (CMS) announced the implementation of its Cell and Gene Therapy (CGT) Access Model. The voluntary model enables CMS to negotiate multi-state, outcomes-based agreements (OBAs) on behalf of participating states for selected CGTs with participating manufacturers. The model will initially focus on sickle cell disease (SCD)&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/understanding-the-cms-cell-and-gene-therapy-access-model">Understanding the CMS Cell and Gene Therapy Access Model</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>On January 30, the Centers for Medicare and Medicaid Services (CMS) announced the implementation of its <a href="https://www.cms.gov/priorities/innovation/innovation-models/cgt?mkt_tok=MTU4LUxVTy03OTMAAAGRAIXBCnphsTr--1aPV6II5hWHlyMtAD6W9zlj6ruJmXd2Rmxu6ONq8Tu9HH9eRupVXLhUXpQI6KhduQ4tUZuOpKMgKoIMjaplFhLi-Ro">Cell and Gene Therapy (CGT) Access Model</a>. The voluntary model enables CMS to negotiate multi-state, outcomes-based agreements (OBAs) on behalf of participating states for selected CGTs with participating manufacturers. The model will initially focus on sickle cell disease (SCD) but may expand to other therapeutic areas in future years. Through the model, CMS seeks to address Medicaid barriers to CGT access, improve health outcomes for Medicaid beneficiaries, and reduce Medicaid spending.</p>
<p>Entities eligible for the voluntary model will include state Medicaid programs and manufacturers of SCD CGTs that are FDA approved and launched by May 2024. Between May and November, participating manufacturers and CMS will negotiate key OBA terms (e.g., prices, rebates, outcome measures, patient access policies). States can then choose whether to sign the negotiated contract and can begin participating in the model at any time between January 2025 and January 2026.</p>
<p>Under the contract terms to be negotiated between manufacturers and CMS, participating states would receive supplemental rebates based on outcomes and, in return, would be required to implement a standard SCD gene therapy access policy. States may need to implement changes to support the model (e.g., amendments to reimbursement policies, alignment of coverage policies with managed care organizations, contracting with out-of-state providers) and may receive technical assistance and optional funding from CMS to do so. The model is expected to run for approximately 11 years, depending on the negotiated terms.</p>
<p><strong>Key Considerations</strong></p>
<p>The CGT Access Model reflects the alignment of CMS’s, states’, and manufacturers’ interests in developing novel ways to access and pay for a growing number of FDA-approved CGTs. Although manufacturers and commercial payers have demonstrated interest in developing OBAs for CGTs, operational complexities and regulatory barriers have limited the application of these agreements in Medicaid. This model seeks to circumvent these challenges by creating a role for CMS in negotiating OBA terms and assisting in implementation, data collection, and reconciliation of the agreement. This approach follows flexibilities implemented in the <a href="https://advisory.avalerehealth.com/insights/value-based-arrangement-pricing-flexibilities-will-take-effect-july-1">Medicaid VBP Final Rule</a> and shares similarities with a national CGT model previously contemplated by the Medicaid and Children’s Health Insurance Program Payment and Access Commission.</p>
<p><strong>Outstanding Questions</strong></p>
<p>As the CGT Access Model is implemented, CMS, states, manufacturers, and other stakeholders will need to consider a number of outstanding questions. There are a range of unknowns that may impact participation decisions by states and manufacturers, and eventual model success, including:</p>
<ul>
<li><strong>Definitions of Key Terms:</strong> In the model announcement, CMS states that participating states will need to agree to a “standard access policy.” Additional details on expectations for this policy and how it may apply to coverage criteria will provide more clarity around the access implications of the model. CMS also notes that participating states must change reimbursement structures to “appropriately reimburse” for gene therapies. It is unclear whether these anticipated changes relate specifically to reimbursement rates, reimbursement methodologies (e.g., average sales price-based payment vs. bundled payments), or operational systems to pay claims.</li>
<li><strong>Details of Negotiated Contract:</strong> CMS and manufacturers must align on terms of an agreement that could trigger a rebate. The selected outcome measures, the timeline for assessing them, and the size of rebates are all yet to be negotiated and will ultimately drive interest in participation among states. Stakeholders must also determine the OBA rebate structure (e.g., retrospective rebates, payments based on performance milestones, volume-based rebates). The process CMS will use to negotiate OBAs, including the office that will lead negotiations and the evidence it will leverage, remains unclear as CMS has not previously conducted similar negotiations in Medicaid.</li>
<li><strong>State Participation Decisions: </strong>The number of states that decide to participate between 2025 and 2026 will be a key factor in the model’s eventual scale and success. While many states may view CMS’s centralized negotiation role as a benefit of the model, the model’s conditions of participation could be a barrier to state participation. Additionally, some states may wish to negotiate their own OBAs; several state Medicaid programs have previously negotiated OBAs or other innovative contracts with manufacturers.</li>
</ul>
<p>While CMS’s model announcement does not provide a formal comment opportunity, stakeholders should examine the high-level model outlined by CMS and consider near- and longer-term implications and opportunities to influence the design of the model. The ability of the model to reduce costs and improve access will likely influence CMS’s decision making regarding expansion to other therapeutic areas as well as state and manufacturer participation decisions. As the model is implemented, stakeholders can monitor the development of OBAs to better understand successful contracting arrangements and assess how potential therapeutic area expansion may impact pricing, reimbursement, and access for other gene therapy products.</p>
<p><strong>Connect With Us</strong></p>
<p>Avalere experts can help you understand the CGT Access Model, the potential impacts on your business, and opportunities for involvement. To learn more about the CGT Access Model and how Avalere can help, <a href="https://pages.avalere.com/Keep-In-Touch.html">connect with us</a>.</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/understanding-the-cms-cell-and-gene-therapy-access-model">Understanding the CMS Cell and Gene Therapy Access Model</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>CAR-T Reimbursement Updated in FY 2024 IPPS Final Rule</title>
		<link>https://advisory.avalerehealth.com/insights/car-t-reimbursement-updated-in-ipps-final-rule</link>
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		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Wed, 16 Aug 2023 17:03:04 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=27286</guid>

					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-updated-in-ipps-final-rule">CAR-T Reimbursement Updated in FY 2024 IPPS Final Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
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			<p>The Centers for Medicare &amp; Medicaid Services (CMS) will continue to use its Medicare Severity Diagnosis-Related Group (MS-DRG) for chimeric antigen receptor T-cell (CAR-T) treatment stays. Differential reimbursement will be provided based on whether the product was provided as part of a clinical trial, with a significant overall increase finalized this year. The financial impact of changes in the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) final rule will vary by hospital, and reimbursement may continue to fall short of fully recognizing provider costs of treatment in some cases. Substantial changes to eligibility periods for New Technology Add-on Payment (NTAP) are finalized in this rule with implications for manufacturers preparing applications and for providers seeking additional reimbursement.</p>
<h2>Background</h2>
<p>Since the first Food &amp; Drug Administration (FDA) approval of a CAR-T product in 2017, concerns have persisted over how the Medicare program would reimburse for these products, which are commonly administered in the inpatient setting and have a significant cost for providers (e.g., average sales prices exceeding $400,000). Hospital inpatient reimbursement is calculated on a case basis using an MS-DRG base payment rate that is adjusted for factors such as hospital geography, diagnosis, case severity, and discharge status. Additional reimbursement can be provided through <a href="https://advisory.avalerehealth.com/insights/how-a-new-technology-add-on-payment-works">NTAP</a> and outlier payments.</p>
<p>For FY 2023, inpatient stays with CAR-T treatment are currently assigned to MS-DRG 018, which has a base reimbursement rate of $247,939. Hospitals currently receive additional payments for three products with NTAP status: Tecartus<sup>TM</sup> (brexucabtagene autoleucel), Abecma<sup>®</sup> (idecabtagene vicleucel), and Carvykti<sup>TM</sup> (ciltacabtagene autoleucel); however, the NTAP is limited to a maximum of 65% of the product cost and varies based on the hospital’s case cost compared to MS-DRG payment. Outlier payments are available to hospitals to cover extremely costly cases when the costs exceed the total of the MS-DRG payment, the NTAP amount (if applicable), and the current fixed-loss threshold of $38,788. Even with these adjustments, Medicare reimbursement for CAR-T cases today sometimes fails to cover total hospital costs, which could negatively impact provider uptake and patient access.</p>
<h2>Policy Changes for FY 2024</h2>
<p>For FY 2024, CMS finalized several policies that will impact provider reimbursement for CAR-T.</p>
<h3>Payment Changes for CAR-T Cases</h3>
<p>As a result of an increase to the base operating and capital rates for all IPPS payments and an increase in the relative weight for MS-DRG 018, the finalized base payment for CAR-T cases in FY 2024 will increase by 4.0% to $257,958. This is slightly lower than the proposed 6.4% increase.</p>
<h3>High-Cost Outlier Payments</h3>
<p>For FY 2024, CMS finalized a proposal to return to its historical method of establishing the fixed-loss threshold in a way that does not adjust for COVID-19 cases (as was done in FY 2023). The fixed-loss threshold for FY 2024 will be $42,750, a 10.2% increase. This is a larger adjustment than the proposed 5% increase. For CAR-T cases, which are more likely than other inpatient stays to qualify for outlier payments, this will require hospitals to incur more losses before qualifying for an outlier payment.</p>
<h3>Adjustment for Clinical Trial Cases</h3>
<p>CMS reimburses CAR-T clinical trial cases, which do not incur drug costs, at a lower rate than non-clinical trial cases. Using its standard approach to analyze the latest update of the 2022 Medicare Provider Analysis and Review data, CMS found that clinical trial cases for CAR-T treatment incur 27% of the costs of non-clinical trial cases. The agency, therefore, finalized an adjustment factor of 0.27 to the relative weight of MS-DRG 018 for these cases (an increase over the FY 2023 adjustment factor of 0.21). The finalized adjustment factor is slightly lower than the proposed factor of 0.28. The base rate for clinical trial cases mapped to DRG-018 will be $69,649, an increase of 34%. Additionally, CMS finalized changes to its method for identifying CAR-T clinical trial cases on claims for the purposes of rate setting for MS-DRG 018. Its calculation will leverage a combination of diagnosis and condition codes and remove a proxy threshold for drug charges that would exclude certain cases.</p>
<h3>Product NTAP Decisions</h3>
<p>In this rulemaking cycle, CMS did not evaluate any new CAR-T products. NTAP payments will expire in FY 2024 for 3 CAR-T products: Abecma, Tecartus, and Carvykti.</p>
<h3>NTAP Eligibility Changes</h3>
<p>CMS finalized two changes related to NTAP eligibility, which will impact future NTAP submissions for CAR-T products seeking payment in FY 2025:</p>
<ul>
<li>CMS will require that applicants have a &#8220;complete and active&#8221; FDA market authorization request prior to applying for NTAP.</li>
<li>CMS moved the FDA authorization deadline from July 1 to May 1.</li>
</ul>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="975" height="524" src="https://advisory.avalerehealth.com/wp-content/uploads/2022/09/ipps_fr_2023_f1.png" class="vc_single_image-img attachment-full" alt="" title="ipps_fr_2023_f1" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2022/09/ipps_fr_2023_f1.png 975w, https://advisory.avalerehealth.com/wp-content/uploads/2022/09/ipps_fr_2023_f1-300x161.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2022/09/ipps_fr_2023_f1-768x413.png 768w" sizes="(max-width: 975px) 100vw, 975px" /></div><figcaption class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2024 vs. Proposed FY 2024 and Final FY 2023</figcaption>
		<span class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2024 vs. Proposed FY 2024 and Final FY 2023</span></figure>
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			<p class="figure-note" style="padding-bottom: 10px;">FR: Final Rule; PR: Proposed Rule. Figures not to scale.</p>
<p class="figure-note" style="padding-bottom: 2px;">Assumptions:</p>
<ul>
<li style="font-style: italic; font-size: .65em; line-height: 1.3em;">Hospital charges for CAR‑T episode are kept constant across all examples, consistent with the geometric mean charges included in the FY 2023 Final Rule after outliers removed (AOR)/before outliers removed (BOR) file ($1,404,657)</li>
<li style="font-style: italic; font-size: .65em; line-height: 1.3em;">Hospital has an average operating and capital cost-to-charge ratio of 0.3​</li>
<li style="font-style: italic; font-size: .65em; line-height: 1.3em;">Hospital has an indirect medical education adjustment factor of 0.2 and disproportionate share hospital adjustment of 0.05​</li>
<li style="font-style: italic; font-size: .65em; line-height: 1.3em;">Hospital area wage index is 1.0</li>
</ul>
<h2>Key Considerations</h2>
<p>Stakeholders should consider several implications stemming from final FY 2024 changes for existing assets and for future cell and gene therapies.</p>
<ul style="margin-bottom: 30px;">
<li><strong>Stability of MS-DRG 018: </strong>While the finalized FY 2024 base rate for MS-DRG 018 represents an increase over FY 2023, increases to the fixed-loss threshold may diminish any benefits for cases that incur outlier payment. Total reimbursement will vary by hospital and case, with adequate reimbursement in some cases but potential financial risk for hospitals on significantly costly cases. The number of cases represented in the data to set the base rate doubled this year (403 to 812), reflecting a larger number of on-market products and increases in utilization. In the future, inclusion of additional immunotherapies, such as allogeneic CAR-Ts that could be mapped to MS-DRG 018, may lead to fluctuations in the base rate. This may lead CMS to consider splitting the MS-DRG, depending on the number of cases and differences in resource costs. With a robust <a href="https://advisory.avalerehealth.com/insights/pipeline-transformative-therapies-may-require-payment-model-innovation">pipeline</a> of cell and gene therapies, CMS may have to confront reimbursement challenges or consider alternative approaches.</li>
<li><strong>NTAP Eligibility: </strong>Adjusting the newness criterion to move the FDA approval deadline up by two months, from July 1 to May 1, could negatively impact reimbursement adequacy for providers and have downstream implications for patient access. These changes mean that products launched after May 1 will not have an opportunity for NTAP payment until October of the following year. Additionally, the change significantly narrows the window for products to qualify for a full 3 years of NTAP payment. Under current policies, products approved between April 1 and July 1 can benefit from 3 years of NTAP eligibility, as products that reach their 3-year anniversary of market availability prior to April 1 of the fiscal year will not qualify for continued NTAP payment. After this change, only products approved between April 1 and May 1 will be eligible for 3 years of NTAP payment. The changes will impact NTAP application strategy and timing for manufacturers to improve likelihood of NTAP availability.</li>
<li><strong>Alternative Payment and Value-Based Arrangements: </strong>Since initial market availability, value-based arrangements for CAR-T products have been considered given their high costs and therapeutic promise. However, regulatory and operational barriers have limited progress in establishing these arrangements across payer markets. In February 2023, HHS <a href="https://advisory.avalerehealth.com/insights/cmmi-drug-pricing-model-concepts">directed</a> the Centers for Medicare and Medicaid Innovation (CMMI) to advance a voluntary model aimed at cell and gene therapies (CGTs) in Medicaid that would allow CMS to negotiate and administer outcomes-based agreements on behalf of states in certain therapeutic areas. Model details are expected in 2024 and 2025, with a model launch expected as soon as 2026. CMMI is also instructed to consider alternative reimbursement approaches in Medicare fee-for-service (FFS) for CGTs, such as bundled payments or site-neutral payment. This would represent a significant shift in the Medicare FFS space, though no timeline for implementation has been provided.</li>
<li><strong>Potential for Shifts in Site of Care:</strong> Differences in Medicare reimbursement methodology in the inpatient versus outpatient setting generally result in more adequate reimbursement for CAR-T in the outpatient setting where CAR-Ts are typically separately paid at average sales price plus 6%. However, assuming that a CAR-T therapy can be safely administered in an outpatient setting, shifts toward the outpatient setting may increase scrutiny on Medicare’s outpatient drug payment methodology, as the 6% add-on payment could be significant given pricing of CAR-T products.</li>
</ul>
<p>Carefully monitoring reimbursement for these innovative products will allow CGT manufacturers, providers, and payers to engage other stakeholders based on anticipated developments. To discuss how Avalere can support your business on issues related to commercialization, NTAP proposal submissions, provider reimbursement, or policy developments, <a href="https://pages.avalere.com/Keep-In-Touch.html">connect with us</a>.</p>

