Durable, potentially curative therapies offer great hope for patients and society. Short, even single dose, treatment regimens are expected to yield lasting health benefits. However, there is uncertainty about the volume and nature of therapies that are coming as well as concern that large, single payments for a wave of therapies will challenge the current reimbursement system, more oriented towards paying for chronic treatment over time.

This section provides a concise resource for payer organizations wishing to think through the implications of a particular individual durable cell or gene therapy for their business(es) and the potential precision financing solutions, processes and capabilities they may need to put in place to prepare for patient access to these therapies.

We have structured this resource around a set of key questions. A companion worksheet to assist you in understanding the implications for your organization and potential solutions is provided here:

Download the Individual Indication Worksheet (xlsx)

Please note

Use of the Paying for Cures Toolkit website and its planning tools is subject to our Terms and Conditions

Figure: Key Questions—Payer Individual Indication Assessment

Expected financial impact

Understanding the expected financial impact of a durable therapy for a payer population requires an assessment of:

a) the expected patient volume the plan might see;

b) the expected Per-Member-Per-Month (PMPM) impact and its actuarial volatility

Population Estimator Tool and a Therapy Impact Modeling Tool to help you analyze the financial impact for your plan at a strategic level are provided in the companion worksheet. We advise each company to conduct its own more detailed operational analysis before making final decisions.

What is the estimated patient volume your plan can expect ?

MIT NEWDIGS FoCUS undertook a pipeline analysis to determine the scale of the financing challenge of curative therapies in the United States. The team developed estimates of the clinically-relevant national incidence and prevalence of patients who might benefit from various product-indication launches. While each payer will need to develop its own assessment, we have made available those estimates (December 2018 pipeline of durable cell and gene therapies). 

The Population Estimator Tool customizes those national incidence and prevalence estimates to your plan based on your population size to suggest the number of potential treatment-eligible patients in your plan.  You will want to further think through the age distribution of particular therapies and unique elements of your plan as you refine your assessment of plan-specific impact. For example, Medicare plans will likely see a larger share of the oncology cell therapies; Medicaid plans will see a larger share of treatments to address genetic conditions that manifest in childhood.

What is the estimated PMPM impact and volatility?

The worksheet also includes a Therapy Impact Modeling Tool. By entering some additional specifics, the tool can help you estimate the per-member-per-month (PMPM) spend associated with estimated durable cell and gene therapy expenditure. The tool also estimates the maximum potential impact statistically, as plans can have challenges with large, unexpected costs.  Finally, the estimated cost for one patient is included.  Statistically, for therapies with small target populations, a given plan may expect to see no patients on therapy in most years, and a PMPM impact that reflects that.  However, in the year that that patient does materialize, the plan will have the full cost of the treatment.

What are other factors to consider?

The tools look at durable gene and cell therapies as an incremental category. They do not take into account any additional treatment costs or any cost-offsets from existing medicines that might be replaced by these therapies or downstream medical, pharmaceutical or other benefits or cost savings that might be achieved.

Also, there is great uncertainty as to the degree of patient and provider adoption of these therapies and the speed of adoption. This is a new area of science, few products are on the market and those that are, are relatively newly available. As uptake will vary by therapeutic area, and individual product and market dynamics, each organization will need to assess this for itself for the target patient population.

Therefore, the estimates should be used to inform strategic assessments, but with appropriate appreciation for the challenges of estimating a new-to-world class of therapies. We advise each organization to conduct its own more detailed operational analysis before making final decisions.

Ability to address risks through current approaches

Durable, potentially curative therapies create three potential financing challenges.

  1. Payment timing: Therapies can involve substantial upfront payment for multiple years of therapeutic benefit.
  2. Actuarial risk: The number of eligible patients in a payer’s population may be uncertain and could vary significantly from period to period.
  3. Therapeutic performance risk: Real world efficacy and durability are uncertain at the time of initial regulatory approval and market launch.

In anticipation of highlighting higher potential solutions for your situation, the Solution Prioritization Tool asks you to use the data from the Therapy Impact Modeling Tool to assess how a particular therapy could affect your plan in terms of acturial risk, payment timing, performance uncertainty and your ability to handle the therapy optimally from an executional perspective.

Actuarial Risk: Can your organization absorb the financial impact in total, given your risk tolerance and current risk management approaches?

