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Looking Ahead: Commercialization strategies for gene and cell therapy companies

The high cost of gene and cell therapies will make it critical for companies to provide higher levels of support for healthcare providers and especially for patients through access, reimbursement, and financing.

The new generation of rapidly emerging gene and cell therapy companies are advancing many promising and potentially curative treatments for major areas of unmet need in healthcare. They are poised to transform the biopharmaceutical industry in the years ahead. A recent report from the Pharmaceutical Research and Manufacturers of America (PhRMA) shows there are nearly 300 novel gene and cell therapies currently in clinical stage development around the world for treatment of a wide range of diseases and conditions, with the majority in oncology.

Some of the most advanced products are being developed by a small number of larger pharmaceutical companies and by innovative small biotechs. In many cases, companies either have, or are building, the range of expertise and resources necessary to advance their products to commercialization. For others, it is essential to consider the full range of options to bring their products to patients and choose the path that will maximize both commercial interests and patient access.

In light of the many risks inherent in “going it alone,” many industry insiders expect to see more M&A deals between small gene and cell therapy companies with late-stage assets and larger entities positioned to handle global commercialization. When assessing their options, there are several factors smaller life sciences companies should consider, including the level of financing required and access to capital to support a commercialization strategy, availability of skilled workers to handle complex manufacturing and distribution processes, the potential need for new levels of innovation and flexibility in pricing models and access strategies, and the need for significant investment in patient and clinician education, monitoring, and support.

Manufacturing and supply chain complexity
Among the challenges in development of gene and cell therapies, access to technology is a primary consideration. Alignment with larger companies can provide smaller biotechs access to manufacturing and distribution capabilities that may be out of reach. Conversely, larger companies often seek to acquire innovative development programs to build their pipelines but also expand their R&D capabilities through the acquisition of relevant new platform technologies in the field.

Gene and cell therapy companies are distinct from more traditional drug development programs including small molecules and monoclonal antibodies in that some risks are more significant at later stages of development. In many cases, the final mode of drug delivery for a gene therapy cannot be determined until late in the development program. At the commercial stage, efforts to scale up production to meet demand can also put stress on both manufacturing and distribution protocols.

Efforts to confirm an optimal drug delivery platform and execute production at a large scale require very specialized expertise and advanced manufacturing and supply chain management capabilities that are not readily available to smaller companies. Success will depend on access and optimal use of innovative technologies including advanced cryopreservation tools.

Companies must continually assess their ability to invest in the right technology at the best time – too early and it can squeeze resources needed for other projects, too late and it can affect scale-up when needed. The distribution chain for gene and cell therapies must also reflect the fact that most products have a very short half-life (often days) and require carefully controlled transport conditions.

Sales and marketing
Gene and cell therapies will also require new strategies in sales and marketing to support commercialization. While some shifts are beginning to occur, today’s go-to-market models are still mainly relying on an extensive sales force and large marketing and advertising budgets.

But this approach is not suited to gene and cell therapies, especially potentially curative therapies administered in a single dose and targeting very small patient populations in rare diseases. New approaches will require more targeted medical and scientific communications with clinicians but also patients, and other stakeholders, and more precise targeting of patients and healthcare providers.

It will be essential for companies to use predictive analytics to define appropriate patient cohorts and data analyses of diagnoses and procedures to map the patient journey and identify an effective marketing strategy. Companies should be prepared to support sales with a few experts including medical science liaisons rather than a large sales force. These experts will play a vital role in clinician and patient education. In fact, many industry insiders anticipate that a traditional sales force could become obsolete in marketing for gene and cell therapies.

New pricing models
Gene and cell therapies are often priced high due to factors including complex production processes, potentially curative efficacy, and the fact that they are designed to treat rare diseases with small patient populations for which there are few, if any, options.

The first approved gene therapy, Glybera, a treatment for patients with the rare lipoprotein lipase deficiency, was priced at $1 million after it was approved. While costs may reflect the benefits that these therapies bring to patients and health systems over time, significant different models may be needed to support payment for the one-time application of a curative therapy. These innovative models include value-based pricing, annuity payments, and expanded risk pools. Many gene and cell therapies also will require payers and clinicians to make decisions related to access and treatment without the levels of long-term efficacy and safety data typically available to support new drugs.

With respect to payment options, value-based agreements require that products meet specific and timed clinical targets to be eligible for reimbursement from payers. This can reduce the risk of coverage for unsuccessful treatments and help address the issue of limited evidence of efficacy and safety at launch. All relevant stakeholders, however, will need to align on what constitutes a successful treatment outcome within a pre-defined time period.

The annuity payment model is another option to pay for the significant long-term benefits of gene and cell therapies. With this approach, payers would agree to coverage based on a series of payments over a set timeline for each patient treated with a curative therapy. This could reduce the near-term budget impact for payers while accounting for longer-term value. As with value-based agreements, annuity payment models would require stakeholders to agree on what constitutes a successful outcome and centralize outcomes data management and reporting, which in itself is a considerable challenge.

Alternatively, to expand risk pools, commercial payers could join with other stakeholders, potentially including government and nonprofits, to help keep premiums and cost sharing at manageable levels. But many payers anticipate that expanded risk-sharing models will face challenges in achieving the necessary levels of broad alignment to be viable.

The high cost of gene and cell therapies will make it critical for companies to provide higher levels of support for healthcare providers and especially for patients through access, reimbursement, and financing. Providing a dedicated access and finance manager who is empowered to support patients will be essential. Some of this type of support is offered today for high priced oncology drugs, and helps patients understand their insurance coverage and additional financial support options, such as foundation support.

While the gene and cell therapy sector is trending toward more M&As, many emerging companies might choose to commercialize gene and cell therapies themselves. Success will be based on their ability to refine their go-to-market models, geographic strategies, and maximize efficiency.

Optimal strategies will include acquiring high-value manufacturing processes and technologies at the right time, building a team of specialized experts – which may involve collaboration with and support from key stakeholders – and adopting flexible and innovative pricing models to support treatment. Drug developers will also need to adjust their sales strategies to target a small, specialized audience. While the road to commercialization will include many bumps, efforts to understand and address the unique issues presented by gene and cell therapies can help many companies to find a path forward.

Photo: Getty Images

Pascale Diesel is Vice President in CRA’s Life Sciences Practice. Dr. Diesel has 18 years of pharmaceutical and biotech experience in global development, marketing, planning, and business development and more than 10 years of strategic consulting experience focusing on portfolio optimization and valuation. Prior to joining CRA, she was Principal, Strategy and Portfolio Analysis, EMEA at QuintilesIMS (now IQVIA), concentrating on commercial due diligence (sell- and buy-side), sustainable growth and geographic expansion. The views expressed herein are the author’s and not those of Charles River Associates (CRA) or any of the organizations with which the author is affiliated.

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