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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-updated-in-ipps-final-rule">CAR-T Reimbursement Updated in FY 2024 IPPS Final Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>CAR-T Reimbursement Updates Proposed for FY 2024</title>
		<link>https://advisory.avalerehealth.com/insights/car-t-reimbursement-updates</link>
					<comments>https://advisory.avalerehealth.com/insights/car-t-reimbursement-updates#_comments</comments>
		
		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Thu, 04 May 2023 14:32:53 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=29107</guid>

					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-updates">CAR-T Reimbursement Updates Proposed for FY 2024</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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			<p>The Centers for Medicare &amp; Medicaid Services (CMS) proposes to continue the use of its Medicare Severity Diagnosis-Related Group (MS-DRG) for chimeric antigen receptor T-cell (CAR-T) treatment stays. Differential reimbursement will be provided based on whether the product was provided as part of a clinical trial, with large increases proposed this year. The financial impact of changes in the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) proposed rule will vary by hospital, and reimbursement may continue to fall short of fully recognizing provider costs of treatment in some cases.</p>
<h2>Background</h2>
<p>Since the first Food &amp; Drug Administration (FDA) approval of a CAR-T product in 2017, concerns have persisted over how the Medicare program would reimburse for these products, which are commonly administered in the inpatient setting and have a significant cost for providers (e.g., average sales prices exceeding $400,000 for several products). Hospital inpatient reimbursement is calculated on a case basis using an MS-DRG base payment rate that is adjusted for factors such as hospital geography, diagnosis, case severity, and discharge status. Additional reimbursement can be provided through <a href="https://advisory.avalerehealth.com/insights/how-a-new-technology-add-on-payment-works">new technology add-on payments</a> (NTAPs) and outlier payments.</p>
<p>For FY 2023, inpatient stays with CAR-T treatment are currently assigned to MS-DRG 018, which has a base reimbursement rate of $247,939. Hospitals currently receive additional payments for three products with NTAP status (Tecartus<sup>TM</sup>, Abecma<sup>®</sup>, and Carvykti<sup>TM</sup>). The NTAP, however, is limited to a maximum of 65% of the product cost and varies based on the hospital’s case cost compared to MS-DRG payment. Outlier payments are available to hospitals to cover extremely costly cases in which the costs exceed the MS-DRG payment, the NTAP amount (if applicable), and the current fixed-loss threshold of $38,788. Even with these adjustments, Medicare reimbursement for CAR-T cases today sometimes fails to cover total hospital costs, with potential negative impacts on provider uptake and patient access.</p>
<h2>Proposed FY 2024 Changes</h2>
<p>For FY 2024, CMS proposes several policies that would impact provider reimbursement for CAR-T.</p>
<ul>
<li><strong>Payment Changes for CAR-T Cases: </strong>As a result of an increase to the base operating and capital rates for all IPPS payments and an increase in the proposed relative weight for MS-DRG 018, the proposed base payment for CAR-T cases in FY 2024 would increase by 6.4% to $263,744.</li>
<li><strong>High-Cost Outlier Payments: </strong>CMS proposes to return to its historical method of establishing the fixed-loss threshold in a way that does not adjust for COVID-19 cases (as was done in FY 2023). The proposed fixed-loss threshold for FY2024 is $40,732, a 5% increase. For CAR-T cases, which are more likely than other inpatient stays to qualify for outlier payments, this will require hospitals to incur more losses before qualifying for an outlier payment, but the higher overall MS-DRG base rate should mitigate negative impacts.</li>
<li><strong>Adjustment for Clinical Trial Cases: </strong>CMS reimburses CAR-T clinical trial cases, which do not incur drug costs, at a lower rate than non-clinical trial cases. Using its standard approach to analyze 2022 Medicare Provider Analysis and Review (MedPAR) data, CMS found that clinical trial cases for CAR-T treatment incur 28% of the cost for non-clinical trial cases. Therefore, the agency proposes an adjustment factor of 0.28 to the relative weight of MS-DRG 018 for these cases (an increase over the current adjustment factor of 0.21). This would result in a base rate for clinical trial cases of $73,848, an increase of 42%. This increase reflects updated 2022 claims data, which show much higher average case costs for clinical trial cases than those reflected in the 2021 data. Additionally, CMS proposes changes to identifying CAR-T clinical trial cases to conduct rate setting for MS-DRG 018 by leveraging a combination of diagnosis codes and condition codes on claims.</li>
<li><strong>Product NTAP Decisions: </strong>In this proposed rule, CMS did not evaluate any new CAR-T products. CMS notes that NTAP payments for three CAR-T products will expire in FY2024: Abecma (idecabtagene vicleucel), Tecartus (brexucabtagene autoleucel), and Carvykti (ciltacabtagene autoleucel). Though Carvykti only qualified for NTAP payments starting in FY 2023, the window of eligibility was shorter as CMS deemed the product to be “substantially similar” to Abecma, meaning its newness period was tied instead to the FDA marketing authorization date for Abecma.</li>
<li><strong>NTAP Eligibility Changes:</strong> CMS proposes changes to two requirements for product NTAP eligibility, which could impact future NTAP submissions for CAR-T products:
<ul style="margin-bottom: 0;">
<li>CMS proposes requiring applicants to submit their FDA market authorization requests by the time they apply for NTAP for FY 2024.</li>
<li>CMS proposes moving the deadline for FDA authorization from July 1 to May 1 to allow more time to adequately assess the product for NTAP.</li>
</ul>
</li>
</ul>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="900" height="608" src="https://advisory.avalerehealth.com/wp-content/uploads/2023/05/car-t_rule_f1.png" class="vc_single_image-img attachment-full" alt="" title="car-t_rule_f1" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2023/05/car-t_rule_f1.png 900w, https://advisory.avalerehealth.com/wp-content/uploads/2023/05/car-t_rule_f1-300x203.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2023/05/car-t_rule_f1-768x519.png 768w" sizes="(max-width: 900px) 100vw, 900px" /></div><figcaption class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2023 vs. Proposed FY 2024</figcaption>
		<span class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2023 vs. Proposed FY 2024</span></figure>
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			<p class="figure-note" style="margin-bottom: 0;">FR: Final Rule; PR: Proposed Rule. Figures not to scale. Assumptions: Hospital charges for CAR-T episodes are kept constant across all examples, consistent with the geometric mean charges included in the FY 2024 Proposed Rule after outliers removed file ($1,378,479); Hospital has an average operating and capital cost-to-charge ratio of 0.3; Hospital has an indirect medical education adjustment factor of 0.2 and disproportionate share hospital adjustment of 0.05; Hospital area wage index is 1.0</p>
<h2>Key Considerations</h2>
<p>Stakeholders should consider several outstanding issues and potential implications stemming from proposed FY 2024 changes for existing assets and for future cell and gene therapies.</p>
<ul>
<li><strong>Stability of MS-DRG 018: </strong>While the proposed FY 2024 base rate for MS-DRG 018 represents a 6.4% increase over FY 2023, changes to the fixed-loss threshold may result in a more modest increase in cases that incur outlier payment. Total reimbursement will vary by hospital and case, with adequate reimbursement in some cases but potential financial risk for hospitals in significantly costly cases. The number of cases represented in the data to set the base rate nearly doubled this year (403 to 790), reflecting a larger number of on-market products and increases in utilization. In the future, the inclusion of additional immunotherapies, such as allogeneic CAR-Ts, that could be mapped to MS-DRG 018 may lead to fluctuations in the base rate. This may lead to the consideration of splitting the MS-DRG, depending on the number of cases and resource costs. With a robust pipeline of cell and gene therapies, CMS may have to confront reimbursement challenges or alternative approaches.</li>
<li><strong>NTAP Eligibility: </strong>Adjusting the newness criterion to move the FDA approval deadline up by two months, from July 1 to May 1, may impact the timeliness of reimbursement adequacy for providers and could have downstream implications for patient access. This means that a product launching on May 2 would not be eligible for NTAP until October of the following year, creating reimbursement uncertainty for providers over an extended period with potential negative effects on product uptake. Additionally, as more CAR-Ts come to market, it may become increasingly difficult for manufacturers to demonstrate NTAP eligibility based on established newness, cost, and clinical-improvement criteria, and hospitals may be less likely to benefit from NTAP payments.</li>
<li><strong>Alternative Payment and Value-Based Arrangements: </strong>Since initial market availability, value-based arrangements for CAR-T products have been considered given their high costs and therapeutic promise. However, regulatory and operational barriers have limited progress in establishing these arrangements across payer markets. Notably, the Department of Health and Human Services recently <a href="https://advisory.avalerehealth.com/insights/cmmi-drug-pricing-model-concepts">directed</a> the Centers for Medicare and Medicaid Innovation (CMMI) to advance a voluntary model aimed at cell and gene therapies in Medicaid that would allow CMS to negotiate and administer outcomes-based agreements on behalf of states in certain therapeutic areas. Model details are expected in 2024 and 2025, with a model launch expected as soon as 2026. Additionally, CMMI is instructed to consider further research into alternative reimbursement approaches in Medicare fee-for-service (FFS) for cell and gene therapies, such as bundled payments or site-neutral payments. This would represent a significant shift in the Medicare FFS space, though no timeline for implementation has been provided.</li>
<li><strong>Potential for Shifts in Site of Care:</strong> Differences in Medicare reimbursement methodology in the inpatient versus outpatient settings generally result in more adequate reimbursement for CAR-T in the outpatient setting. Assuming that a CAR-T therapy can be safely administered in an outpatient setting, shifts toward the outpatient setting may increase scrutiny on Medicare’s outpatient drug payment methodology, which is currently the average sales price plus 6% for separately payable drugs.</li>
</ul>
<p>Manufacturers of cell and gene therapies, along with other stakeholders including providers and plans, should carefully monitor reimbursement for these innovative products and engage stakeholders based on anticipated developments. For questions or to discuss potential Avalere support related to commercialization, NTAP proposal submissions, provider reimbursement, or policy developments, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>

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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-updates">CAR-T Reimbursement Updates Proposed for FY 2024</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Pipeline Transformative Therapies May Require Payment Model Innovation</title>
		<link>https://advisory.avalerehealth.com/insights/pipeline-transformative-therapies-may-require-payment-model-innovation</link>
					<comments>https://advisory.avalerehealth.com/insights/pipeline-transformative-therapies-may-require-payment-model-innovation#_comments</comments>
		
		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Thu, 04 May 2023 13:36:28 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=29093</guid>

					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/pipeline-transformative-therapies-may-require-payment-model-innovation">Pipeline Transformative Therapies May Require Payment Model Innovation</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
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			<h2>Assessment of the Transformative Therapy Pipeline</h2>
<p>In recent years, the number of transformative therapies that have been approved by the US Food &amp; Drug Administration (FDA) and that are under development by product sponsors has grown substantially. Transformative therapies, including cell and gene therapies, offer new treatment options for patients, often for conditions that currently have limited or no treatment options available. However, these therapies also present challenges related to payment and access that vary by payer market and setting of care.</p>
<p>To better assess the potential impact that the transformative therapy pipeline will have on healthcare stakeholders—including payers, providers, and patients—Avalere assessed the number and type of transformative therapies by clinical trial phase, therapeutic area, primary payer, and primary site of care. Avalere focused its analysis on therapies that met a series of criteria including at least one special FDA designation, a unique mechanism of action, and a one-time or limited-duration treatment cadence. See the <a href="#methodology-section">methodology section</a> below for additional inclusion and exclusion criteria.</p>
<p>Based on these criteria, Avalere assessed a total of 214 product/indication combinations, representing 200 unique transformative therapies.</p>
<h3>Transformative Therapy Pipeline Characteristics</h3>
<p>Of the 214 combinations analyzed, more than three-quarters are in Phase I or II trials (Figure 1). Many of the combinations have received more than one special FDA designation, including 160 (75%) combinations with an orphan drug designation and 109 (51%) with a fast track designation.</p>

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		<span class="wpb_single_image_caption">Figure 1. Transformative Therapy Pipeline by Clinical Trial Stage</span></figure>
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			<p>Of the 214 product/indication combinations, more than one-third are indicated to treat cancer, with therapies treating neurologic, metabolic, ophthalmologic, and autoimmune conditions each accounting for an additional 10% or more of the combinations analyzed (Figure 2). Additionally, 82% of the combinations were estimated to be intended for one-time administration based on clinical-trial and other publicly available information.</p>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="960" height="576" src="https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f2.png" class="vc_single_image-img attachment-full" alt="" title="pipeline_insight_f2" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f2.png 960w, https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f2-300x180.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f2-768x461.png 768w" sizes="(max-width: 960px) 100vw, 960px" /></div><figcaption class="wpb_single_image_caption">Figure 2. Transformative Therapy Pipeline by Therapeutic Area</figcaption>
		<span class="wpb_single_image_caption">Figure 2. Transformative Therapy Pipeline by Therapeutic Area</span></figure>
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			<h3>Estimated Settings of Care and Payer Mix for the Transformative Therapy Pipeline</h3>
<p>Avalere used clinical-trial information, publicly available information on the product and its route of administration, and clinical expertise to estimate the likely setting of care for each pipeline product/indication. Of the 214 product/indication combinations analyzed, the vast majority (89%) are estimated to be administered in a hospital setting (Figure 3). More than one-third of the combinations are expected to be primarily administered in outpatient settings (hospital outpatient or physician office), with another 36% that could potentially fall in the inpatient or outpatient setting pending additional safety information, and 28% anticipated primarily for use in an inpatient hospital setting.</p>

