Episode 16 – Gene Therapy

Mike Stull (0:09)

Hi everyone, this is Mike Stull and welcome to this month’s episode of the Employers Health HR Benecast, your source for expert commentary and insights on current health benefits related news and strategies. I hope the new year is off to a good start. I know we certainly have hit the ground running here at Employers Health.

We’ve already had a number of PBM Sightlines events throughout the country with two more scheduled for February in Texas and even more in March and April. I invite you to join us at a location near you for these relaxed discussions where benefits professionals and consultants like you will learn PBM contracting tips and tricks, benchmarking data, and strategies employers are using to better manage specialty spend.

Additionally, we hope to see you at our third annual PBM conference on March 18th in Columbus, Ohio, where we bring together the best and brightest professionals in pharmacy benefit management to cover value-based strategies that help employers develop, design, and deliver comprehensive yet affordable pharmacy benefits.

We’ve got a great lineup of speakers, and the event is currently pending approval of five continuing education credit hours from the Ohio Department of Insurance, the Society for Human Resource Management, and HRCI. You can learn more about all of our events and register for those that I mentioned at employershealthco.com/events.

We had a number of entries into our listener drawing from our last episode and I’m happy to say that Sheba Marshall from Kent State University was our winner.

Sheba submitted the correct word, engagement, and will receive a $50 visa gift card. Be sure to listen for the keyword in this episode and enter for your chance to win. I’ll share the keyword later in the show or even during the interview, so be sure to listen closely.

On today’s episode, I’m talking with Kelsey Dieters, clinical advisor here at Employers Health. As a clinical advisor, Kelsey makes plan design recommendations for employers and provides them information on new drugs and overall pharmacy trends. Additionally, if you utilize Employers Health’s flu shot immunization program, you may have come across Kelsey.

She’s one of our three pharmacists making rounds to help protect your workforce from the flu. Specialty drug spend continues to challenge benefits budgets and one new form of treatment has gotten a lot of attention, gene therapy. Kelsey is here today to help us understand what these drugs are, how they can help patients, and what employers can do to mitigate some of the risk associated with the often-exorbitant price tags.

So, Kelsey, welcome.

Kelsey Dieters (3:04)

Thank you, Mike.

Mike Stull (3:06)

And maybe as a starter, just give the audience a quick background or quick introduction of you.

Kelsey Dieters (3:14)

Sure. So, I’m really happy to be here today. As you have mentioned, I’m a pharmacist here at Employers Health and part of the clinical team.

I recently joined here in 2019. I am originally from Shelby Township, Michigan, and I went to school at Ohio State where I earned my Bachelor of Science in Pharmaceutical Sciences degree. And then I went on to earn my doctorate of pharmacy from the University of Kentucky.

So, I’m really happy to join the Employers Health coalition and be part of the clinical team here.

Mike Stull (3:50)

Awesome. Well, thank you for that.

So, as it relates to gene therapies, the topic that we’re here to talk a little bit about today and certainly as I’ve been out on the road at these sightlines events, gene therapies have come up quite a bit. Can you help us understand to start off what exactly these drugs are?

Kelsey Dieters (4:12)

Yes. So, gene therapy is really a hot topic right now.

So, it’s exciting that we’re discussing this today. To dive into what gene therapies are and what these drugs actually do, I’m going to take a step back and take us back to maybe something we learned back in our high school science days. So, genes are segments of DNA which provide the codes or the instructions to make the proteins necessary for our cells to function properly.

So, when a gene mutation occurs, it could result in an abnormal protein or no protein at all, which could then lead to a genetic disorder. The goal of gene therapy is to use normal gene copies as drugs to compensate for the malfunctioning or missing protein. This can be performed in two different approaches, either in vivo or ex vivo.

So, those are some pretty complicated terms, but to simplify that, what that means is in vivo gene therapy involves transferring correctly functioning genes directly into a specific cell inside the body through delivery vehicles called vectors. On the other hand, ex vivo gene therapy is when a patient’s cells are sent to a manufacturer, and they are modified for administration back into the patient with the goal of curing the disease.

Mike Stull (5:34)

Great.

And so, are the gene therapies that are out on the market today, are they in vivo or ex vivo?

Kelsey Dieters (5:44)

So, we have a variety on the market today. There are currently four gene therapies on the market in the United States, and some of those are in vivo while others are ex vivo. So, those drugs that are currently available are Zolgensma, Luxterna, Kymriah, and Yescarta.

