2019 is expected to a strong year for the orphan drug industry with an expected 10% surge in sales growth. Contributing to this growth will be new treatment launches particularly from cell and gene therapies. As these novel therapies are geared towards commercialization, the industry is witnessing a change in approach by manufacturers, regulators and payers.
Here are the main trends that you should know about:
1. Growth in Dedicated Cell and Gene Therapy Personnel in HTAs, says Sophie Schmitz, Managing Partner
According to analyst reports published earlier in January, the global gene therapy market is estimated to generate anywhere between $2.3 billion and $4,4 billion by 2023/24. This is supported by over 1,000 late stage cell and gene therapy trials currently registered in clinicaltrials.gov. Whilst the US is currently the highest contributor in the gene therapy market, other regions, namely Europe, LATAM and APAC, are also expected to experience significant growth. Anyone who has witnessed the plethora of cell and gene therapy clinical trials, conferences, reports and investor activity will testament to this.
Gene therapy coming into the mainstream of medical practice brings certain challenges, namely high treatment costs, uncertainty of evidence over the long term, manufacturing complications and operational complexities of administration. As a result, new financing and payment models, advances in policy and relevant manufacturing guidance as well as a clear compliance framework are needed. These changes need (and deserve) a greater number of specialised staff at reimbursement and policy level, to work together with all the key stakeholders, and provide clear and robust advice to industry.
The FDA has led the way already in 2019, indicating an additional 50 staff to conduct clinical investigations, develop and review cell and gene therapies in collaboration with other stakeholders. My prediction (and hope) is that other regulatory and reimbursement agencies follow suit in growing dedicated cell and gene therapy personnel.
2. Christina Poschen, Consultant expects increased pressure on a systemic change for gene therapy
Last year I predicted an increase in gene-therapy launches and attention and I still believe this is true, however, I think 2019 should be the year to start tackling the challenges that come with the prospective of new therapies.
And this is just the beginning: I believe we need a change in the functioning of our healthcare systems. These are traditionally set up to finance chronic care which is paid for (or reimbursed) once a therapy is purchased. Healthcare systems showed over years how they can handle long-term payment for chronic therapies with prices of up to €500,000 a year (e.g. Soliris).
Gene-therapy on the other hand offers a “cure” or an end to life long chronic treatments, and often comes at a high one-off price. However, this high one-off price is one of the key challenges we are facing. Without any changes to the way therapies are reimbursed or paid for, small insurance funds might go bankrupt if they need to pay for 3 or 4 gene therapies with prices of several million each in one year.
I hope that 2019 will be the year when players in the healthcare system are working together to create a sustainable payment model enabling the insurance funds to provide their members with access to innovative treatments and at the same time fit manufacturers’ business models.
3. Brexit Joanna Fernandes, Senior Analyst opines that Brexit proceedings will cast a gloom on the industry
With exit day currently set on the 29th of March, I anticipate Brexit, regardless of the outcome, will have a major impact on UK pharma and biotech industry in 2019.
The first half of this year will likely focus on the development of a new withdrawal bill. The recent UK parliamentary vote indicates that if alternative arrangements are made to the backstop, then the new divorce deal could be approved. Whether or not the EU will renegotiate remains in doubt. Either way it is likely to continue to be a chaotic time with many uncertainties, meaning that British pharma will have to maintain planning for all scenarios. This is costly, time consuming and has so far included setting up pharmacovigilance personnel and production facilities in Europe, stockpiling of medicines in the UK, and supply chain adaptation.
The second half of the year will be more positive for the industry, if a deal is agreed. It will likely involve implementing the deal and focusing on the future relationship with the EU. The UK’s intentions regarding medicines regulation and assessment will likely become clearer and supply routes will become less congested as the year progresses.
The approved MP amendment to try to avoid a no-deal, is not legally binding meaning this scenario is still on the table. If the UK exits the EU with without a deal, small and medium sized British pharma companies will be hit the hardest. While there are a few allowances being proposed by the MHRA specifically for SMEs including no charge on scientific advice, there will be significant downsides and costs involved in a no deal Brexit that SMEs are less able to absorb compared to big pharma.