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		<span class="wpb_single_image_caption">Figure 3. Transformative Therapy Pipeline Estimated Setting of Care</span></figure>
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			<p>The primary payer mix was assigned based on the typical age of disease onset for the product’s indicated condition. Products with indications treating diseases that first present in infancy or in early childhood were assigned to primary coverage by Medicaid and the Children’s Health Insurance Program (CHIP). Therapies that treat conditions with an average age of onset of around 65 or above (i.e., the Medicare-eligible patient population) or that were indicated for diseases that automatically qualify an individual for Medicare (e.g., amyotrophic lateral sclerosis) were assigned to Medicare. Therapies with target conditions impacting broader patient populations ranging from age 18 to 65 were assigned to commercial insurance as a primary payer.</p>
<p>Based on these classifications, Avalere estimates that 35% of the transformative therapy pipeline analyzed will have Medicaid/CHIP as a primary payer and that more than two-thirds of the transformative therapy pipeline will have government-sponsored insurance as a primary payer (Figure 4). This compares to the <a href="https://www.census.gov/library/publications/2022/demo/p60-278.html#:~:text=Of%20the%20subtypes%20of%20health,percent)%2C%20and%20VA%20and%20CHAMPVA">overall coverage</a> for the US population of more than 50% for commercial insurance and about 20% for Medicare and Medicaid. The potential for a higher percentage of patients with government-sponsored insurance to be treated by transformative therapies raises important considerations for state and federal budget impact of the growing transformative therapy pipeline.</p>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="626" height="576" src="https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f4.png" class="vc_single_image-img attachment-full" alt="" title="pipeline_insight_f4" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f4.png 626w, https://advisory.avalerehealth.com/wp-content/uploads/2023/05/pipeline_insight_f4-300x276.png 300w" sizes="(max-width: 626px) 100vw, 626px" /></div><figcaption class="wpb_single_image_caption">Figure 4. Transformative Therapy Pipeline Estimated Payer Mix</figcaption>
		<span class="wpb_single_image_caption">Figure 4. Transformative Therapy Pipeline Estimated Payer Mix</span></figure>
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			<h2>Future of Transformative Therapy Payment Models</h2>
<p>Due to the unique characteristics of transformative therapies (e.g., potentially durable nature, novel mechanisms of action, up-front treatment costs) stakeholders have raised the need for alternative payment and financing approaches that better account for these characteristics by recognizing both payer financing pressures and clinical value of the products.</p>
<p>Traditional payment models, such as the bundled payments used under Medicare Fee-for-Service (FFS) in the inpatient setting, were not designed to accommodate many of the particular characteristics of transformative therapies. While the Centers for Medicare and Medicaid Services (CMS) has continued to refine inpatient payment approaches, reimbursement in the inpatient setting may be insufficient to cover all provider costs. Payment models in other settings (e.g., hospital outpatient) present fewer risks for providers. Medicaid FFS programs use a range of inpatient and outpatient payment methodologies and vary widely in how well provider costs are covered. While innovative payment arrangements (e.g., outcomes-based contracts [OBCs]/value-based arrangements, employer benefit protection programs) have been explored by payers, including <a href="https://advisory.avalerehealth.com/insights/medicaid-coverage-processes-for-innovative-therapies-vary-by-state">state Medicaid programs</a> and commercial payers, uptake of these alternative payment and financing approaches has been relatively limited to date for on-market transformative therapies.</p>
<p>Given these challenges, stakeholders are also considering broader payment solutions in federal programs that aim to mitigate budgetary pressure of the growing pipeline and address existing administrative barriers associated with value-based arrangements. In 2021, the Medicaid and CHIP Payment and Access Commission (MACPAC) considered <a href="https://www.macpac.gov/wp-content/uploads/2021/06/June-2021-Report-to-Congress-on-Medicaid-and-CHIP.pdf">a proposal</a> to implement a federal carve out for cell and gene therapies (CGTs) that would pool coverage and consolidate purchasing power for these products across state Medicaid programs. Although proposed for Medicaid, MACPAC noted this structure could also be applied across both Medicare and Medicaid.</p>
<p>Most recently, the Department of Health and Human Services (HHS) issued a report in February instructing the <a href="https://advisory.avalerehealth.com/insights/cmmi-drug-pricing-model-concepts">Center for Medicare and Medicaid Innovation (CMMI)</a> to advance a cell and gene therapy access model. The model would allow states to assign ability to negotiate multi-state OBCs for selected CGTs to the CMS. In assigning these contracts to CMS, the model aims to pool state bargaining power for CGTs, condition the cost of CGTs on outcomes, and shift the burden of administering OBCs from state Medicaid agencies to CMS. HHS noted that the model could start with a single indication such as sickle cell disease and expand to other therapies/conditions. However, the report included limited details on other model parameters, including potential outcomes, execution of OBCs, coverage, and reimbursement for selected products. HHS also directed CMMI to explore a Medicare FFS payment model for CGTs that could test alternative payment approaches such as bundled payments, site-neutral payments, and quality-adjusted payments for providers.</p>
<p>The report instructs the CMMI to begin development of the Medicaid CGT model in 2023, announce specifications in 2024 or 2025, and launch the model as soon as 2026. With the Medicaid model still in the early stages of development and a Medicare approach still being explored, this presents stakeholders with an opportunity to engage CMMI to proactively shape model design.</p>
<p>Given the robust transformative therapy pipeline, innovative coverage and reimbursement approaches will likely be needed to support market entry, address current administrative barriers associated with value-based arrangements, mitigate payer budgetary impact, and ensure appropriate patient access to these therapies in the coming years.</p>
<p>To learn more about payment model innovation for pipeline transformative therapies, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>
<p><em>Funding for this research was provided by The Biotechnology Innovation Organization. Avalere retained full editorial control.</em></p>
<h2 id="methodology-section">Methodology</h2>
<p>Avalere leveraged data sets available via subscription, publicly available information from manufacturers, press releases and journal articles, and publicly available clinical trial design details (e.g., <a href="https://clinicaltrials.gov">clinicaltrials.gov</a>) to identify therapies in the transformative pipeline that had at least one special FDA designation including orphan drug, regenerative medicine advance therapy, breakthrough, fast track, or priority review status. Exclusion criteria included:</p>
<ul>
<li>Products that are administered orally, sublingually, topically, or subcutaneously</li>
<li>Infectious disease products, pain management drugs, antihistamines, diuretics, or contraceptives</li>
<li>Products that were determined to be maintenance therapies/ongoing treatment</li>
<li>Therapies that did not have a novel mechanism of action</li>
<li>Bioengineered parts</li>
</ul>
<p>To assign primary payer mix, Avalere used publicly available sources (e.g., Centers for Disease Control and Prevention, National Institutes of Health, journal articles) to determine demographic information of the patient population for each product&#8217;s indication.</p>

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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/pipeline-transformative-therapies-may-require-payment-model-innovation">Pipeline Transformative Therapies May Require Payment Model Innovation</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>The Fast-Paced Future of Cell and Gene Therapies</title>
		<link>https://advisory.avalerehealth.com/insights/the-fast-paced-future-of-cell-and-gene-therapies</link>
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		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Thu, 17 Nov 2022 15:49:05 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=27958</guid>

					<description><![CDATA[<p>Cell and gene therapies represent a paradigm shift in the development of pharmaceutical products. These treatments not only often promise to cure disease but also represent an evolution in product manufacturing and delivery. Understanding the barriers and risks early in drug development is paramount for ensuring these therapies deliver on their promises for patients. Drawing&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/the-fast-paced-future-of-cell-and-gene-therapies">The Fast-Paced Future of Cell and Gene Therapies</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>Cell and gene therapies represent a paradigm shift in the development of pharmaceutical products. These treatments not only often promise to cure disease but also represent an evolution in product manufacturing and delivery. Understanding the barriers and risks early in drug development is paramount for ensuring these therapies deliver on their promises for patients.</p>
<p>Drawing on experience working with biopharmaceutical innovators on the commercialization and launch of cell and gene therapies, leaders from across Fishawack Health have developed a series of articles on the evolving landscape. Experts from Avalere, which joined Fishawack Health in June 2022, are featured in a discussion of key regulatory challenges and the impact of US policy changes at each stage of the cell and gene product life cycle. They focus on the impact on product developers, highlighting considerations that will equip companies to plan effectively.</p>
<p>The report covers the challenges and opportunities manufacturers face when commercializing cell and gene products. Along with recommendations from our experts, the articles also include insights from stakeholders such as biopharmaceutical industry leaders, researchers, and patients.</p>
<p>Download the <a href="https://production.cms.fishawack.com/wp-content/uploads/2022/11/Fishawack-Health-Future-of-Cell-and-Gene-November-2022.pdf">report</a> to find:</p>
<ul style="margin-bottom: 30px;">
<li>An interview with Professor Francesco Dazzi, Medical Lead Cell Therapy, BioPharmaceuticals R&amp;D at AstraZeneca, on the company’s novel cell therapy pipeline for chronic diseases</li>
<li>Patient and market access insights on leveraging CRISPR technology for hematologic diseases</li>
<li>Trends shaping the future of personalized medicine</li>
<li>Steps for communicating the complex science to a variety of stakeholders</li>
</ul>
<p>For more information about the cell and gene therapies market, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/the-fast-paced-future-of-cell-and-gene-therapies">The Fast-Paced Future of Cell and Gene Therapies</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Cell and Gene Therapy: Fundamental Development Questions for Sponsors</title>
		<link>https://advisory.avalerehealth.com/insights/cell-and-gene-therapy-fundamental-development-questions-for-sponsors</link>
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		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Tue, 25 Oct 2022 15:20:55 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=27710</guid>

					<description><![CDATA[<p>Background The CGT pipeline has grown rapidly in the past two decades, following the sequencing of the human genome and the advancement of personalized medicine. The US Food &#38; Drug Administration (FDA) has now approved several cellular, gene, and blood-based therapies, including six chimeric antigen receptor T-cell (CAR-T) therapies. More than 500 CGT products are&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/cell-and-gene-therapy-fundamental-development-questions-for-sponsors">Cell and Gene Therapy: Fundamental Development Questions for Sponsors</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<h2>Background</h2>
<p>The CGT pipeline has grown rapidly in the past two decades, following the sequencing of the human genome and the advancement of personalized medicine. The US Food &amp; Drug Administration (FDA) has now approved several cellular, gene, and blood-based therapies, including six chimeric antigen receptor T-cell (CAR-T) therapies. More than 500 CGT products are in active clinical trials. However, despite the promising growth of the sector, product sponsors face continued clinical, regulatory, and market uncertainty.</p>
<p>In recent years, policymakers and agencies have committed to bolstering FDA review capabilities for biologics and CGT, better characterizing evidentiary standards required for novel technologies, and updating payment systems for certain types of CGTs. However, many stakeholder-supported proposals to streamline development for and access to CGTs are still in concept phases.  In part, this is because the individualized nature of many CGT products makes it difficult to establish scientific standards and regulations that apply broadly to a class of technologies. As a result, product sponsors continue to operate with uncertainty regarding development and facing challenges to market access.</p>
<h2>Key Considerations</h2>
<p>Considering the growing market interest in CGTs, sponsors continue evidence generation planning even though added clarity from regulatory or legislative updates lag behind innovation in the sector. Therefore, it is particularly important for sponsors to identify inflection points during early product development that will influence downstream commercial outcomes. The questions below highlight three such inflection points and describe how a sponsor’s answer to each question may have both regulatory and market access implications.</p>
<h3>Who are the intended patients, and how does that shape regulatory and commercial viability?</h3>
<p>CGTs often target rare, complex diseases that have a high unmet medical need. As such, a clear understanding of the number and types of patients who may benefit is pivotal to the potential evidence development and access hurdles for the product. Additionally, data collection must balance limited available patients with a demonstration of clinically meaningful benefits in the intended treatment population. Therefore, market sizing, particularly for products targeting extremely rare diseases, is an important early sponsor determination when developing an evidence strategy. Other factors important to this determination include demographic characteristics of the target populations, their <a href="https://advisory.avalerehealth.com/insights/socioeconomic-factors-may-impact-patient-access-to-cell-therapies">socioeconomic circumstances</a> and geographic distribution, and potential access barriers resulting from a limited network of accessible treatment sites. Understanding and planning for these factors early in development will help sponsors reduce future market access and provider uptake barriers.</p>
<h3>What FDA regulatory flexibilities can be leveraged to streamline clinical development and filing?</h3>
<p>The therapeutic potential of some CGTs provides an opportunity to redefine the current standard of care, filling existing unmet medical needs. This opens doors for manufacturers and FDA to realign on the evidence required for an approval decision. However, there continues to be uncertainty regarding FDA’s approach to risk-benefit assessments and data expectations, given the unique challenges faced by these products and the patients they serve. Currently, sponsors may seek eligibility for relevant <a href="https://advisory.avalerehealth.com/insights/understanding-the-history-and-use-of-the-accelerated-approval-pathway">expedited development</a> and review designations to gain flexibility and increased engagement with FDA regarding data submissions. Electing one of these routes is often beneficial for timely patient access, especially when the target population may be small and data collection is difficult. However, these methods demand proactive, ongoing evidence generation plans and early engagement with FDA to understand clinical trial design and data requirement flexibilities acceptable to the agency.</p>
<h3>How will the product be covered, paid for, and ultimately used by healthcare providers?</h3>
<p>The potential value that a CGT may bring to the healthcare system in the long run is still difficult for stakeholders to determine in the absence of long-term real-world evidence. Sponsors will need to determine the value proposition of their therapy for the patient population relative to the patient’s journey from diagnosis to treatment, including mapping out any access barriers patients may face and medical alternatives available on the market. This understanding can help sponsors formulate reimbursement strategies during the clinical phases of development. For example, Avalere has evaluated how <a href="https://advisory.avalerehealth.com/insights/cms-proposes-significant-changes-to-reimbursement-mechanisms-for-car-t">CAR-T reimbursement</a> continues to evolve and set precedents for value-based payment strategies; these may become increasingly popular as CGTs gain more presence in the marketplace. Sponsors will also need to consider eligibility for Medicare reimbursement mechanisms such as the New Technology Add-on Payment (<a href="https://advisory.avalerehealth.com/insights/ntap-eligibility-criteria-opportunities-for-inpatient-reimbursement">NTAP</a>), pass-through payment status, or outlier payments that would apply to their therapy, which can serve to support providers in <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-continues-to-evolve-in-fy-2023-ipps-proposed-rule">covering the cost</a> of CGTs.</p>
<p>Even with adequate coverage and reimbursement parameters, healthcare providers and patients may face challenges accessing CGTs. Facilities may require additional investments in staffing, training, or equipment to administer and store these specialty products. Where possible, sponsors are encouraged to support providers and their staff in understanding requirements for handling and administration of these therapies, ultimately helping to mitigate uptake barriers.</p>
<h2>Policy Outlook</h2>
<p>The policy environment will also influence how sponsors approach these three questions.</p>
<p>For example, collaboration between manufacturers and the FDA has been increasing over recent years, with pilot programs aiming to increase dialogue between sponsors and the agency on data requirements, speed review times, mitigate deficiency letters, and better characterize clinical development in rare, hard-to-treat diseases.</p>
<p>Other proposed policies could have direct impacts on CGTs, such as a pilot program included in the proposed <a href="https://www.congress.gov/bill/117th-congress/senate-bill/3799/text#toc-idE9CEDF7A4E134E0885F25A50A5BBE5B9">PREVENT Pandemics Act</a> that would implement an advanced manufacturing technologies  designation program. This would provide an expedited FDA pathway for products utilizing a specific platform technology with the potential to streamline development and reduce the regulatory review burden. Other bills include Cures 2.0, with a plethora of potential advancements, including an FDA mandate to report foreseeable challenges to CGT to Congress.</p>
<p>In addition, CGT stakeholders should monitor FDA regulatory guidance (e.g., <a href="https://www.fda.gov/regulatory-information/search-fda-guidance-documents/considerations-development-chimeric-antigen-receptor-car-t-cell-products">draft guidance on development of CAR-T therapies</a>) and value assessment reports by groups such as the Institute for Clinical and Economic Review (e.g., <a href="https://icer.org/news-insights/press-releases/car-t-final-report/">report on the need for affordability and access solutions</a>). These materials may provide insight into the scientific and clinical standards required for regulatory approval of products and perspectives on value-based price benchmarks, respectively. Monitoring and assessing these key developments as they occur can help CGT stakeholders navigate the landscape and allocate resources efficiently during commercial launch planning.</p>
<h2>Conclusion</h2>
<p>CGT development requires an outsized role for early sponsor planning, given the scientific complexity, niche disease targets, and general regulatory uncertainty that these technologies face in the marketplace. Avalere has extensive expertise in evidence generation strategies, market access planning, and policy analysis to support clients in developing comprehensive solutions.</p>
<p>To learn more about how Avalere can support you, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>
<p>The post <a href="https://advisory.avalerehealth.com/insights/cell-and-gene-therapy-fundamental-development-questions-for-sponsors">Cell and Gene Therapy: Fundamental Development Questions for Sponsors</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>The Evolving Cell &#038; Gene Therapy Market   </title>
		<link>https://advisory.avalerehealth.com/webinars/navigating-the-evolving-cell-gene-therapy-market</link>
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		<dc:creator><![CDATA[cturner]]></dc:creator>
		<pubDate>Tue, 03 May 2022 15:48:08 +0000</pubDate>
				<category><![CDATA[Webinars]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=25818</guid>

