Global CGT Therapy Market Exceeds $10 Billion

The field of medicine is rapidly evolving, with innovations in technology paving the way for new treatment modalities that offer hope for previously untreatable diseasesAmong these is Cell and Gene Therapy (CGT), a groundbreaking approach that modifies or replaces the patient's cells or genes to address various health conditionsAs CGT becomes increasingly talked about as a potential solution for chronic ailments, it also faces significant hurdles, particularly in its financial and reimbursement structures.

This year has brought challenges to the CGT landscape in ChinaDuring national negotiations for medical insurance, none of the four CAR-T cell therapies were included in the latest insurance catalogueThe stark reality is that a price point of over 500,000 yuan (approximately $77,000) effectively becomes a barrier, while therapies priced under 300,000 yuan don’t make the cut either, creating an invisible threshold that limits patient access.

Conversely, some CGT therapies are gaining traction through innovative payment models

For example, the CAR-T therapy, Yikaida® (Acilucel injection), has been included in multiple regional affordable health insurance schemes for three consecutive yearsThis approach allows payment to be divided into stages based on the therapy's effectivenessThe inclusion of Luxturna, a gene therapy for blindness, in the affordable health insurance plans of provinces such as Heilongjiang, Hebei, and Shaanxi demonstrates that there is a movement toward making CGT more accessible.

The payment logic behind CGT therapies is complex, given the intricate nature of their production and the high costs often associatedWhile they offer unprecedented possibilities in terms of therapeutic outcomes—potentially delaying the progression of diseases or even offering lifelong cures—the evidence supporting their effectiveness and safety remains under scrutinyAccording to Chen Yi, a professor at Tsinghua University's Institute for Hospital Management, CGT therapies have significant potential for addressing unmet clinical needs

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However, their complexities often lead to high price tags and challenge existing reimbursement frameworks.

Globally, the predominant model for reimbursing CGT therapies is performance-based payment, which is utilized in several leading markets, including nations in the European Union, the UK, and the USPayment models vary in their practical application; for instance, Italy and Spain employ phased payments based on individual clinical efficacy, while the UK and France utilize Conditional Evidence-based Payment (CED) systems.

In China, however, the CAR-T efficacy risk payment agreements typically involve negotiations between companies and third-party management agencies, with patients who are covered either by affordable health insurance or high-end commercial policiesThe dilemma exists as, despite being beneficiaries of private insurances, the effective risk payment for CAR-T therapy falls predominantly on the companies and patients themselves, leading to burdens that could be alleviated with more inclusive insurance frameworks.

So what does China's payment logic for CGT therapies look like? According to Yanxin Technology, a provider involved in the design of affordable health plans across provinces and cities, the prevailing logic centers around “shared risk.” This means insurance companies pool funds collected from numerous insured individuals to cover the costs for a few patients requiring high-cost CGT treatments

This model aims to prevent patients from suffering financial distress due to exorbitant medical expenses while simultaneously fostering medical innovation and accessibility.

Moreover, there is an increasing trend among commercial insurance firms to offer specialized products covering CGT therapies, thus providing greater financial support for patients who require coverageThe emergence of these products indicates a growing recognition of the necessity for financial solutions tailored to the unique challenges posed by CGT therapies.

As CGT therapies have continued to be adopted in clinical settings, the requirements for accurate diagnosis, treatment indications, and procedures have become more refinedIt is essential for insurers to apply rigorous criteria when evaluating whether patients meet the necessary standards for treatment, ensuring that therapies are both necessary and appropriate, to guard against misuse and overmedicalization.

The shift towards more precise insurance allocations is echoed by various insurers operating health plans, indicating that while affordable health plans offer comparatively flexible coverage for special drugs, CGT therapy reimbursements require consideration of position factors—including the accuracy of claims and the efficiency of direct payments

As new indications for drugs receive approval, fresh assessments are often necessary before reimbursements can be offered.

Looking forward, the global CGT market has seen tremendous growth, with the market size surging from $1.19 billion in 2019 to an estimated $11.11 billion in 2023, projected to reach a whopping $137.19 billion by 2028. With therapies such as TCR-T and CAR-NK being developed alongside the more established CAR-T therapies, advancements in clinical applications could potentially lower costs in the future.

Experts in the field have noted that besides CAR-T therapies, the scope of CGT now includes a range of novel drugs based on technologies like mesenchymal stem cells, siRNA, and adeno-associated virus (AAV) vectorsThe hallmark of CGT therapies is their personalized nature; however, this often comes with significant financial implications.

The disparity in reimbursement patterns across regions has raised concerns about the potential for a “death spiral” in affordable health plans

In economically advanced areas, dynamic adjustments in health insurance catalogues can help mitigate this risk, whereas less affluent regions, which inherently struggle with fundraising capabilities, may face soaring claim rates.

There are ongoing discussions surrounding the establishment of a centralized fund akin to models in Germany, which would allow better risk allocation among different regions, ultimately working to balance disparities in healthcare expenditure and improve regional equity.

With the ongoing approval of more CGT drugs, what strategies can payment entities implement? Chen Yi outlines two vital approaches: enhancing real-world data research to navigate the complexities of performance-based payment systems, ensuring standardized procedures and efficacy data collection; and integrating public and private insurance mechanisms to promote the growth of commercial group health plans