As more high-cost drugs, including one-time gene therapies, come onto the market, employers are considering implementing a variety of contracting models to make sure their employees have access to these agents. However, even as innovative new approaches are being explored, employers have experienced challenges in executing them. But with the pharma pipeline full of specialty products, employers should explore which approaches may work best for their company.
“The emerging financial models for employers stemming from these new ultra–high-cost gene therapies include various reinsurance products from organizations like Cigna, CVS/Aetna, Prime Therapeutics and others,” explains Jorge Font, MPH, senior vice president of the access experience team at PRECISIONvalue. “These products involve a regular per-member-per-month premium paid to cover the risk of these low-frequency, high-cost claims.”
Reinsurance Does Not Have Big Uptake
This approach, he says, is similar conceptually to regular reinsurance, also known as stop-loss coverage, for high-cost claims. “Jumbo-sized self-insured employers (like insurance companies) may not require reinsurance since they have sufficient enrollment to spread the risk. Provided a decision is made to cover gene therapy, employers can decide how best to handle the risk. Employers must typically opt in to coverage, much like an optional rider. These programs may also feature value-based contract terms, with the manufacturer sharing all or part of the risk of failed treatment. At this time, there does not appear to be significant uptake in these commercial reinsurance programs given the lack of clarity on gene therapy cost/benefit and the more immediate focus by employers on the COVID-19 pandemic.”