					<description><![CDATA[<p>With 8 cell and gene therapies on the market, over 450 unique products in clinical development, and 50 approvals expected by 2030, the CGT market is growing rapidly. Products currently in clinical development include autologous and allogeneic cell therapies and in-vivo and ex-vivo gene therapies administered across settings of care (i.e., inpatient, HOPD, physician office,&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/webinars/navigating-the-evolving-cell-gene-therapy-market">The Evolving Cell &#038; Gene Therapy Market   </a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>With 8 cell and gene therapies on the market, over 450 unique products in clinical development, and 50 approvals expected by 2030, the CGT market is growing rapidly.</p>
<p>Products currently in clinical development include autologous and allogeneic cell therapies and in-vivo and ex-vivo gene therapies administered across settings of care (i.e., inpatient, HOPD, physician office, and pharmacy) with indications for oncology, metabolic disorders, hematology, rare disease, and other various diseases.</p>
<p>Join our webinar, which dives into how to overcome challenges that this significant pipeline presents for stakeholders such as:</p>
<ul style="margin-bottom: 30px;">
<li>Limitations related to small clinical trial populations</li>
<li>Current reimbursement frameworks</li>
<li>Budget impacts</li>
<li>Narrow sites of care</li>
<li>Manufacturing inefficiencies that will have implications for the broader healthcare system</li>
</ul>
<p>We will also cover ways to help stakeholders looking to reimagine FDA-approval processes, develop innovative financing solutions, and standardize manufacturing to optimize time to treatment.</p>
<p>We look forward to seeing you there!</p>
<p>The post <a href="https://advisory.avalerehealth.com/webinars/navigating-the-evolving-cell-gene-therapy-market">The Evolving Cell &#038; Gene Therapy Market   </a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>CAR-T Reimbursement Continues to Evolve in FY 2023 IPPS Proposed Rule</title>
		<link>https://advisory.avalerehealth.com/insights/car-t-reimbursement-continues-to-evolve-in-fy-2023-ipps-proposed-rule</link>
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		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Thu, 28 Apr 2022 16:09:32 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=25774</guid>

					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-continues-to-evolve-in-fy-2023-ipps-proposed-rule">CAR-T Reimbursement Continues to Evolve in FY 2023 IPPS Proposed Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
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			<p>In the fiscal year (FY) 2023 Inpatient Prospective Payment System (IPPS) proposed rule, the Centers for Medicare &amp; Medicaid Services (CMS) proposed continuing to use its Medicare Severity Diagnosis-Related Group (MS-DRG) for Chimeric Antigen Receptor T-cell (CAR-T) treatment stays, with differential reimbursement based on whether the product was provided as part of a clinical trial. This year, the CMS proposed a return to using recent spending data (from 2021) to establish the relative weight for the MS-DRG after skipping use of 2020 data, which was impacted by the COVID-19 pandemic’s effects on inpatient utilization patterns. The CMS did not propose adding any additional procedure codes affecting pre-Major Diagnostic Category MS-DRG 018, “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies,” though utilization of 2021 data will result in reimbursement incorporating additional treatments and cases. The financial impact of these changes will vary by hospital, and reimbursement may continue to fall short of fully recognizing provider costs of treatment in some cases.</p>
<h2>Background</h2>
<p>Since the first Food &amp; Drug Administration (FDA) approval of a CAR-T product in 2017, concerns have persisted over how the Medicare program would reimburse for these products, which are currently administered in the inpatient setting and have a significant cost for providers (e.g., $373,000 average sales price for 1 indication). Hospital inpatient reimbursement is calculated on an episodic basis using a MS-DRG base payment rate that is adjusted for factors such as hospital geography, <a href="https://advisory.avalerehealth.com/insights/ntap-eligibility-criteria-opportunities-for-inpatient-reimbursement">new technology add-on payment</a> (NTAP), and outlier payments.</p>
<p>In FY 2022, inpatient stays with CAR-T treatment are assigned to DRG 018 (Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies), which has a base reimbursement rate of $246,955. Hospitals may receive additional payments for 2 products with NTAP status (Tecartus<sup>TM</sup> and Abecma<sup>®</sup>); however, the NTAP is limited to 65% of the product cost. Outlier payments are available to hospitals to cover extremely costly cases in which the costs exceed the MS-DRG payment, the NTAP amount (if applicable), and the fixed-loss threshold of $30,988. Even with these adjustments, Medicare reimbursement for CAR-T cases today sometimes fails to cover total hospital costs, with potential negative impacts on provider uptake and patient access.</p>
<h2>Proposed FY 2023 Changes</h2>
<p>For FY 2023, the CMS proposed several policies that would impact provider reimbursement for CAR-T.</p>
<h3>Payment Changes for CAR-T Cases</h3>
<p>As a result of an increase to the proposed base operating and capital rates for all IPPS payments and a slight decrease in the proposed relative weight for MS-DRG 018, the proposed base payment for CAR-T cases in FY 2023 would increase by 0.8% to $248,806. However, the CMS proposed increases to the fixed-loss amount, which raises the threshold for outlier payments to be issued. The CMS proposed to increase the fixed-loss amount from $30,988 to $43,214 (a 39% increase) in FY 2023 using a methodology leveraging pre-public health emergency inflation estimates. If the CMS were to use an alternative approach incorporating public health emergency-era data, the fixed-loss amount would be $58,798 (a 90% increase). The CMS requested comment from stakeholders on which approach to use for FY 2023. For CAR-T cases, which are more likely than other inpatient stays to qualify for outlier payments, this could lead to lower overall reimbursement in FY 2023, as illustrated in Figure 1 below.</p>
<h3>Use of 2021 Data to Establish Payment</h3>
<p>The CMS proposed using 2021 Medicare Provider Analysis and Review (MedPAR) data to set relative weights for MS-DRGs. Additionally, the CMS proposed setting relative weights by first calculating the weights with all COVID-19 stays included in the data, then calculating relative weights excluding COVID-19 stay, and averaging the 2. The use of more recent data means that the hospital charge data incorporates utilization of 3 additional products for non-clinical trial cases—Tecartus<sup>TM</sup>, Breyanzi<sup>TM</sup>, and Abecma<sup>®</sup>—that were not FDA approved in 2019, which previously formed the basis of FY 2022 reimbursement calculations.</p>
<h3>Adjustment for Clinical Trial Cases</h3>
<p>The CMS proposed continuing to reimburse for CAR-T clinical trial cases, which do not incur drug costs, at a lower rate than non-clinical trial cases. The CMS stated in the FY 2023 proposed rule that, based on a review of 2021 MedPAR data, clinical trial cases for CAR-T treatment typically cost 20% of non-clinical trial cases and therefore proposed applying an adjustment factor of 0.20 to the relative weight of MS-DRG 018 for these cases. If finalized, this would be an increase over the current adjuster of 0.17 and would result in a base rate for clinical trial cases of $49,761 in FY 2023, a 19% increase over FY 2022.</p>
<h3>Product NTAP Decisions</h3>
<p>Two CAR-T therapies with NTAP status for FY 2022 will continue in FY 2023:</p>
<ul>
<li>Abecma<sup>® </sup>(idecabtagene vicleucel), for treatment of relapsed/refractory multiple myeloma</li>
<li>Tecartus<sup>TM</sup> (brexucabtagene autoleucel), for treatment of relapsed/refractory mantle cell lymphoma</li>
</ul>
<p>The CMS will accept public comment on whether the following CAR-T product meets the newness, cost, and clinical improvement criteria required for NTAP status in FY 2023:</p>
<ul>
<li>Carvykti<sup>TM</sup> (ciltacabtagene autoleucel), for treatment of relapsed/refractory multiple myeloma</li>
</ul>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="1133" height="751" src="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/IPPS-CAR-T.png" class="vc_single_image-img attachment-full" alt="" title="IPPS CAR-T" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/IPPS-CAR-T.png 1133w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/IPPS-CAR-T-300x199.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/IPPS-CAR-T-1024x679.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/IPPS-CAR-T-768x509.png 768w" sizes="(max-width: 1133px) 100vw, 1133px" /></div><figcaption class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2022 vs. Proposed FY 2023</figcaption>
		<span class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2022 vs. Proposed FY 2023</span></figure>
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			<p class="figure-note" style="padding-bottom: 5px;">Figures not to scale.</p>
<p class="figure-note" style="padding-bottom: 5px;">Assumptions:</p>
<ul style="font-size: 0.9em !important;">
<li class="figure-note" style="font-size: 1em;">Hospital charges for CAR-T episode are kept constant across all examples, consistent with the geometric mean charges included in the FY 2023 Final Rule AOR/BOR file ($1,404,657)</li>
<li class="figure-note" style="font-size: 1em;">Hospital has an average operating and capital cost-to-charge ratio of 0.3​</li>
<li class="figure-note" style="font-size: 1em;">Hospital has an indirect medical education adjustment factor of 0.2 and disproportionate share hospital adjustment of 0.05​</li>
<li class="figure-note" style="font-size: 1em;">Hospital area wage index is 1.0</li>
</ul>
<h2>Key Considerations Looking Ahead</h2>
<p>Stakeholders should consider several outstanding questions and potential implications stemming from the proposed FY 2023 changes for existing assets and for future cell and gene therapies.</p>
<ul>
<li><strong>Stability of MS-DRG 018: </strong>The proposed FY 2023 base rate for MS-DRG 018 is generally aligned with FY 2022 levels, though changes to the outlier threshold could result in overall decreases in payment. Total reimbursement will vary by hospital and case, with adequate reimbursement in some cases but with potential financial risk for hospitals on significantly costly cases. In the future, inclusion of additional immunotherapies that could be mapped to MS-DRG 018 may lead to fluctuations in the base rate. Several stakeholders have also submitted comments raising concerns about how the CMS would address an inpatient gene therapy that maps to MS-DRG 018 but has significantly different costs. With a robust pipeline of cell and gene therapies, the CMS may be forced to confront reimbursement challenges or alternative approaches in the near future.</li>
<li><strong>Combined NTAP Consideration: </strong>In cases where 2 products under consideration for NTAP are viewed as substantially similar (i.e., have the same targeted therapeutic outcome, same or similar mechanism of action, and map to the same MS-DRG), the CMS may consider those products as a single application for the purposes of NTAP. In this proposed rule, the CMS is collecting feedback on whether Carvykti<sup>TM</sup> (ciltacabtagene autoleucel; NTAP requested) and Abecma<sup>®</sup> (idecabtagene vicleucel; existing NTAP) are substantially similar. If the CMS determines that they are, the decision could narrow the period of NTAP eligibility for Carvykti<sup>TM</sup> and may impact the maximum NTAP for both products. As more CAR-Ts come to market, it may become increasingly difficult for manufacturers to demonstrate NTAP eligibility based on established criteria and providers may be less likely to benefit from max NTAP payments.</li>
<li><strong>Alternative Payment and Value-Based Arrangements: </strong>Starting on July 1, 2022, the Medicaid Value-Based Purchasing flexibilities to implement value-based arrangements in the commercial and Medicaid markets will go into effect. In the coming years, the CMS may consider whether innovative financing approaches should extend to the Medicare Fee-for-Service or Medicare Advantage space, potentially through a Center for Medicare &amp; Medicaid Innovation demonstration.</li>
<li><strong>Potential for Shifts in Site of Care</strong>: As CAR-T treatment toxicity profiles increasingly make a move to outpatient sites of care more viable, providers may face different financial risk considerations. However, a shift in volume toward the outpatient setting may also result in increased scrutiny on Medicare payment in that setting, potentially resulting in changes to current reimbursement, which is average sale price plus 6 percent for separately payable drugs.</li>
</ul>
<p>To stay up to date with the latest developments in the IPPS proposed rule, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>

