Financing High-Cost Therapies through Reinsurance

Could reinsurance allay health insurers' fear about high cell and gene therapy costs?

With the prospect of many cell and gene therapies coming to market in the medium term, often with record breaking list prices and with the potential to be one time cures, there is a vigorous debate about the best way to pay for these advanced medicines. Health insurance companies are in fear of the financial impact that unplanned catastrophic costs associated with cell and gene therapy products could have. For some, reinsurance offers, at least part, a solution. But is the reinsurance industry geared up for this unique challenge? Who pays the premium? Is reinsurance a sustainable model suitable for all health payers? What can pharma companies do to help and ensure optimum market access for their cell and gene therapy portfolios?

Reinsurance is just part of the debate on a solution for the sustainable funding of high-cost cell and gene therapies that is neither clear nor straightforward. That is why in, Financing High-Cost Therapies through Reinsurance we interviewed financing and market access experts to help you understand the challenges and benefits of reinsurance and the positive steps industry can take now to influence the cell and gene therapy funding agenda.

Experts explore key reinsurance questions

Are predictions of US approval of between 10 and 20 cell and gene therapies every year from 2025 realistic and will future cell and gene therapies have record-breaking price tags?
How concerned are payers about the future budget impact of high-cost cell and gene therapies and how can the actuarial risk of high-cost cell and gene therapies be managed in the future?
How can the tension between cost-effectiveness and affordability of high-cost cell and gene therapies be managed?
Is it likely that all high-cost cell and gene therapies be reimbursed by all insurers and what might this mean for pharma?
Could reinsurance work as a way to pay for high-cost cell and gene therapies for different types of healthcare system/payers in the future and if not, why not?
Should pharma be considering reinsurance as a way for payers to pay for high-cost cell and gene therapies?

What our experts say…

"Innovators do have a fear that payers will exclude high-cost cell and gene therapy from coverage. I haven't seen an indication, at least in the therapies that have been approved so far, that that's going to be the case. In part, it's because, no payer wants to be on the front page of the paper for being the one not to cover."
Jane F Barlow

"Reinsurance is not a single solution, but it will help some smaller payers and self-insured employers absorb a lightning strike, one-off or limited use of high cost therapies in their covered population in the future."
VP, Biotech Company

"Payers need to get a good actuary, but more than that, they need to have robust model assumptions. Companies and others need to really work closely with the payer and understand their needs."
Steve Bradshaw

"One of the potential future benefits of reinsurance is that it could spur innovation. Pharmaceutical manufacturers are paid in full, and right away. That would create a more attractive market place for other manufacturers to dive in. They would see that there is an early opportunity, early returns. Whereas if you have the annuity model or an outcomes mode, then your reimbursement isn't as concrete. You might be getting paid the same amount for a patient, but it takes longer, or you might not get paid at all if the drug fails. Reinsurance offers benefit, especially to industry, and you'd probably see more investment and a bigger push."
Jeremy Schafer

What to expect

A detailed report examining the issues, benefits and practical obstacles for health insurers considering reinsurance as a strategy to protect themselves from high cell and gene therapy costs and the contribution pharma can make to the debate
An examination of 17 key issues which pharma needs to understand and respond to
14 targeted questions put to market access experts
Their perceptive responses that provided 32 insights supported by 67 directly quoted comments

About the Experts contributors

All experts were screened for participation on the basis that they had the following:

Expertise on either the US or European markets
Relevant experience including:

working in a company actively considering reinsurance and/or
have published on funding high-cost cell and gene therapies

Knowledge of current trends in high-cost cell and gene therapies

Expert Contributors to this report

Jane F. Barlow, Senior Advisor, MIT Center for Biomedical Innovation Financing of Cures in the US (FoCUS) project and Chief Clinical Officer, Real Endpoints, a US market access company.
Steve Bradshaw, Managing Director of Valid Insight, a company providing specialist global market access, pricing, and health economics and outcomes research consulting to the healthcare industries.
Walter Colasante, Vice President at Charles River Associates, a global consulting firm that offers economic, financial and strategic expertise.
Jeremy Schafer, Senior Vice President and Director, Access Experience Team at Precision for Value, a healthcare marketing agency specialising in market access.
Anonymous - Vice President at a US-based biotechnology company

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Financing High-Cost Therapies through Reinsurance

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