Gene Therapy Part One: Sticker Shock, The Price of a Cure

We unpack the shock of multi-million-dollar gene therapies and why a one-time cure can collide with a self-funded plan’s budget. We explain in vivo versus ex vivo approaches, where care happens, and how employers can think about coverage choices and preparation.

• the cost reality of one-time gene therapies 
• who pays on a self-funded plan 
• tradeoffs of excluding versus covering therapies 
• why centers of excellence matter 
• differences between in vivo and ex vivo models 
• examples including hemophilia and sickle cell 
• operational needs for case management and stop-loss 
• a preview of hidden employer risks next week

Music by Alex Lambert.

Transcript

The Multi‑Million Dollar Cure

Who Actually Pays The Bill

Why Gene Therapy Is Different

In Vivo Vs Ex Vivo

Teasing Next Week’s Risk Focus

SPEAKER_00 0:17

Welcome to another Tuesday morning with Justin. I'm Justin Futrel, benefit advisor at True North Companies. Let me start with a number that might make you pull your car over. Today, gene therapies in the US typically cost anywhere from about four hundred thousand dollars all the way up to more than four million dollars for a single treatment. And that's not spread out over time. That's one patient, one moment, one bill. Now, these therapies can cure diseases we used to manage for a lifetime, which is incredible. But here's the real question most people aren't asking. What happens when the three or four million dollar miracle shows up on a self-funded health plan with no warning? That's the question. Who pays for it? Option one well, an employer could choose to not cover all um gene therapies or anything on a self-funded health plan. It's up to them. That runs the risk of frustrating employees. I saw last week that Mark Cuban called out the CEO of Deloitte because there was a drug that was denied by one of their employees, which had the long-term benefit of helping both that employee and the health plan. The second option, you could cover it and explore different ways to be proactive and or reactive as to hoping it doesn't happen or preparing that it's possible. So first, let's look at why gene therapy is different than normal health care. Think about it like car maintenance. You get an oil change, maybe a new set of brakes, occasionally a bigger repair. That's traditional healthcare, right? You go to the doctor, you get your wellness check. Gene therapy is different. It's more like replacing an engine with a custom-built, one-of-a-kind prototype, but it's designed for only one single driver. I can't just get behind the key, uh, turn the key at the ignition and drive it. It has to be one person. These treatments are highly complex. It's often personalized to one patient's DNA, and it's administered at very specialized locations, not just every local hospital is able to administer it. And that's good because these treatments carry serious clinical risk and they require ultra-specialized physicians and have higher safety protocols. So gene therapy, as you can appreciate, usually starts at large academic medical centers. And then hospitals that help run those original clinical trials over time or the facilities that are those centers of excellence, but the network is intentionally small. And that's where we go to what are different types of gene therapy? And so the two I want to go through are infusions and custom manufacturing. And here's where it gets really interesting because you have something like in vivo gene therapy. Um it's simpler, relatively speaking. It'd be like installing a new software directly into your body. The therapy is infused into the patient, there are no cells removed, and often outpatient or shorter stays for care. Examples of this are like hemophilia gene therapies. Still expensive, still serious, but less complex. Then there's ex-vivo gene therapy. This is that custom-built Ferrari engine that we talked about. This is next level. Imagine doctors remove cells from your body, ship them to a lab, scientists genetically modify them just for you, and then the new therapy is infused back into your body. Think about extensive inpatient care and follow-up. Think about sickle cell disease, beta thalassemia, and ultra rare genetic disorders. This is healthcare at its most advanced and most expensive use case. So the hidden risk for self funded employers is what we'll talk about next week.