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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/car-t-reimbursement-continues-to-evolve-in-fy-2023-ipps-proposed-rule">CAR-T Reimbursement Continues to Evolve in FY 2023 IPPS Proposed Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Socioeconomic Factors May Impact Patient Access to Cell Therapies</title>
		<link>https://advisory.avalerehealth.com/insights/socioeconomic-factors-may-impact-patient-access-to-cell-therapies</link>
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		<pubDate>Tue, 12 Apr 2022 18:50:26 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
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					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/socioeconomic-factors-may-impact-patient-access-to-cell-therapies">Socioeconomic Factors May Impact Patient Access to Cell Therapies</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
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			<p>Patients requiring treatment with innovative cell and gene therapies can access them at a limited number of authorized treatment centers (ATCs) and often require support before, during, and following treatment. Some patients may need to travel significant distances to access an authorized site (sometimes across state lines), and patients may face other barriers associated with financial resources, caregiver support, transportation, or lost wages. In a previous <a href="https://advisory.avalerehealth.com/insights/advancements-in-cell-therapies-require-new-patient-support-solutions">analysis</a>, Avalere focused on the geographic barriers to treatment, highlighting the median average distance patients must travel to a treatment site by census region and the potential need for patient support services that take into account treatment costs, patient travel, non-drug expenses, long-term follow-up, and care coordination.</p>
<p>A new Avalere analysis of patients with multiple myeloma (MM) focuses on barriers to treatment beyond geographic location. In this analysis, potentially eligible Medicare Fee-for-Service (FFS) patients were subdivided into distance-based cohorts based on their driving time to cell therapy treatment sites. Avalere assessed demographic factors and other socioeconomic characteristics between groups. Avalere found that certain patients who live near a treatment site and are potentially eligible for cell therapy may face barriers to obtaining novel treatment despite their relative proximity to the center. Individuals living nearest to treatment sites were disproportionately Black and Hispanic compared to those living more than 2 hours from a site and were from areas with fewer adults in the household, more single householders, and lower vehicle ownership, which could impact access and outcomes.</p>
<h2>Background</h2>
<p>Given the requirement for monitoring patients following administration of a chimeric antigen receptor T-cell (CAR-T) product, cell therapies must be administered at highly regulated ATCs. ATCs represent a limited subset of medical centers that typically receive both manufacturer certification and third-party accreditation (e.g., Foundation for the Accreditation of Cellular Therapy accreditation), requiring providers to meet specific training requirements and have the ability to safely manage adverse events. These sites must also satisfy Food &amp; Drug Administration risk evaluation and mitigation strategy requirements. Many ATCs are currently located in urban areas within large hospital systems or academic medical centers. Some eligible patients may need to travel significant distances to access care, but sizeable populations of eligible patients also live in urban or suburban communities with relatively shorter distances to travel for treatment. While emphasis has been placed on solving access issues for rural patients, other factors may impact access for those living close to a treatment center.</p>
<h2>Analysis Findings</h2>
<p>The analysis focused on previously treated MM patients enrolled in Medicare FFS between 2014 and 2019. Avalere analyzed demographic information for these patients living at various driving distances from potential cell therapy ATCs. Additionally, Avalere assessed socioeconomic factors for the locality where each patient resided. This assessment was undertaken with the goal of identifying factors beyond driving time to a treatment site that could contribute to access barriers and may need to be addressed to ensure equitable access. Key findings include:</p>
<ul>
<li><strong>Differences in Race/Ethnicity by Proximity to Treatment Center</strong>: When comparing previously treated MM patients living within 30 minutes of a treatment site and those living more than 2 hours from a site, a larger share of non-White populations (approximately 40% of Black and Hispanic patients) were in the cohort living nearest the treatment site compared to White patients (22%). Given well-documented associations between race/ethnicity and the risk of poor health outcomes, limited earning potential, and other associated impacts, it is important to take into account the unique barriers to care and needs for patients of color.<sup>1,2,3</sup></li>
</ul>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="1289" height="515" src="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_1.png" class="vc_single_image-img attachment-full" alt="" title="CAR-T_1" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_1.png 1289w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_1-300x120.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_1-1024x409.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_1-768x307.png 768w" sizes="(max-width: 1289px) 100vw, 1289px" /></div><figcaption class="wpb_single_image_caption">Figure 1. Race/Ethnicity of Eligible Medicare Patients by Distance to Nearest Treatment Center, 2014–2019</figcaption>
		<span class="wpb_single_image_caption">Figure 1. Race/Ethnicity of Eligible Medicare Patients by Distance to Nearest Treatment Center, 2014–2019</span></figure>
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			<ul>
<li><strong>Differences in Caregiver Availability: </strong>Many MM patients accessing cell therapy will require an extended stay near a treatment site and would benefit from a caregiver to assist with transportation and support afterwards. In an assessment of household characteristics, Avalere found that among previously treated MM patients living nearest a treatment site, there were a higher share of single householders, fewer adults per household, and lower marriage rates, potentially indicating less caregiver support in the home.</li>
</ul>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="1284" height="542" src="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_2.png" class="vc_single_image-img attachment-full" alt="" title="CAR-T_2" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_2.png 1284w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_2-300x127.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_2-1024x432.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_2-768x324.png 768w" sizes="(max-width: 1284px) 100vw, 1284px" /></div><figcaption class="wpb_single_image_caption">Figure 2. Percentage of Single Householders</figcaption>
		<span class="wpb_single_image_caption">Figure 2. Percentage of Single Householders</span></figure>
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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="1280" height="542" src="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_3.png" class="vc_single_image-img attachment-full" alt="" title="CAR-T_3" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_3.png 1280w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_3-300x127.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_3-1024x434.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2022/04/CAR-T_3-768x325.png 768w" sizes="(max-width: 1280px) 100vw, 1280px" /></div><figcaption class="wpb_single_image_caption">Figure 3. Average Number of Adults per Household</figcaption>
		<span class="wpb_single_image_caption">Figure 3. Average Number of Adults per Household</span></figure>
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			<ul>
<li><strong>Transportation Options</strong>: Compared to previously treated MM patients living more than 2 hours from a treatment site, those living within closer proximity of a site were from areas with lower levels of vehicle ownership (13% of households with no vehicle). Conversely, individuals living more than 2 hours away were more likely to own 2 or more vehicles, and thus have multiple options for traveling to access treatment. While individuals living close to ATCs may have access to public transportation or ride-sharing options, these may not be preferred modes of transport following treatment or could become a cost burden over the course of pre- and post-treatment visits. Additionally, significant variance exists in the comprehensiveness and reliability of public transportation options by city.</li>
<li><strong>Differences in Income</strong>: Black and Hispanic MM patients living in a 30-minute radius were found to reside in areas with lower median household income than White patients living at a similar distance, indicating a high need particularly among minority patients that are close to treatment centers. When adjusting for cost of living, Black patients’ median household income in this distance range was $48,231 and Hispanic patients&#8217; was $43,387, compared to $71,084 for White patients. Incomes for Black and Hispanic patients in these areas were also lower than those of White patients living more than 2 hours from a treatment site.</li>
</ul>
<h2>Key Considerations for Patient Support and Policy</h2>
<ul>
<li>These findings highlight the importance of considering factors beyond driving time or distance from a treatment site when crafting patient support offerings for cell and gene therapies. Access to cell therapy can be impeded by other factors such as affordability, transportation options, and lack of caregiver support. Successful patient support strategies are likely to be those that provide patients with multiple options for support and incorporate considerations related to factors such as patient age, language, race and ethnicity, and income status.</li>
<li>Given that current patient support services offered by ATCs and patient organizations are limited and have been subject to significant strain during the COVID-19 pandemic, future investments in new and more comprehensive support services may be necessary as the demand for CAR-T therapy increases and as more cell and gene therapies are brought to market. Specifically, policymakers should consider whether current regulatory barriers limit support options for patients living at different distances from treatment centers and assess the impact of amending existing policies or creating exemptions to better allow stakeholders to address social determinants of health and non-physical barriers to accessing care.</li>
<li>Policies affecting access to treatment and patient support could also be assessed to determine whether the policy would unintentionally contribute to racial or socioeconomic inequities in access to care.</li>
</ul>
<p><em>Funding for research provided by Janssen Pharmaceuticals. Avalere Health retained full editorial control.</em></p>
<p>To receive Avalere updates, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>
<h2>Methodology</h2>
<p>Using data from 2014–2019, Avalere identified a population of previously treated MM patients. FFS beneficiaries were identified using the 100% file of Medicare FFS Parts A and B data, accessed via a research-focused data use agreement with the Centers for Medicare &amp; Medicaid Services, and commercial, Medicare Advantage, and Medicaid managed-care members were identified using medical claims from the Inovalon MORE<sup>2</sup> Registry®, a large scale, real-world multi-payer dataset comprising medical, pharmacy, and lab claims, as well as clinical data on more than 332 million de-identified patients.</p>
<p>Identified MM patients were placed into distance-based cohorts using average drive-time calculations to the closest prospective treatment site. Avalere leveraged the Acxiom database to assess socioeconomic factors in the relevant geographic areas in which each individual resides.</p>
<h2>Notes</h2>
<ol>
<li>Centers for Disease Control, “<a href="https://www.cdc.gov/coronavirus/2019-ncov/community/health-equity/race-ethnicity.html#fn1">Health Equity Considerations and Racial and Ethnic Minority Groups</a>,” April 2021.</li>
<li>Agency for Healthcare Research and Quality, “Priority Populations: Racial/Ethnic Minorities,” June 2021.</li>
<li>Williams, D., et al. “<a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4817358/">Understanding Associations between Race, Socioeconomic Status, and Health: Patterns and Prospects</a>,” <em>Health Psychology</em>, Division of Health Psychology, American Psychological Association, 35(4), 407–411.</li>
</ol>

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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/socioeconomic-factors-may-impact-patient-access-to-cell-therapies">Socioeconomic Factors May Impact Patient Access to Cell Therapies</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Cell and Gene Therapy in Oncology, Part III</title>
		<link>https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-iii-2</link>
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		<dc:creator><![CDATA[cturner]]></dc:creator>
		<pubDate>Wed, 29 Sep 2021 14:36:18 +0000</pubDate>
				<category><![CDATA[Videos]]></category>
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					<description><![CDATA[<p>To listen to this video as a podcast, please visit our podcast page.</p>
<p>The post <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-iii-2">Cell and Gene Therapy in Oncology, Part III</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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<p>The post <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-iii-2">Cell and Gene Therapy in Oncology, Part III</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Cell and Gene Therapy in Oncology, Part III</title>
		<link>https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-iii</link>
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		<dc:creator><![CDATA[cturner]]></dc:creator>
		<pubDate>Wed, 29 Sep 2021 14:32:49 +0000</pubDate>
				<category><![CDATA[Interviews]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=23642</guid>

					<description><![CDATA[<p>This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page. If you would like to watch the video version, please visit our video page. Transcription: Amelia Nell Hello and welcome to another episode&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-iii">Cell and Gene Therapy in Oncology, Part III</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><em>This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our <a href="https://pages.avalere.com/Insight-Settings.html">Insight Subscription</a> page.</em></p>
<p>If you would like to watch the video version, please visit our <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-iii-2">video page</a>.</p>
<h1>Transcription:</h1>
<h2>Amelia Nell</h2>
<p>Hello and welcome to another episode of the Avalere Health Essential Voice Disease Education series. In this series, we will be covering topics on a wide range of different therapeutic focus areas.</p>
<p>My name is Amelia Nell and I&#8217;m a senior associate in our policy practice here at Avalere Health. And I&#8217;m joined today by Brigit Kyei-Baffour, an associate principal in our market access practice, and Michael Kearney, a consultant in our market access practice.</p>
<p>Welcome to you both. In our last video, we had explored opportunities to pursue value-based arrangements for cell and gene therapies, and today we&#8217;ll explore the need for patient support when it comes to CGTs and the role that manufacturers and other stakeholders can play in providing that support.</p>
<p>So to start us off, Michael, wondering if you could tell us a bit about how patients access treatment for cell and gene therapies today and why that might look different from other treatments.</p>
<h2>Michael Kearney</h2>
<p>Great question, Amelia. A major differentiating factor is actually the number of authorized treatment centers. Usually there&#8217;s a fairly small subset of providers or sites that can actually administer these treatments.</p>
<p>Specifically for CAR-T, those providers need to be a part of a accredited organization through the Foundation for the Accreditation of Cellular Therapy. Also, in some cases, for other CAR-T, a lot of these require a REMS requirement and specific capabilities that providers must manage, like side effects like cytokine release syndrome.</p>
<p>So being able to manage these types of considerations is also something that patients will need to consider as they&#8217;re looking to potentially receive CAR-T treatment. For gene therapies, while these are oftentimes administered in the outpatient setting, I think there&#8217;s still that kind of limiting factor in the number of specialists who can actually provide these treatments. And that goes for the same for CAR-T as well.</p>
<p>And what does this mean for patients? I think given the limited number of treatment centers out there for both CAR-T cell therapy and gene therapy, patients have to consider not only what they&#8217;re paying for these drugs, but also how are they going to get to the treatment centers? Transportation, lodging, meal plans, things like that are all considered potential barriers for patients getting these types of therapies.</p>
<h2>Brigit Kyei-Baffour</h2>
<p>Those are all great points, Michael, and I would say in addition to the cost sharing for these products, these therapies can be quite high. It is possible for patients to reach their deductible or even their out-of-pocket max in a single appointment. And of course that can be a challenge for many patients who may not have disposable funds.</p>
<p>And it&#8217;s also important to keep in mind that many patients eligible for cell and gene therapies may have already completed previous lines of treatment and subsequently exhausted their funds at that time. And so these are definitely factors that weigh heavily on patients in terms of thinking about access to care and what some of the respective barriers might be.</p>
<h2>Amelia Nell</h2>
<p>Thanks Brigit and Michael. I think that was very helpful and I think given all the challenges that you just outlined, what type of support is there currently available for a lot of these cell and gene therapy patients?</p>
<h2>Brigit Kyei-Baffour</h2>
<p>Amelia, that&#8217;s a great question. There are varying levels of support that are provided by different entities. So I&#8217;ll spend some time talking about the patient support programs first, the manufacturer patient support programs. They can provide a wide range of support offerings that could include financial support such as copay or cost-share support that helps patients meet their out- of- pocket cost-share liability.</p>
<p>There&#8217;s also reimbursement support that&#8217;s provided to providers to help with things like benefit verification and prior authorization, sometimes field team support and coordination with specialty pharmacies.</p>
<p>There is also treatment journey care coordination that is typically provided via care teams that are assigned or designated to patients to help with things like understanding their insurance coverage, identifying insurance, helping with coordinating office visits and any follow-up support.</p>
<p>There&#8217;s also free drug programs for uninsured and underinsured patients to help with providing access to therapies. And what we&#8217;re seeing more and more recently is access to care offerings such as site-of-care locators or provider identification tools that help patients identify providers and treatment facilities to help them access treatments in addition to transportation support.</p>
<p>Michael, is there anything else you&#8217;d like to add here?</p>
<h2>Michael Kearney</h2>
<p>Yeah, specifically on the transportation piece, I think a number of manufacturers are looking to offer these types of services. I know that some are already, but even with that, they are limited in some respect.</p>
<p>So oftentimes, as we found in some research that we&#8217;ve done, patients are having to travel far and wide to reach these types of treatment centers. And there are certain restrictions around what manufacturers can offer in terms of transportation support services.</p>
<p>So while they&#8217;re a start, there&#8217;s certainly a lot more out there in terms of what can currently be done to make sure that these patients are actually receiving the transportation support that they need.</p>
<h2>Brigit Kyei-Baffour</h2>
<p>And I would say in addition to that, in addition to manufacturer support programs, there&#8217;s also patient advocacy groups. And these groups can provide also a range of services to qualified patients that can span from copay relief to help alleviate out-of-pocket burden.</p>
<p>They&#8217;re also providing case management services to help patients with insurance re-enrollment and also helping them understand their coverage benefits. And they&#8217;re also providing nonmedical expense support similarly to the manufacturer patient support that can help provide support with things like transportation and cost-of-living expenses.</p>
<h2>Michael Kearney</h2>
<p>Yeah. I think in terms of other types of entities offering services, hospital systems themselves are certainly starting to offer services, things like social services. Just making sure as patients come in, particularly those heavily seen in the Medicaid space coming in, getting support to make sure that they understand what types of tools are out there is certainly a first step in ensuring that patients are at least getting access to these and know about them.</p>
<p>Some health systems are even building off of what I mentioned before about transportation. Some are adding transportation services, but I think there certainly is a gap in the understanding of where these patients are coming from.</p>
<p>And so I think that transportation piece is something that is going to continue to be built out as more and more cell and gene therapies come to market.</p>
<p>And then coordination of care. We&#8217;ve spoken to a number of people in the marketplace specifically around coordinating care. And as you&#8217;re looking to help patients through the entirety of the patient journey, not just diagnosis, but through first, second, third line of care, and potentially by the time they get to CAR-T, offering services to make sure that the patient has a smooth transition throughout that and understand all the respective components to make sure that they&#8217;re receiving the adequate care that they need to for the best possible outcome.</p>
<h2>Amelia Nell</h2>
<p>Yeah, thanks Michael. And sort of building off that last question, one last question for you and Brigit. How do you expect patient support for these therapies to develop in the future? And I&#8217;m thinking in particular, how can manufacturers or what can manufacturers do to assist these patients?</p>
<h2>Brigit Kyei-Baffour</h2>
<p>Yeah, that&#8217;s a great question, Amelia. I think in the future, we&#8217;ll likely see manufacturers developing more innovative and comprehensive ways to provide support that sort of expand beyond some of the traditional modes of patient support.</p>
<p>And I think we&#8217;re starting to see increased flexibilities allowed via the OIG public opinions, which I will caveat that those are specific to, or can be specific to a manufacturer specific to a program.</p>
<p>I think they are a good indicator that there is a potential path forward for manufacturers to be able to address some of the socioeconomic risk factors that patients may experience across payer channels.</p>
<p>And these programs can be used to help close the gap on some of the health disparities that hinder access to care. And so as we&#8217;re starting to see more to Michael&#8217;s point in the realm of transportation support, helping with lodging and meals and things of that nature, more partnerships with community-based organizations, I think that that&#8217;ll be something that will continue to trend in the future.</p>
<h2>Michael Kearney</h2>
<p>Yeah, and building on that a little bit, leveraging not only claims data, but socioeconomic status data to pinpoint specific areas and affordability barriers that patients face. We know, based on research that we&#8217;ve done, that given the concentration of these qualified treatment centers, FACT- accredited sites, they&#8217;re in certain parts of the country and that may not be easy for a lot of folks to get to.</p>
<p>And then you layer on socioeconomic factors to that. Obviously that burden exacerbates a little bit. So leveraging real-world claims data and socioeconomic status data to help really understand the patient population, I think will really be a benefit for manufacturers as they&#8217;re looking to build out additional support services to ensure that they&#8217;re reaching patients in an adequate manner.</p>
<h2>Amelia Nell</h2>
<p>Well, thank you Brigit and Michael. I really appreciate the discussion on patient support services. That wraps up our three-part series on cell and gene therapies, but we do continue to work on these therapies daily with a wide variety of engagements with our clients, and we welcome listeners or viewers to reach out with questions or if you&#8217;d like to discuss any of the topics covered today.</p>
<h2>Amelia Nell</h2>
<p>So thank you for tuning in to Avalere Health Essential Voice, and please stay tuned for more episodes in our Disease Education series. And if you would like to learn more, please visit us at avalere.com/podcasts.</p>
<p>The post <a href="https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-iii">Cell and Gene Therapy in Oncology, Part III</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>CMS Updates CAR-T Reimbursement for 2022 in IPPS Final Rule</title>
		<link>https://advisory.avalerehealth.com/insights/cms-updates-car-t-reimbursement-for-2022-in-ipps-final-rule</link>
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		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Tue, 07 Sep 2021 17:06:25 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=23368</guid>