4. Max Rex, Senior Analyst asks :Will 2019 be the year of the US drug pricing revolution?
It appears that the winds of change may finally be blowing upon the pharmaceutical industry’s pricing tactics in the US. In an increasingly fraught and partisan political landscape, one of the few remaining areas of consensus between the two major parties is the issue of reducing drug prices. Through 2018, the Trump administration floated various proposals aimed at lowering prices, including introducing international price referencing to Medicare Part B. However, since the Democrats won control of the House of Representatives in the November midterm elections, there has been a wave of activity. Both the Senate Finance Committee and the House Oversight Committee have announced upcoming investigations scrutinizing the drug pricing practices of pharmaceutical companies. Legislation has been introduced by Senator Bernie Sanders and Representative Elijah Cummings which aims to force companies to reduce prices using similar, but much more aggressive tactics as proposed by the Trump administration.
Pharma is gearing itself up for a battle on this issue, with recent figures showing that the industry has spent a record amount on lobbying activities in 2018. Though there may still be enough resistance in Congress to block changes as large as those proposed by Senator Sanders, it seems likely that some policy changes will be coming.
Alongside these developments, there is the not-so-small matter of the growing influence of the Institute for Clinical and Economic Review (ICER), the unofficial (for now) pricing watchdog in the US. We could see more insurers following in the steps of CVS Caremark and using ICER cost-effectiveness reviews in their coverage decisions. ICER has historically been critical of the pricing strategies of the pharmaceutical industry, so its growing influence is another warning sign for the industry.
5. Nader Murad, Associate Consultant takes a look at the potential for harmonized payment models for gene therapies
One of main highlights from JPMorgan’s 2019 Healthcare Conference was Bluebird Bio’s proposal to engage in a performance-based staged-payment contracts with payers for its anticipated Thalassemia gene therapy LentiGlobin. This type of payment model has been widely discussed by stakeholders as a solution to provide patients access to gene therapies while addressing payer concerns on the therapies’ limited long-term efficacy / safety data and short to medium term budget impact. Novartis’s Avexis has also signalled its interest in this type of payment model as it gears up to launch its gene therapy, Zolgensma, for SMA type I. Last year, Spark Therapeutics and Novartis also noted that they were considering novel payment models including cost spreading for Luxturna (gene therapy for a rare inherited retinal disease which leads to blindness) and Kymriah (CAR-T for ALL).
On the payer side, Mark Trusheim, strategic director of the MIT Center for Biomedical Innovation’s NEWDIGS program announced that some Massachusetts based health insurers will initiate a staged-payment outcomes-based pilot program to fund access to Zolgensma, and if successful, expanding the approach to include other gene therapies. European payers have been less vocal on such payment models the structure of their healthcare systems should be supportive.
In Europe, where most major markets have a single payer healthcare system, the importance of harmonizing payment models across countries is that it will facilitate cross-border access; this is especially pertinent considering that many gene therapies can only be offered in select treatment centres that may only exist in some countries. As for the U.S. where there is a high number of health insurers across states, industries, and major employers, harmonizing payment models for such therapies means that a more insurers are likely to cover gene therapies and therefore increase patient access as harmonization can facilitate continuity of payment streams across insurers and to manufacturers.
6. What next after CRISPR Cas9? Jack Rawson, Analyst predicts new age gene editing breakthroughs likely to hit the market
CRISPR Cas9 will undoubtably remain one of the most talked about scientific breakthroughs in 2019. Especially considering the news that CRISPR technology was used to modify human embryos in late 2018.
Aside from the considerable ethical issues, it is impossible to deny the potential medical uses of precise gene editing. In August 2018 there were 18 studies listed on clinicaltrials.gov involving CRISPR, in January 2019 the number stands at 24, and as we progress into 2019 this number is only going to increase. Many of these studies will continue to investigate diseases like HIV, sickle cell disease, thalassemia and cancer.
The early pioneers in CRISPR include Editas Medicine, Crispr Therapeutics, and Intellia Therapeutics. However there are new gene editing systems such as CRISPR Cpf1, as well as non-CRISPR systems like Tal deaminases which edit bases. Base editing for example, offers technical benefits over CRISPR systems and may challenge the hype around CRISPR Cas9. Should the CRISPR Cas9 pioneers suffer a clinical failure, another gene editing technology may come to the foreground.
With late-phase trials in major markets being predicted in 5 years’ time, much of the focus will be on the regulatory and ethical issues. Among areas discussed will be germline modification and the clarification of the medical application of gene editing technologies.
If you would like to know more about these trends, please get in touch with us at [email protected].