The Therapy Impact Modeling Tool illustrates the annual estimated PMPM for the indication, the expected likely maximum cost that the plan could experience, and the cost if a plan has one patient (for ultra-rare therapies, small plans statistically will likely have either no or one patient, though which of the two scenarios will transpire is difficult to predict). Based on this, you can assess whether your plan is likely to be able to manage the actuarial uncertainty associated with the potential number of patients and the cost of the medicine in the timeframe they are expected.

The Solution Priorization Tool will ask you to evaluate:

  • Does our organization have significant actuarial risk for the therapy that is not managed through our existing mechanisms (risk premium, stop loss, reinsurance, risk pooling, etc.)?
  • If our organization is unlikely to treat patients (95% of outcomes have no treated patients), would treating one patient cause significant financial impact if it occurs?

Payment Timing: Can your organization absorb the financial impact in the timeframe it is expected?

Based on the expected number of patients for the indicaiton, and insights from the Therapy Impact Modeling Tool's annual estimated PMPM for the indication, expected likely maximum cost that the plan could experience, and cost for one patient, you can assess whehlikeallows you to estimate the expected per member per month (PMPM) impact on your plan for the medicine. It also considers statistical confidence intervals and calculates the likely maximum number that the PMPM will not exceed.

Note, that these estimates do not take into account any additional treatment costs or any cost-offsets from existing therapies that might be displaced by these treatments or subsequent medical, pharmaceutical or other benefits or cost savings that might be achieved. As you further analyze these questions internally, this would be something to consider.

The Solution Priorization Tool will ask you to evaluate:

  • Given the Costs/PMPM, would the financial impact be higher than our organization can absorb in any years if the high (95%) outcome occurs?
  • Would this financial impact only be an issue in early years (surge effect) due to prevalent disease frequency)?

Performance Uncertainty: Does your organization wish to include performance requirements for the therapy?

As noted earlier, real world efficacy and durability are expected to be uncertain for a number of these therapies at the time of initial regulatory approval and market launch. Your plan may expect to disagree with the developer at the time of negotiation on the expected performance and therefore the value of a particular therapy. Performance guarantees between payers and developers can help bridge differences of opinion on expected performance and allow patient access to medicines. Some payers may want a performance guarantee in the event of failure to secure some “money back.” The latter is more of a cost containment strategy than a precision financing solution, but we have included both considerations in our decision support tool below.

The flow chart below highlights key considerations raised by FoCUS participants in assessing need, type and feasibility of potential performance guarantees.

Consideration for Performance Guarantees

Based on these considerations, the Solution Priorization Tool will ask you to evaluate:

  • Will a performance guarantee be required to secure/provide therapy access?

Does your organization need executional support?

It may not be efficient for all insurers to build capabilities internally to serve patients treated with durable therapies or to establish their own contracts with treating providers and manufacturers. FoCUS identified a number of capabilities required to administer gene and cell therapies, as noted below.

Capabilities required to manage durable therapies

Carve out/Pool risk

  • Underwriting: Premium setting
  • Pool and bear actuarial risk
  • Payment financing
  • Claim adjudication & reimbursement


  • Contracting with developers
  • Patient eligibility and utilization management
  • Product reimbursement
  • Patient data collection for performance contract
  • Adjudication of any performance criteria
  • Collection and distribution of performance-based rebates and/or payments
  • Patient mobility management/contract

Care Coordination Services

  • Provider network management
  • Provider reimbursement

Each organization will want to consider whether it has the capabilities to manage these therapies in house. While we have included this question for an individual therapy, the assessment should be done more broadly for gene and cell therapies as a group.

The Solution Priorization Tool will ask you to evaluate:

  • Does our organization need external support to manage this therapy appropriately?

Preferred precision financing solution(s)

The Solution Prioritization Tool builds on the insights from the expected financial therapy impact as detailed in the Therapy Impact Modeling Tool and on your organization’s preferences, to help you assess precision financing needs for your organization. Based on the choices you make, the Solution Prioritization Tool suggests preferred financing solutions.

You may follow hyperlinks in the priority financing solutions to read descriptions of each solution, and considerations for different therapy and payer types. The same content may be accessed here.

Other solution design elements

The Solution Prioritization Tool will also point you to other solution design considerations you may wish to consider in building a full design solution to provide access to your chosen therapy. You may follow hyperlinks in the section to read descriptions of each element. The same content may be accessed here.