					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/cms-updates-car-t-reimbursement-for-2022-in-ipps-final-rule">CMS Updates CAR-T Reimbursement for 2022 in IPPS Final Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<div class="wpb-content-wrapper"><div class="vc_row wpb_row vc_row-fluid wpex-relative"><div class="wpb_column vc_column_container vc_col-sm-12"><div class="vc_column-inner"><div class="wpb_wrapper">
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			<p>In the fiscal year (FY) 2022 Inpatient Prospective Payment System (IPPS) final rule, the Centers for Medicare &amp; Medicaid Services (CMS) finalized <a href="https://advisory.avalerehealth.com/insights/cms-introduces-changes-to-car-t-reimbursement-in-ipps-proposed-rule">proposals</a> to continue utilizing its <a href="https://advisory.avalerehealth.com/insights/cms-proposes-significant-changes-to-reimbursement-mechanisms-for-car-t">newly established</a> Medicare Severity Diagnosis-Related Group (MS-DRG) for CAR-T treatment stays, with differential reimbursement based on whether the product was provided as part of a clinical trial. However, the CMS will use 2019 spending data to establish the relative weight for the MS-DRG rather than using 2020 spending data, due to the impact of the COVID-19 pandemic on inpatient utilization patterns in 2020. Additionally, the CMS will add additional procedure codes affecting pre-Major Diagnosis Category MS-DRG 018 and will rename the MS-DRG to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies” to account for these changes. The financial impact of these changes will vary by hospital and in some cases may continue to fall short of fully recognizing provider costs of treatment. This policy will impact the way future inpatient cell-based immunotherapies are paid by Medicare, accounting for a broader suite of treatments.</p>
<h2>Background</h2>
<p>Since the first Food &amp; Drug Administration (FDA) approval of a CAR-T product in 2017, concerns have persisted over how the Medicare program reimburses for these products, which are currently administered in the inpatient setting and have a significant cost for providers (e.g., $373,000 average sales price for 1 indication). Hospital inpatient reimbursement is calculated on an episodic basis using an MS-DRG base payment rate that is adjusted for factors such as hospital geography, <a href="https://advisory.avalerehealth.com/insights/how-a-new-technology-add-on-payment-works">new technology add-on payment</a> (NTAP), and outlier payments.</p>
<p>In FY 2021, inpatient stays with CAR-T treatment are assigned to MS-DRG 018, which has an average national reimbursement rate of $239,933. Hospitals may receive additional payments for products with NTAP status; however, the NTAP is limited to 65% of the product cost, and no CAR-T products receive NTAP for FY 2021. Outlier payments are available to hospitals to cover extremely costly cases in which the costs of the case exceed the MS-DRG payment, NTAP payment (if applicable), and the fixed loss threshold of $29,064. Even with these adjustments, Medicare reimbursement for CAR-T cases today sometimes fails to cover total hospital costs, with potential negative impacts on provider uptake and patient access.</p>
<h2>Finalized FY 2022 Changes</h2>
<p>For FY 2022, the CMS finalized several policies that impact provider reimbursement for CAR-T:</p>
<ul>
<li><strong>Increase Payment for CAR-T Cases</strong>: Due to an increase to the finalized base operating and capital rates for all IPPS payments as well as an increase in the relative weight for MS-DRG 018, the base payment for CAR-T cases in FY 2022 will increase by 2.9% to $246,958. This is slightly lower than the 3.2% increase in the proposed rule.</li>
<li><strong>Rename and Broaden CAR-T MS-DRG: The </strong>CMS finalized the action to rename MS-DRG 018 to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies” to reflect the addition of new procedure codes for non-CAR T-cell therapies and other immunotherapies that would map to the MS-DRG. Over time, this means more cases will be incorporated when setting reimbursement.</li>
<li><strong>Use 2019 Data to Establish Payment</strong>: The CMS finalized the use of 2019 Medicare Provider Analysis and Review (MedPAR) data to set relative weights for MS-DRGs, going against a standard process that would have incorporated 2020 MedPAR data for FY 2022. This change in method is due to the COVID-19 pandemic’s impact on utilization during 2020. In the case of CAR-T, this means that FY 2022 rates will be largely based on cost data incorporating the 2 on-market products that were available in 2019, despite additional products having been approved or used in clinical trials since.</li>
<li><strong>Apply Adjustment to Clinical Trial Cases</strong>: The CMS finalized a proposal to continue reimbursing for CAR-T clinical trial cases, which do not incur CAR-T drug costs, at a lower rate than non-clinical trial cases. The CMS will continue to utilize 2019 MedPAR data to determine the adjustment factor for FY 2022 clinical trial cases and, therefore, will continue using an adjustment factor of 0.17 for MS-DRG 018 cases. The base rate for clinical trial cases in FY 2022 will be $41,983.</li>
<li><strong>Product NTAP Decisions</strong>: In the proposed rule, the CMS evaluated 4 NTAP applications for CAR-T products. The CMS considered public comments on whether each product meets newness, cost, and clinical improvement criteria required for NTAP status in FY 2022 and made the following decisions:
<ul style="padding-bottom: 0;">
<li>NTAP approved for 2 CAR-T therapies:
<ul style="padding-bottom: 0;">
<li>Tecartus<sup>TM</sup> (brexucabtagene autoleucel) was approved for treatment of relapsed/refractory mantle cell lymphoma. The maximum NTAP payment will be $259,350.</li>
<li>Abecma<sup>®</sup> (idecabtagene vicleucel) was approved for treatment of relapsed/refractory multiple myeloma. The maximum NTAP payment will be $272,675.</li>
</ul>
</li>
<li>NTAP denied for 1 CAR-T therapy:
<ul style="padding-bottom: 0;">
<li>Breyanzi<sup>®</sup> (lisocabtagene maraleucel), for treatment of relapsed/refractory large B-cell lymphoma, was denied NTAP due to failure to meet the newness and substantial clinical improvement criteria.</li>
</ul>
</li>
<li>NTAP application withdrawn for 1 CAR-T therapy:
<ul style="padding-bottom: 0;">
<li>Ciltacabtagene autoleucel, for treatment of multiple myeloma, was withdrawn.</li>
</ul>
</li>
</ul>
</li>
</ul>

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	<div  class="wpb_single_image wpb_content_element vc_align_  vc_custom_1631025182700">
		
		<figure class="wpb_wrapper vc_figure kk">
			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="1304" height="744" src="https://advisory.avalerehealth.com/wp-content/uploads/2021/09/FY22-Final-Rule-e1632337983392.png" class="vc_single_image-img attachment-full" alt="" title="FY22 Final Rule" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2021/09/FY22-Final-Rule-e1632337983392.png 1304w, https://advisory.avalerehealth.com/wp-content/uploads/2021/09/FY22-Final-Rule-e1632337983392-300x171.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2021/09/FY22-Final-Rule-e1632337983392-1024x584.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2021/09/FY22-Final-Rule-e1632337983392-768x438.png 768w" sizes="(max-width: 1304px) 100vw, 1304px" /></div><figcaption class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS, Final FY 2021 vs. Final FY 2022</figcaption>
		<span class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS, Final FY 2021 vs. Final FY 2022</span></figure>
	</div>

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			<p style="font-size: 0.9em; line-height: 1.4em; padding-bottom: 5px;">Figures not to scale​</p>
<p style="font-size: 0.9em; line-height: 1.4em; padding-bottom: 5px;"><strong>Assumptions​</strong></p>
<ul>
<li style="font-size: 0.7em; line-height: 1.4em;">Hospital charges for CAR-T episode are kept constant across all examples, consistent with the geometric mean charges included in the FY22 Final Rule After Outliers Removed/Before Outliers Removed file ($1,408,774).​</li>
<li style="font-size: 0.7em; line-height: 1.4em;">Hospital has an average operating and capital cost-to-charge ratio (CCR) of 0.3​.</li>
<li style="font-size: 0.7em; line-height: 1.4em;">Hospital has an indirect medical education adjustment factor of 0.2 and disproportionate share hospital adjustment of 0.05​.</li>
<li style="font-size: 0.7em; line-height: 1.4em;">Hospital area wage index is 1.0​.</li>
</ul>
<h2>Key Considerations Looking Ahead</h2>
<p>Stakeholders should consider potential implications stemming from the finalized 2022 changes for existing assets and for future cell and gene therapies.</p>
<ul>
<li><strong>Impact of MS-DRG 018 Expansion: </strong>The finalized FY 2022 base rate for MS-DRG 018 is generally in line with FY 2021. Total reimbursement will vary by hospital and case, with adequate reimbursement in some cases but with potential financial risk for hospitals on significantly costly cases. However, the inclusion of additional immunotherapies that could be mapped to MS-DRG 018 may lead to changes in the base rate over time. This could result in uniform reimbursement for cases that differ significantly in resource costs. Notably, the CMS did recognize in the final rule that hospitals could align charges for CAR-T products with CCRs and noted that a new cost center for CAR-T could be considered, which would likely increase payments over time if adopted.</li>
<li><strong>Availability of NTAP for CAR-T: </strong>It is beneficial to manufacturers that the CMS continues to recognize the newness and cost of CAR-T products despite soliciting comment on whether new CAR-Ts assigned to MS-DRG 018 should be ineligible for NTAP. The overall impact of NTAP on reimbursement will depend on how significantly costs of new products deviate from the costs of products currently incorporated into the MS-DRG calculation.</li>
<li><strong>Alternative Payment &amp; Value</strong><strong>-Based Arrangements: </strong>Last year, the CMS finalized the Medicaid Value-Based Purchasing final rule to establish flexibilities to implement value-based arrangements in the commercial and Medicaid markets, which could be attractive financing options for CAR-Ts. In the coming years, the CMS may consider whether innovative approaches should extend to the Medicare fee-for-service or Medicare Advantage space, potentially through a Center for Medicare &amp; Medicaid Innovation demonstration.</li>
<li><strong>Potential for Shifts in Site of Care:</strong> As CAR-T treatment toxicity profiles increasingly make a move to outpatient sites of care more viable, providers may face different financial risk considerations. However, a shift in volume toward the outpatient setting could also result in increased scrutiny on Medicare payment in that setting, potentially resulting in changes to current reimbursement, which is average sale price plus 6 percent for separately payable drugs.</li>
</ul>
<p>To learn more about CAR-T reimbursement, <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>

		</div>
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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/cms-updates-car-t-reimbursement-for-2022-in-ipps-final-rule">CMS Updates CAR-T Reimbursement for 2022 in IPPS Final Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Cell and Gene Therapy in Oncology, Part II</title>
		<link>https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-ii-2</link>
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		<dc:creator><![CDATA[cturner]]></dc:creator>
		<pubDate>Tue, 29 Jun 2021 18:26:57 +0000</pubDate>
				<category><![CDATA[Videos]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=22982</guid>

