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Business & Regulation Advanced Medicine

Let’s Meet in the Middle

As part of the International Society for Cellular Therapy’s (ISCT) Commercialization Committee, we’ve developed a business model for cell and gene therapies. We envisaged three key variables: willingness to pay, benefit of the product, and cost. We found that there’s an ideal reimbursement market adoption zone where these three factors overlap to create conditions whereby payers will be willing to adopt a cell or gene therapy. Companies are spending a lot of money developing these therapies, with little to no return on investment until around phase II, where companies can partner. This, combined with the fact that the cell and gene therapies we’ve seen so far are only able to treat a small number of patients, resulting in high production costs, is prompting manufacturers to price their products very highly. But payers on the whole have quite low willingness to pay these high prices; and this is pushing these therapies outside the ideal market adoption zone.

The question for the industry is how do we modify price or willingness to pay to ensure patients have access to these therapies? One method is pharma economics – convincing the world that these therapies are actually worth it. We’ve seen from Dan Ollendorf (ICER) – and Nick Crabb also touches on this – that these therapies may be worth the high upfront costs based on standard measures of value – both to patients and to healthcare systems – used by health economists. And we mustn’t forget the intangible benefits that a cure provides: you’re literally changing someone’s life, as well as the lives of their family and friends. This is perhaps especially true for pediatric patients. Some of these therapies are given to young children, who otherwise might not have lived to their teens, the chance to live a full life. And that is both incredible and valuable.

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About the Author

Bill Milligan

SVP Corporate and Business Development, Steminent Biotherapeutics Inc.; and Chair, ISCT Business Models & COGs Committee.

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