What Self-funded Employers Need to Know About Gene Therapy

When the U.S. Food and Drug Administration (FDA) granted approval to the first two gene therapies in 2017 and 2019, it was a significant leap forward in the field of rare disease medicine.

One of the therapies, Zolgensma® (onasemnogene abeparvovec-xioi), was approved for the treatment of spinal muscular atrophy, the leading genetic cause of infant mortality. It was described by then-acting FDA Commissioner Ned Sharpless, M.D., as a “milestone in the transformational power of gene and cell therapies to treat a wide range of diseases.” He added, “The potential for gene therapy products to change lives of those patients who may have faced a terminal condition, or worse, death, provides hope for the future.”

At Independence Blue Cross (IBX), the emergence of gene therapy marked a new opportunity to help our members. In 2023, we established the Advanced Network for Gene-Based Therapeutics, which supports both adult and pediatric patients. This network is designed to give our members access to potentially life-changing gene-based therapies delivered in facilities at the forefront of gene therapy research, training, and administration. The staff at these facilities are trained in the recommended protocols established by the manufacturer to get the best possible results.

But this transformative, life-changing care comes at a price. The majority of approved gene therapies carry an estimated cost of over $2 million, which doesn’t include the cost of care and administration from the hospital.

We understand that the high cost of gene therapy is a challenge for our self-funded employers (employers who take on all the risk when it comes to their employees’ medical claims). Suffice it to say that a multi-million-dollar claim would overwhelm a self-funded employer. To help manage this risk, IBX has developed strategic solutions that:

Prepare and anticipate potentially unexpected claims
Ensure quality care and support
Contain the cost of the most expensive therapies

Managing the Cost of Gene Therapy

With 11 FDA-approved gene therapies on the market and many more in the pipeline, it’s imperative for health plans to have comprehensive strategies in place to control costs and minimize risks for self-funded employers. IBX has taken the following steps to help self-funded employers anticipate, prepare for, and mitigate some of the costs of gene therapy while maintaining quality care for their employees — our members.

Stop loss coverage

First and foremost, we advise all self-funded employers to obtain stop loss coverage. It provides them with an added layer of protection. We have collaborated with Sun Life, an independent company, as our national stop loss coverage partner for their national network coverage and advanced reimbursement process.

Manufacturer discounts and outcomes-based agreements

IBX has secured discounts at our local facilities in our Advanced Network for Gene-Based Therapeutics. We are also working with the Synergie Medication Collective Gene+ (Synergie) program to secure better national discounts as well. The Synergie program will deliver cost risk management, predictability, and investment protection to ensure access to these life-saving therapies.

We also negotiate outcomes-based agreements with manufacturers. These agreements include a set price and measurable expected outcomes for a specific therapy. If the therapy delivers on its intended outcomes, we pay the set price. If it doesn’t, the manufacturer refunds a portion of the cost.

These are our most effective tools to control the rising costs of gene therapies.

Care management wraparound

Many patients who receive gene therapies have highly complex medical conditions. To help address this, we’ve collaborated with Penn Medicine and Children’s Hospital of Philadelphia (CHOP) to develop a patient-focused, high-touch care management approach. IBX Registered Nurse Health Coaches provide extra support to members who are approved to receive these therapies.

Our Health Coaches, in partnership with care teams at Penn Medicine and CHOP, can assist with every step of the process, from diagnosis to post-treatment. The dedicated team is trained to answer member questions, empower member decision-making, and facilitate connections between members and the specialists on the Advanced Network care team.

The Road Ahead

Gene therapy continues to offer hope to patients in the rare disease space. The FDA could approve as many as ten gene therapies by the end of 2025, and many of these therapies are beginning to treat more common diseases. The potential patient population for gene therapies is small but growing.  Although most employer groups have yet to have a member who needs gene therapy, as the number of gene therapies on the market grows, so will the risk that employers could face a gene therapy claim in the future.

For the past eight years, IBX has actively worked to understand gene therapy. We can help you prepare for and anticipate future unexpected gene therapy claims while delivering best-in-class gene therapy care.

To learn more about our cost-saving strategies, please reach out to us.