Zolgensma is a one-time IV infusion used to treat spinal muscular atrophy or SMA type 1. SMA is an inherited neuromuscular disorder, and what that means is that it affects a child’s ability to move muscles. Zolgensma is specifically indicated for SMA type 1, which is when your symptoms are present at birth or by the age of six months. These babies can have symptoms ranging from muscle weakness to a weak cry, breathing distress, difficulty swallowing, and unable to sit up on their own.

This disease inevitably leads to death because it severely weakens all muscles, including those used to breathe. So, Zolgensma decreases those symptoms and extends the life expectancy of affected babies.

The second gene therapy, Luxterna, is an example of in vivo gene therapy. So, this drug is used to treat RPE65 mutation-associated retinal dystrophy, which, in other words, is a rare inherited disease usually seen in childhood that affects vision, and it can also occur into adulthood. This disease results in progressive blindness throughout life and may progress to complete blindness eventually. So, Luxterna is a one-time surgical injection beneath the retina of each eye.

One eye is treated at a time, so after the first eye is treated, the second eye will then be treated six days later. This drug restores the visual cycle and helps maintain vision in patients who have enough remaining cells in the retina.

Lastly, Kymriah and Yescarta are also available, but it is important to note that treatment uses one of these therapies.

It either uses one or the other. So, these are examples of ex vivo therapy, and they are used to treat types of cancers that affect the cells of the blood and lymph nodes. Kymriah is specifically indicated to treat large B-cell lymphoma or acute lymphoblastic leukemia, or ALL, and it was the first FDA-approved CAR T-cell therapy.

Yescarta is used to treat non-Hodgkin’s lymphoma. Both of these gene therapies are one-time infusions, but they should be used after other conventional therapies have failed. They are specifically intended for patients with refractory or recurring cancer.

I would also like to point out, regarding these two drugs, that treatment complications are expected with both Kymriah and Yescarta. Both of these can create a supercharged immune system following administration. The symptoms could include a high fever, flu-like symptoms, or B-cell aplasia.

The flu-like symptoms could require ICU admission or administration of specialty medications, but that indicates that there is a positive response to the gene therapy. B-cell aplasia is when a patient has low or absent B-cell levels in their blood, which are needed to protect against infections. This is the costliest expected side effect and occurs because the gene therapy wipes out both cancerous and normal cells.

Patients will remain hospitalized for at least one week after administration of Kymriah or Yescarta to monitor for these toxicities and safety concerns.

Mike Stull (9:50)

Great. It sounds like a lot of these drugs then will occur on the medical benefit versus the pharmacy benefit.

Is that correct?

Kelsey Dieters (10:03)

That is correct. Employers should ensure that these drugs are administered under the medical benefit and block processing under the pharmacy benefit. This is one of the first current vendor strategies that we have started to see.

Once a new gene therapy is approved, I wanted to point out that some self-insured employers with carved out pharmacy benefits may see communications from their PBM to block these drugs from processing under the pharmacy benefit in order to ensure medical benefit administration.

Mike Stull (10:37)

Great. From a cost perspective, what do the costs look like for these medications?

Kelsey Dieters (10:43)

These gene therapies are very expensive.

Zolgensma is the most expensive one that we’re seeing. That costs around $2 million. Luxturna is around $850,000.

Kymriah is around $475,000. And Yescarta is around $373,000. There is more pricing pressure on Yescarta because more patients are eligible for that gene therapy compared to the others.

We see approximately 7,500 patients are eligible for Yescarta compared to approximately 300 patients for Zolgensma and Kymriah, and fewer than 30 patients are eligible for Luxturna. That may help to explain why there is a difference in cost right now. But either way, they are all very expensive.

Mike Stull (11:41)

How are employers, we mentioned the rare incidents of these conditions and the need for some of these drugs, how are employers managing the risk from both a clinical and financial perspective?

Kelsey Dieters (11:56)

Employers should start having discussions with their medical carriers to ensure cost-effective usage. An example of this can be seen with ex vivo therapies. These therapies take weeks to develop for a specific patient, and they can encompass different procedures at multiple locations.

Employers should ensure that billing and procedural codes represent the full cost of care. From a clinical perspective, usage for unapproved diagnoses should not be billed back to the payer. It is important for our employers to know how their medical vendor protects the plan during this situation.

For example, prior authorization should be in place to ensure that the drug is being prescribed by a specialist and that the patient has the indicated disease state and genotype. We have also seen employers reviewing their stop-loss policy to determine if gene therapy coverage has limitations or if it’s excluded. Lately, we’ve been seeing various payment models, which have been announced by multiple PBMs.