					<description><![CDATA[<p>To listen to this video as a podcast, please visit our podcast page.</p>
<p>The post <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-ii-2">Cell and Gene Therapy in Oncology, Part II</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p>To listen to this video as a podcast, please visit our <a href="https://advisory.avalerehealth.com/podcasts/cell-and-gene-therapy-in-oncology-part-ii">podcast page</a>.</p>
<p>The post <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-ii-2">Cell and Gene Therapy in Oncology, Part II</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Cell and Gene Therapy in Oncology, Part II</title>
		<link>https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-ii</link>
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		<pubDate>Tue, 29 Jun 2021 18:26:09 +0000</pubDate>
				<category><![CDATA[Interviews]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=22981</guid>

					<description><![CDATA[<p>This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page. If you would like to watch the video version, please visit our video page. Transcription: Michael: Hello and welcome to another episode of&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-ii">Cell and Gene Therapy in Oncology, Part II</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><em>This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our <a href="https://pages.avalere.com/Insight-Settings.html">Insight Subscription</a> page.</em></p>
<p>If you would like to watch the video version, please visit our <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-ii-2">video page</a>.</p>
<h2>Transcription:</h2>
<p><strong>Michael: </strong>Hello and welcome to another episode of the Avalere Health Essential Voice Disease Education series in our second of several cell and gene therapy-focused podcasts. In this series, we will be covering topics on a wide range of therapeutic focus areas.</p>
<p>My name is Michael Kearney, and I&#8217;m a consultant in the Market Access practice here at Avalere Health. I&#8217;m joined by Jay Jackson, a Principal in our Market Access practice, and Megan Olsen, a Principal in our Policy practice.</p>
<p>In our last discussion, we explored challenges associated with cell and gene therapies related to coverage, reimbursement, and patient access. Today, we will explore value-based arrangements (VBAs) and the role that they play in facilitating access to these products.</p>
<p>Paying for value is certainly a theme throughout healthcare, and increasingly so in the context of high-cost drugs. Jay, let&#8217;s start with you. How would you characterize interest in or opportunity for value-based payment arrangements for cell and gene therapies? What&#8217;s driving it?</p>
<p><strong>Jay: </strong>Thanks, Michael. I think it&#8217;s important to remember that while these products are generally targeted at a relatively small patient population for a rare disease, the pipeline for them is quite large, with 800 to 1,000 being studied right now.</p>
<p>Because they&#8217;re typically only administered once, that single administration has a high associated cost that’s not spread out over time. This leads to 2 primary approaches from payers like health plans and employers.</p>
<p>One is that they may seek to spread the financial impact out over time in a manner similar to traditional drugs. The other is that they may only want to pay so long as the product works. So, they want to track outcomes and either stop payments or receive a rebate if a product stops working relative to some baseline, as products come onto the market and generate additional evidence that they may not have had an opportunity to produce within a clinical trial if they came to market quickly and had accelerated approval.</p>
<p><strong>Michael: </strong>Awesome. Thanks, Jay. Megan, I&#8217;d like to go to you now. What are we seeing in the market today in terms of uptake or adoption of these therapies? Where do we see it going in the future?</p>
<p><strong>Megan: </strong>Yeah, good question. I would characterize where we are in the market today looking quite different from where we&#8217;ll be heading in the future. Jay spoke to the large pipeline. Today, there are a limited number of cell and gene therapy products on the market. They treat relatively small patient populations. The overall impact of them in combination is manageable for some payers, but we see that dynamic shifting as more products launch into the market. Some of these might treat larger patient populations and the cumulative impact of these, from a budget perspective, continues to rise.</p>
<p>We&#8217;re seeing this play out in our conversations with payers. As an evidence point to this, based on survey research that Avalere has conducted, we see that about 15% of payers report having innovative contracting arrangements in place for cell and gene therapies today. However, an additional 50% of payers express interest in adopting these types of innovative approaches for paying for cell and gene therapies in the future. So, I think that is an evidence point that speaks to how payers are viewing today differently from the future. There’s a lot to keep in mind here as stakeholders prepare for the future.</p>
<p><strong>Michael: </strong>That&#8217;s great. Thanks, Megan. Switching back to Jay. Megan mentioned that about 15% of payers are utilizing VBAs. How are these currently being constructed? What do they look like? And can you talk about any potential challenges that stakeholders are facing as they&#8217;re thinking about launching these?</p>
<p><strong>Jay: </strong>Yeah, absolutely. Earlier I mentioned paying over time and stop payments or rebates. Most of the contract structures that we&#8217;ve seen out there or that are being talked about include some variation of those components. But as you both noted, despite that high level of interest, there are not a lot of these contracts out in the market right now. There are a couple of reasons for this.</p>
<p>The first is that it&#8217;s hard to track patients as they go from one insurer to another. No one really does this. When a patient has been through several insurers, who gets the rebate? Who decides to stop payment if the outcome isn’t being met?</p>
<p>It can also be hard to track outcomes in some of these conditions that are being treated by gene therapies. Many of these conditions are slowly neurodegenerative, so it can be hard to detect clinical signals. This also involves more testing than a patient might otherwise undergo, especially if this is a disease that was previously an unmet need and there wasn&#8217;t a reason to do this testing.</p>
<p>The good news is that some products have very clear outcomes, things like complete remission of cancer and lack of bleeding events and hemophilia for some of the assets that we see in pipeline. But there&#8217;s definitely a mix there that needs to be addressed on a one-to-one basis for each product. Ultimately, whatever agreement is put in place, it can&#8217;t be overly burdensome on patients and their caregivers simply in the name of generating evidence or paying for performance.</p>
<p><strong>Michael: </strong>Great insight, Jay. Megan, when we&#8217;re thinking about regulatory considerations, what are some of the things that stakeholders are thinking about or should be thinking about as they move into the space?</p>
<p><strong>Megan: </strong>There are several. Jay spoke to the operational challenges that we see playing out, but it&#8217;s important to keep in mind some of the regulatory constraints that we see in the market that can inhibit adoption of these types of arrangements, potentially limit the scale of them in the market, or shape the design of how they&#8217;re playing out and the stakeholders who are involved.</p>
<p>Three primary barriers come to mind. There are several that must be considered as part of entering into any of these arrangements, but the three that I&#8217;ll talk about here are Medicaid best price, the anti-kickback statute, and then average sale price (ASP) and other price reporting metrics.</p>
<p>Best price can present an issue and inhibit providing a rebate or discount that is greater than the existing 23.1% rebate in the Medicaid program. That is because, if a rebate or discount is offered that is greater than that, it can trigger a new best price that has been applicable across all state Medicaid programs. So, there&#8217;s risk in putting more of the drug’s cost under these arrangements.</p>
<p>We have seen some interesting policy initiatives here to provide new optionality to get around or to mitigate the impact of these arrangements on best price. We saw the value-based purchasing rule finalized earlier this year. This rule sets out a new multiple best price option for manufacturers to pursue that allows best prices associated with value-based purchasing arrangements to not impact overall best price in the Medicaid program. The route for that is you establish multiple best prices for value-based purchasing arrangements.</p>
<p>There could be a proposed delay to the implementation of this value-based purchasing rule and associated flexibilities that we are monitoring closely. It’s looking like this will be moved to mid-2022, but it’s certainly an area that, given the importance of best price for innovative contracting arrangements, is one to keep a close eye on and to think through all of the options, whether it&#8217;s multiple best prices, bundled sale, or some of the other options within.</p>
<p>Another barrier that I mentioned is the anti-kickback statute that protects against incentivized utilization or spending in government programs. This is one that needs to be kept in mind across all contracting arrangements, but particularly in the context of innovative and value-based contracting arrangements as well. We have seen less policy activities specific to the anti-kickback statute, but there has been legislation and broader stakeholder conversations about this issue. So, it’s certainly one to watch out for.</p>
<p>Finally, there are a host of price reporting metrics that need to be kept in mind. One that rises to the top as we think about cell and gene therapies that tend to be physician administered is the impact on ASP. This is something that has not been contemplated in any policies that have been advanced to date, but in any innovative or value-based contract where a discount or rebate is being provided, you need to think about how that impacts ASP, and subsequently, how that impacts provider reimbursement downstream.</p>
<p>There is certainly a lot to think about in the context of these innovative arrangements for these high-cost, single administration cell and gene therapies. We need to keep an eye out for additional policy action, whether legislative or regulatory, under the new administration. This is a dynamic space with a lot of things emerging.</p>
<p><strong>Michael: </strong>That&#8217;s great. Thank you, Megan. And thank you, Jay, very much. This is obviously a very interesting and timely discussion here on value-based arrangements. Next time, we&#8217;ll do a deep dive into approaches to patient support services in this space. Thank you all for tuning in to Avalere Health essential voice. Please stay tuned for more episodes in our disease education series. If you would like to learn more, please visit us at <a href="http://Avalere.com/podcasts">Avalere.com/podcasts</a>. Thank you.</p>
<p>The post <a href="https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-ii">Cell and Gene Therapy in Oncology, Part II</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>CMS Introduces Changes to CAR-T Reimbursement in IPPS Proposed Rule</title>
		<link>https://advisory.avalerehealth.com/insights/cms-introduces-changes-to-car-t-reimbursement-in-ipps-proposed-rule</link>
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		<dc:creator><![CDATA[avalere_wp]]></dc:creator>
		<pubDate>Wed, 26 May 2021 13:44:36 +0000</pubDate>
				<category><![CDATA[Insights & Analysis]]></category>
		<category><![CDATA[Archive]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=22775</guid>

					<description><![CDATA[<p>The post <a href="https://advisory.avalerehealth.com/insights/cms-introduces-changes-to-car-t-reimbursement-in-ipps-proposed-rule">CMS Introduces Changes to CAR-T Reimbursement in IPPS Proposed Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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			<p>In the fiscal year (FY) 2022 Inpatient Prospective Payment System (IPPS) proposed rule, the Centers for Medicare &amp; Medicaid Services (CMS) proposed continuing to utilize its newly established Medicare Severity Diagnosis-Related Group (MS-DRG) for Chimeric Antigen Receptor T-cell (CAR-T) treatment stays, with differential reimbursement based on whether the product was provided as part of a clinical trial. However, the CMS proposed using 2019 spending data to establish the relative weight for the MS-DRG rather than using 2020 spending data, due to the impact of the COVID-19 pandemic on inpatient utilization patterns in 2020. Additionally, the CMS proposed adding additional procedure codes affecting pre-MDC MS-DRG 018 and renaming the MS-DRG to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies” to account for these changes. The financial impact of these changes will vary by hospital, and as a result reimbursement may fall short of fully recognizing provider costs of treatment in some cases. This proposed continuation of policy will impact the way future inpatient cell-based immunotherapies are paid by Medicare, accounting for a broader suite of treatments and allowing for continued clinical trial development.</p>
<h2>Background</h2>
<p>Since the first Food &amp; Drug Administration (FDA) approval of a CAR-T product in 2017, concerns have persisted over how the Medicare program would reimburse for these products, which are currently administered in the inpatient setting and have a significant cost for providers (i.e., $373,000 average sales price for 1 indication). Hospital inpatient reimbursement is calculated on an episodic basis using a MS-DRG base payment rate that is adjusted for factors such as hospital geography, <a href="https://advisory.avalerehealth.com/insights/ntap-eligibility-criteria-opportunities-for-inpatient-reimbursement">new technology add-on payment</a> (NTAP), and outlier payments.</p>
<p>In FY 2021, inpatient stays with CAR-T treatment are assigned to DRG 018 (Chimeric Antigen Receptor (CAR) T-cell Immunotherapy), which has an average national reimbursement rate of $239,933. Hospitals may receive additional payments for products with NTAP status; however, the NTAP is limited to 65% of the product cost and no CAR-T products currently have NTAP status (though the CMS is considering establishing NTAP for 4 new CAR-T products in FY 2022). Outlier payments are available to hospitals to cover extremely costly cases in which the costs exceed the MS-DRG payment, NTAP payment (if applicable), and the fixed-loss threshold of $29,064. Even with these adjustments, Medicare reimbursement for CAR-T cases today sometimes fails to cover total hospital costs, with potential negative impacts on provider uptake and patient access.</p>
<h2>Proposed FY 2022 Changes</h2>
<p>For FY 2022, the CMS proposes several policies that would impact provider reimbursement for CAR-T.</p>
<ul>
<li><strong>Payment Increase for CAR-T Cases:</strong> Due to an increase to the proposed base operating and capital rates for all IPPS payments and an increase in the proposed relative weight for MS-DRG 018, the proposed base payment for CAR-T cases in FY 2022 would increase by 3.2% to $247,584.</li>
<li><strong>Rename and Broaden CAR-T MS-DRG: </strong>The CMS proposed renaming MS-DRG 018 to “Chimeric Antigen Receptor (CAR) T-cell and Other Immunotherapies” to reflect the proposed addition of new procedure codes for non-CAR-T-cell therapies and other immunotherapies that would map to the MS-DRG. Over time, this would lead to more cases being considered when setting reimbursement.</li>
<li><strong>Use of 2019 Data to Establish Payment:</strong> The CMS proposed using 2019 Medicare Provider Analysis and Review (MedPAR) data to set relative weights for MS-DRGs, going against a standard process that would have incorporated 2020 MedPAR data for FY 2022. This proposed change in methodology is due to the COVID-19 pandemic’s impact on utilization during 2020, which may distort cost estimates. In the case of CAR-T, this means that FY 2022 rates will be largely based on cost data incorporating the 2 on-market products that were available in 2019 despite additional products having been approved or used in clinical trials since. The CMS is soliciting comments on the decision to use 2019 MedPAR data. If the CMS used the alternative approach incorporating 2020 MedPAR data, the base payment rate would be lower ($230,856) than the proposed rate.</li>
<li><strong>Adjustment for Clinical Trial Cases:</strong> The CMS proposed continuing to reimburse for CAR-T clinical trial cases, which do not incur drug costs, at a lower rate than non-clinical trial cases. The CMS stated in the FY 2021 final rule that clinical trial cases for CAR-T treatment typically cost 17% of non-clinical trial cases and therefore applied an adjustment factor of 0.17 to the relative weight of MS-DRG 018 for these cases. Continuing this policy would result in a base rate for clinical trial cases of $42,089 in FY 2022. However, the CMS noted that if 2020 MedPAR data were incorporated in rate-setting for FY 2022, the clinical trial case adjustment would increase from 17% to 25%, for a higher overall payment amount ($57,714).</li>
<li><strong>Product NTAP Decisions:</strong> There are currently no CAR-T therapies with NTAP status, although 4 applications for NTAP were included in the FY 2022 proposed rule. The CMS will accept public comment on whether the following CAR-T products meet the newness, cost, and clinical improvement criteria required for NTAP status in FY 2022:
<ul style="margin-bottom: 0;">
<li>Tecartus<sup>TM</sup> (brexucabtagene autoleucel), for treatment of relapsed/refractory mantle cell lymphoma</li>
<li>Breyanzi<sup>®</sup> (lisocabtagene maraleucel), for treatment of relapsed/refractory large B-cell lymphoma</li>
<li>Abecma<sup>®</sup> (idecabtagene vicleucel), for treatment of relapsed/refractory multiple myeloma</li>
<li>Ciltacabtagene autoleucel, for treatment of multiple myeloma</li>
</ul>
</li>
</ul>

