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Business & Regulation Trends & Forecasts, Advanced Medicine

Bridging the Gap

Scientific innovation and market reality are almost like an unstoppable force colliding with an immovable object. Research has progressed at a rapid rate, but are we prepared to deal with the challenges of manufacturing and accessibility? Providing that the industry rises to the task, Jennifer Klarer, a Partner & Head of Cell and Gene Therapy at the Dedham Group, a Norstella company, suggests the future could be bright.

What advice do you have for companies that want to be successful in this space?

For early-stage companies seeking seed funding to launch and advance their clinical trials, there are several approaches they should consider. Firstly, exploring novel funding avenues can be highly effective. Beyond traditional investors, you might consider approaching venture capitalists, angel investors, crowdfunding platforms, government grants, and strategic partnerships. Additionally, reaching out to patient advocacy groups or foundations related to the specific disease or condition you are targeting can lead to funding opportunities.

As the industry rapidly evolves, manufacturers of approved products face challenges with scaling to meet demand. An essential aspect of mitigating these issues is getting FDA approval for new manufacturing sites and processes. This, in turn, will hopefully establish a structured framework that ensures consistency in the final product between different manufacturing sites without demanding significant financial and resource investments to scale. It is my belief that this would help early pioneers in the industry remain competitive as emerging competitors enter the market.

Furthermore, anticipating commercial and access challenges down the line can inform your early investment decisions. If you’re a biotech company, understanding the roles and expertise needed to pave a successful path to market is crucial. Consider which hospitals in your country are most focused on academic studies and clinical trials, and identify potential leaders in commercial product utilization. Plan to align your clinical trial sites in a way that ensures you can reach sites that will actively use your product once it’s on the market. Early planning can set the stage for a smoother path to commercial success.

If you are also aiming to implement innovative payment models (and note that some aspects of the cell and gene therapy field are becoming increasingly open to these models), you must make the process more accessible. It’s crucial to ensure that the endpoints associated with these programs are included in claims data. Having readily available endpoints in claims data simplifies the implementation of innovative payment models, making them more effective and efficient. Collaborative efforts within the industry can help identify these critical endpoints, aligning risk and reward trade-offs with product utilization.

What projects are you working on?

Our historical focus as a group has been primarily on market access. However, with the emergence of cell and gene therapy and other novel treatment areas, we've shifted our attention toward commercial strategy. One aspect that has been particularly intriguing in our work relates to mapping out the order fulfillment process in gene therapy.

Implementing standard products in a hospital typically requires the involvement of one or two departments in the patient journey. Gene therapies, on the other hand, bring in several more. The likes of which include the pharmacy, treating physician, research department, cell processing department, and genetic testing labs, as well as genetic counselors. Coordinating these elements and ensuring proper reimbursement for the services provided requires a high level of organization. Hospitals must establish this level of coordination, and ideally, community practices will follow suit.

Taking a different perspective, assisting pharmaceutical companies or biotech firms in training each of these departments is an emerging trend. “What knowledge does each department need? How can they effectively communicate with one another to ensure a seamless process for patients?” – these questions are usually a good starting place. The real challenge is determining where these questions should be directed and how to internally manage and resolve them within the company.

Of course, this is just one example of the many commercial projects we’re engaged in. Besides addressing complexities in payer coverage and novel contracting approaches, the operational setup of provider sites for these products is a critical focus. It involves creating an environment where these sites receive comprehensive support and are well-prepared to manage the intricacies of these therapies. Planning and foresight are paramount, and though some manufacturers have excelled in this regard, especially in new areas, there’s an element of building the car while driving it. We aim to gather insights on what has worked and what hasn’t – with the goal of minimizing the need to build while on the go.

What are the biggest challenges the sector faces?

The sector faces three key challenges. First, manufacturing costs and scalability are a major barrier in the cell and gene therapy field. Given the novelty of these therapies, we have the potential to make production more sustainable. But this process is costly – and we have a shortage of scientists with the right manufacturing expertise.

The second challenge pertains to reimbursement gaps. The existing reimbursement infrastructure in the US healthcare system is misaligned with the needs of cell therapy and ex vivo gene therapy patient journeys. In cases where inpatient treatments are administered, such as CAR-T or ex vivo gene therapy for beta thalassemia, reimbursement is tied to a predefined bundle structure based on historical data. This system limits reimbursement to the most applicable Diagnosis-Related Group (DRG). In cases where DRG is determined by historical data, which is often based on patient journeys such as transplants, the reimbursement falls significantly short of the actual cost of these therapies. While commercial insurance and managed Medicaid can circumvent this issue to some extent, Medicare Fee for Service patients face significant barriers too. A broader infrastructure change and acknowledgment from the Centers for Medicare and Medicaid Services are necessary to ensure adequate reimbursement at provider sites.

The third challenge is funding hesitancies within the industry, partly because of misunderstandings regarding why sales forecasts for cell and gene therapy products have been missed. These hesitancies could be mitigated by providing in-depth analyses of commercial and anticipated access dynamics, along with real-world data to identify the total eligible patient population. Many cell and gene therapy products have struggled to reach their eligible populations because of commercial and access-related issues, which have not always been adequately communicated to potential funders. Pitch decks should include how a product can reach eligible patients or how its commercial path differs from existing products. For example, the next generation of cell therapies could be designed for community settings, expanding access beyond the few hospitals currently offering these therapies. These aspects should be part of the conversation in investor meetings to secure necessary funding.

What are the most promising prospects in CGT?

Our company is involved in a number of disease areas, but we definitely place a strong focus on oncology, and conditions involving organs with slower cell division rates. In fact, AAV-based gene therapies targeting organ systems are proving to be strong treatment candidates, similar to the progress we’ve seen in treating certain leukemias and lymphomas through transplantation or CAR-T therapies. Though questions about the long-term durability of these treatments remain, I’m looking forward to seeing how the discussion pans out.

As we shift our focus to larger disease states with more patients per major payer, we hope to see a change in how external parties, such as investors and stop-loss insurance carriers, perceive the industry. This shift may encourage more significant investment and participation in reshaping the industry’s financial landscape.

What have been the biggest milestones for CGT so far?

In the industry, I enjoy seeing the continuous achievement of significant milestones on a daily basis. This industry is revolutionary, though still very much in its infancy. Challenges in making cell and gene products scalable and accessible to all eligible patient populations are quite evident, but there is much headway left to be made.

Beginning with ultra-rare diseases as the initial test cases with curative potential makes sense, as these are the populations that need it the most. Subsequently, the goal is to expand to patient groups who can manage their conditions but would greatly benefit from a more definitive solution rather than mere symptom management. Every minor achievement, or what might one day be considered a minor milestone, is a significant step forward for the industry. In other words, every step counts.

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About the Author
Jamie Irvine

Associate Editor, The Medicine Maker

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