Some of these include outcomes-based contracting, which may also be known by some as pay-for-performance or value-based contracting. This can be viewed as a warranty between the manufacturer and the payer. A refund, usually typically rebates, are paid by the drug maker for additional rounds of treatment if initial gene therapy fails.

However, there are some challenges implementing this model due to extensive operational requirements and the desire to contract for chronic medication. Payment installments have also been proposed, and that spreads out the cost of gene therapies in the form of annuities, either by months or years. This may be best for budgeting purposes and easier to implement than outcomes-based contracting.

Ideally, the outcomes-based contracting and payment installment strategies could be combined together.

Mike Stull (13:56)

Yeah, I know that Cigna, for example, launched a new program called Embark, which allows its clients to pay a monthly PMPM for coverage for these medications. So, it’s basically a carved-out reinsurance program.

I know CVS is going to launch something here soon as well, and I would expect that Anthem’s working on something, and UnitedHealthcare and OptumRx are working on something as well. There’s obviously four, you mentioned the four that are on the marketplace today, and just based on the patient populations that you threw out, it’s a small chance that a one given employer would have one of these patients on their plan, but there’s more in the pipeline, right? And how many are in the pipeline, and when should we expect to see more hit the marketplace?

Kelsey Dieters (15:04)

That’s right. So, there are several gene therapies currently in the pipeline for both rarer and common conditions.

One specifically is hemophilia. Hemophilia is a bleeding disorder, and there are currently two drugs in the pipeline for hemophilia A and three drugs for hemophilia B. One that we’re expecting to see pretty soon is Velrox, which is indicated for hemophilia A, and we’re expecting to see that to launch fourth quarter of 2020. We’re also expecting to see gene therapies for beta thalassemia, which is an inherited blood disorder, to possibly launch in 2020 as well.

In 2022, we anticipate a gene therapy for sickle cell anemia, which would have a high market impact. We are also seeing a handful of gene therapies in phase three development indicated for conditions such as osteoarthritis, heart failure, ischemic heart disease, melanoma, bladder cancer, and mesothelioma. It’s an exciting time as these new gene therapies launch and provide treatment options for a variety of conditions, but they do pose challenges, like you mentioned, since they are extremely expensive.

Mike Stull (16:21)

Yeah, I think that’s the common theme in our discussions at the site lines events is, from a clinical perspective, these are really exciting treatments, but from a financial perspective and a risk mitigation perspective, they can be extremely scary. I think takeaways, it’s certainly important to have conversations with your medical providers, your healthcare plans, about how these gene therapies, if one were to hit your population or your plan, how these are going to be managed and then how they’re going to be financed. It may also include a conversation with a stop-loss carrier or even evaluation of these new programs that are coming out around spreading the risk for payment for these medications.

Thanks, Kelsey. Before we move on, would you like to tell our listeners today’s keyword?

Kelsey Dieters (17:27)

I’d be happy to. Today’s keyword is transparency.

Mike Stull (17:33)

Thank you. If you’d like to be considered for the $50 Visa gift card, please submit the code word transparency along with your name and email address using the link on the landing page.

Again, I encourage you to visit employershealthco.com/events to view the full schedule of EH events and be sure to save the date for the Innovations and Benefits Conference in Canton, Ohio on May 13th, where you’ll hear from national benefits experts on the latest trends and employee benefits, pharmacy benefit management, and more.

And at that meeting, we’ll announce the 2020 Excellence in Benefits Award winner. Nominations are open through February 18th. Only benefits professionals from Employers Health member organizations are eligible to win, but nominations can be submitted by anyone.

Visit benefitsaward.com to learn more and submit your nomination today to recognize the good work of one of your colleagues.

Also, don’t forget to submit your questions regarding HR benefits and the value of membership in an employer-led coalition. You can do so by completing the field on the landing page or clicking the link titled submit your questions here.

And then be sure to tune in to our next episode to hear the answers to your questions. There’s always something new going on at Employers Health. I mentioned in the beginning that we’re off and running here in 2020, so you can stay tuned to everything that’s going on by following us on our social media accounts including LinkedIn and Twitter.

So that’ll conclude this month’s show. Thank you again to Kelsey for joining us today and thank you to those who took the time to listen. But more importantly for Employers Health members, we thank you for your continued participation in Employers Health.

Again, don’t forget to submit your questions so that we can answer them in upcoming editions of the podcast.

Be well and we’ll see you soon.