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			<div class="vc_single_image-wrapper   vc_box_border_grey"><img width="1340" height="777" src="https://advisory.avalerehealth.com/wp-content/uploads/2021/05/IPPS-CAR-T.png" class="vc_single_image-img attachment-full" alt="" title="IPPS CAR-T" srcset="https://advisory.avalerehealth.com/wp-content/uploads/2021/05/IPPS-CAR-T.png 1340w, https://advisory.avalerehealth.com/wp-content/uploads/2021/05/IPPS-CAR-T-300x174.png 300w, https://advisory.avalerehealth.com/wp-content/uploads/2021/05/IPPS-CAR-T-1024x594.png 1024w, https://advisory.avalerehealth.com/wp-content/uploads/2021/05/IPPS-CAR-T-768x445.png 768w" sizes="(max-width: 1340px) 100vw, 1340px" /></div><figcaption class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2021 vs. Proposed FY 2022</figcaption>
		<span class="wpb_single_image_caption">Figure 1. Hospital Reimbursement Example for CAR-T Cases Under IPPS: Final FY 2021 vs. Proposed FY 2022</span></figure>
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			<p style="font-size: 1em; line-height: 1.2em; padding-bottom: 0;">Figures not to scale.</p>
<p style="font-size: 1em; line-height: 1.2em; padding-bottom: 0;">Assumptions:</p>
<ul>
<li style="font-size: 0.72em; line-height: 1.2em; margin-bottom: 0;">Hospital charges for CAR-T episode are kept constant across all examples, consistent with the geometric mean charges included in the FY 2021 Final Rule AOR/BOR file ($1,387,945)</li>
<li style="font-size: 0.72em; line-height: 1.2em; margin-bottom: 0;">Hospital has an average operating and capital cost-to-charge ratio of 0.3​</li>
<li style="font-size: 0.72em; line-height: 1.2em; margin-bottom: 0;">Hospital has an indirect medical education adjustment factor of 0.2 and disproportionate share hospital adjustment of 0.05​</li>
<li style="font-size: 0.72em; line-height: 1.2em; margin-bottom: 0;">Hospital area wage index is 1.0</li>
</ul>
<h2>Key Considerations Looking Ahead</h2>
<p>Stakeholders should consider several outstanding questions and potential implications stemming from the proposed 2022 changes for existing assets and for future cell and gene therapies.</p>
<ul>
<li><strong>Impact of DRG 018 Expansion:</strong> The proposed FY 2022 base rate for MS-DRG 018 is generally in line with FY 2021. Total reimbursement will vary by hospital and case, with adequate reimbursement in some cases but with potential financial risk for hospitals on significantly costly cases. However, the inclusion of additional immunotherapies that could be mapped to MS-DRG 018 may lead to reductions in the base rate over time. This could result in uniform reimbursement for cases that differ significantly in resource costs.</li>
<li><strong>Combined NTAP Consideration:</strong> In cases where 2 products under consideration for NTAP are viewed as substantially similar (i.e., have the same targeted therapeutic outcome, same or similar mechanism of action, and map to the same MS-DRG), the CMS may consider those products as a single application for the purposes of NTAP. This means that the CMS will blend cost data for both products to arrive at a maximum NTAP add-on payment. Manufacturers should consider how blended NTAPs could impact them in the rapidly developing CAR-T space. In this proposed rule, the CMS has indicated it is seeking additional information on whether to consider ciltacabtagene autoleucel and ABECMA® (idecabtagene vicleucel) as a single NTAP application given perceived substantial similarity.</li>
<li><strong>Alternative Payment and Value</strong><strong>-Based Arrangements: </strong>Between the 2021 IPPS final rule and the 2022 proposed rule, the CMS finalized the Medicaid Value-Based Purchasing final rule to establish flexibilities to implement value-based arrangements in the commercial and Medicaid markets, which could be attractive financing options for CAR-Ts. In the coming years, the CMS may consider whether innovative approaches should extend to the Medicare Fee-for-Service or Medicare Advantage space, potentially through a Center for Medicare &amp; Medicaid Innovation demonstration.</li>
<li><strong>Potential for Shifts in Site of Care</strong>: As CAR-T treatment toxicity profiles increasingly make a move to outpatient sites of care more viable, providers may face different financial risk considerations. However, a shift in volume toward the outpatient setting may also result in increased scrutiny on Medicare payment in that setting, potentially resulting in changes to current reimbursement, which is ASP plus 6 percent for separately payable drugs.</li>
</ul>
<p>To receive Avalere updates , <a href="https://info.avalere.com/LP=46">connect with us</a>.</p>

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</div><p>The post <a href="https://advisory.avalerehealth.com/insights/cms-introduces-changes-to-car-t-reimbursement-in-ipps-proposed-rule">CMS Introduces Changes to CAR-T Reimbursement in IPPS Proposed Rule</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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		<title>Cell and Gene Therapy in Oncology, Part I</title>
		<link>https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-i-2</link>
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		<pubDate>Wed, 05 May 2021 21:38:03 +0000</pubDate>
				<category><![CDATA[Interviews]]></category>
		<guid isPermaLink="false">https://avalere.com/?p=22629</guid>

					<description><![CDATA[<p>This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page. If you would like to watch the video version, please visit our video page. Transcription: Kolton: Hello, and welcome to another episode of&#8230;</p>
<p>The post <a href="https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-i-2">Cell and Gene Therapy in Oncology, Part I</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
]]></description>
										<content:encoded><![CDATA[<p><em>This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our <a href="https://pages.avalere.com/Insight-Settings.html">Insight Subscription</a> page.</em></p>
<p>If you would like to watch the video version, please visit our <a href="https://advisory.avalerehealth.com/videos/cell-and-gene-therapy-in-oncology-part-i">video page</a>.</p>
<h2>Transcription:</h2>
<p><strong>Kolton: </strong>Hello, and welcome to another episode of the Avalere Health Essential Voice Disease Education series, and our first of several cell and gene therapy-focused podcasts. In this series, we&#8217;ll be covering several topics on a wide range of therapeutic focus areas.</p>
<p>My name is Kolton Gustafson, and I&#8217;m a Consultant in our Policy practice at Avalere Health. I&#8217;m joined today by Megan Olsen, a Principal in our Policy practice, and Jay Jackson, a Principal in our Market Access practice. Jay and Megan also co-lead Avalere’s work on cell and gene therapies, which is our topic of discussion today. We&#8217;ll explore the challenges associated with these products in the period leading up to and following launch. Let&#8217;s go ahead and jump in.</p>
<p>Jay, can you tell us what the market looks like right now, including the pipeline?</p>
<p><strong>Jay: </strong>Sure, Kolton. There are only about 7 cell and gene therapies on the market right now. Five of those are cell therapies (CAR Ts), and 2 are gene therapies, but there are many more to come.</p>
<p>There are about 50 cell and gene therapies in the late stages of clinical development right now. Approximately a quarter of those are in the oncology space being led by those CAR Ts. Other significant therapeutic areas include hematology, metabolic disorders, and neurology. The therapies are unique in that many of them only require a single administration or very few administrations.</p>
<p>The sites of care will really be variable by product, medication, safety profile, and things of that nature. Nearly all of them will be physician administered, and whether that takes place in the hospital inpatient, hospital outpatient, or another setting will really be a function of individual product safety. Cell therapies such as CAR Ts are largely administered in the inpatient setting, though we do anticipate a future move toward the outpatient setting, especially for gene therapies and allogenic therapies that are currently in the pipeline.</p>
<p><strong>Kolton: </strong>It&#8217;s a very dynamic space. Let&#8217;s jump into some of the challenges that are unique to cell and gene therapies that need to be considered before launch. One that I think is a hot topic and I&#8217;d like to explore is patient access. Megan, what are some key considerations to ensure that patients can receive cell or gene therapy treatments?</p>
<p><strong>Megan: </strong>That&#8217;s a great question, Kolton. There are a lot of interesting patient access considerations that are unique to the cell and gene therapy space that must be thought through ahead of launch.</p>
<p>First, these therapies are typically treating a rare disease. It&#8217;s going to be a small patient population and will likely be administered in a narrow subset of treatment centers. There are also various out-of-pocket cost considerations from a patient perspective that differ relative to other current therapies.</p>
<p>Authorized treatment centers are a really important area to think about. Often, cell and gene therapies are only administered at a subset of specialized, trained, and certified treatment centers, like those that can adhere to risk-evaluation and mitigation strategy (REMS) regimens, for instance. That has considerations when thinking about how patients are going to access those treatment centers, as they may need to travel across states or regions. How much is it going to cost for the patient to travel across the country with a caregiver? Lodging and meals are also associated with that travel. Then, is that treatment center within the patient&#8217;s insurance network?</p>
<p>There are a lot of pieces of the patient journey that need to be considered that are different from the treatment journey for the standard of care today. We&#8217;ve seen some movement within the industry to address the logistical, travel, and out-of-pocket burdens associated with those treatment centers. For instance, the Office of Inspector General (OIG) has permitted manufacturer support associated with travel and lodging, so we&#8217;re likely to see more adjustments in the space as more treatments are launched that require patient travel.</p>
<p>Another important area is out-of-pocket costs for patients. We haven&#8217;t mentioned this yet, but typically, these therapies are very expensive. They cost $1 million or more in some instances, and as a result, patients could be exposed to different ranges of out-of-pocket costs. It&#8217;s a one-time cost given these are typically single-administration treatments.</p>
<p>It’s important to look at cost through the insurance market-specific lens. It will be different if you&#8217;re looking at a Medicaid patient population versus a Medicare population versus a commercial patient population with varying levels of out-of-pocket cost exposure, whether we&#8217;re talking about copayments or coinsurance. Importantly, the out-of-pocket max plays a big role here. For example, in the Medicaid market, patients are typically exposed to nominal out-of-pocket costs with a low cap on annual out-of-pocket spending. So, you’re less likely to have a patient affordability challenge in that market relative to the commercial market where you could see an out-of-pocket max upwards of $8,000.</p>
<p>Similar to what I mentioned about how the industry is addressing costs associated with travel to treatment centers, we&#8217;ve also seen some movement in manufacturers supporting patients in out-of-pocket costs. Certainly, there are constraints per market that need to be considered there as well, but it’s definitely an area of focus.</p>
<p><strong>Jay: </strong>That’s a great point, Megan. Within that, also ensuring that the patient journey is understood by the product sponsors as well as providers. Understanding where patients get their care, what the potential network of centers of excellence or their equivalent might be for these cell or gene therapies. Understanding what the referral and diagnostic pathway looks like to get access to these therapies, noting that it&#8217;s going to be different from a more traditional type of pharmaceutical product. Making sure the providers know that this is an option and that they&#8217;re educated in these therapeutic areas that these cell and gene therapy products are going to be entering.</p>
<p>These considerations are not necessarily unique to cell and gene therapies, and I think that&#8217;s true for a lot of these aspects. There’s an outsize challenge and issues are exacerbated in this space. I think one example of that is the single administration profile that we see for a lot of these products with that durability of effect. Physicians or other stakeholders are going to need to find ways to track patients and their outcomes over time without the benefit of those touchpoints of repeat administration. So, that’s an example of another type of issue as well.</p>
<p><strong>Kolton: </strong>Thanks, Jay and Megan. It’s helpful to think about the impact on patients, one of the key stakeholders here. But let&#8217;s turn to another one of our stakeholders: payers. Can you tell us about some of the challenges that payers are facing with cell and gene therapies?</p>
<p><strong>Jay: </strong>Absolutely. I think this is an interesting area. One thing we have to consider is that a lot of these products are filling an unmet need, so they&#8217;re getting fast-tracked through the FDA. Often the patient population is small, so they&#8217;re getting through the regulatory agency with trial sizes in the dozens as opposed to the hundreds.</p>
<p>One challenge is that payers may be hesitant to cover these products based on that relatively limited evidence. If they do cover, they may cover it in a more restricted way than the label may cover its clinical trial data, which may be, again, rather small or limited. These dynamics are also going to vary payer by payer. We’ll see Medicare potentially cover more products and commercial payers may cover fewer. Medicaid payers may have budget issues that may lead them to cover fewer products or be more restricted, things of that nature.</p>
<p>On the payment side of things, we should note that reimbursement methodologies vary by site of care. Inpatient versus outpatient versus physician office are all paid differently by payer. This is coming into play with the CAR T products that are reimbursed on a bundled basis using Medicare Severity Diagnosis-Related Groups (MS-DRGs), where we might not see that in the outpatient setting. We tend to see more sufficient reimbursement with commercial payers than we do see in Medicaid and Medicare. However, that&#8217;s not always true and varies by setting.</p>
<p><strong>Megan: </strong>And because of some of these challenges that Jay flagged, we&#8217;re seeing aligned interest in new ways to pay for and finance these types of therapies. Jay mentioned having more limited data available upon launch. We know these products seek to promise a durable benefit over a number of years. We&#8217;re seeing interest among payers and manufacturers in setting up payment arrangements that can ensure that patients are getting the value from these therapies that they&#8217;re intended to deliver.</p>
<p>Outcomes-based arrangements come to mind, where a rebate can be provided if the patient doesn&#8217;t meet certain clinical outcomes over time. There is also interest in various “pay over time” or milestone-based payment arrangements where instead of financing a $1 million therapy upfront in year one, it can be financed over a 5-year period, paying 20% each year, potentially also tied to those patient outcomes.</p>
<p>So, I would say the market uptake of these arrangements is limited today, and that&#8217;s a function of several things. Most notably, there are only a few products on the market today, and they&#8217;re treating relatively small patient populations. In addition, the regulatory constraints, including Medicaid best price and the anti-kickback statute, can create some barriers to uptake or limit the scale of those arrangements. As the pipeline moves further into market and more products are launched, as the cumulative patient population and budget impact is felt by payers to a greater extent, and likely in combination with some new regulatory flexibilities around best price, I think we could see potentially broader and wider adoption of these arrangements. So, it’s definitely an exciting area to focus on in the near term.</p>
<p><strong>Kolton: </strong>Yes, lots to look out for there. Thank you, Megan and Jay, for sharing your insights. We discussed a lot of challenges in this space today. In our next installment, we will dive into some of the solutions as well. I want to thank you all for tuning in to Avalere Health Essential Voice. Please stay tuned for more episodes in our Disease Education series. If you&#8217;d like to learn more, please visit us at <a href="http://Avalere.com/podcast">Avalere.com/podcast</a>s. Thank you.</p>
<p>The post <a href="https://advisory.avalerehealth.com/interviews/cell-and-gene-therapy-in-oncology-part-i-2">Cell and Gene Therapy in Oncology, Part I</a> appeared first on <a href="https://advisory.avalerehealth.com">Avalere Health Advisory</a>.</p>
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