Our Mission at Aradigm
Making Breakthrough Cell and Gene Therapies Accessible and Affordable
When I was in medical school thirty years ago, there were a host of rare, genetically-based diseases and conditions thought to be untreatable. Today, due to astounding breakthroughs in biomedical technology and the development of targeted cell and gene therapies (CGT), an ever-growing number of these diseases are now actually curable.
For millions of patients, families, and loved ones, not to mention their doctors and caregivers, the potential relief from that suffering, debilitation, and fear must seem like a scientific miracle. But the promise of a healthier, longer, disease-free life is out of reach for far too many. Not because those therapies won’t help—but because their cost and financial risk are too high in our fragmented, financially misaligned healthcare system.
We launched Aradigm to solve that problem. We’re bringing payers, providers, manufacturers, and purchasers together around a powerful new model for financing and risk-sharing that enables affordable access to life-changing therapies.
The Barriers to Transformative Therapies
The development of CGTs has been a breathtaking scientific achievement. Today, the Food and Drug Administration (FDA) has approved more than 40 cell and gene therapies for various cancers and life-threatening or life-altering diseases like sickle cell disease, hemophilia, inherited retinal disease, and spinal muscular atrophy, a once-fatal childhood disease. There are more than 4,000 other CGT products in development pipelines, including treatments for type 1 diabetes, Parkinson’s disease, and multiple sclerosis.
While this clinical progress has been remarkable, the potential impact of these therapies will not be fully realized without parallel innovation on the way they are financed and delivered. As anyone who has worked in our healthcare system knows, access and affordability are challenges at every turn, in large part because of the way we pay for care. Those barriers are especially formidable for cell and gene therapies developed to cure relatively rare conditions.
For a single patient, treatment costs can range from $1 to $4 million dollars. As clinically powerful as CGTs can be, they create new financial risks and uncertainties that threaten their adoption and viability at a time when our nation’s overall healthcare spend is already near the breaking point.
Consider the predicaments that key stakeholders face:
Employers & Payers bear the coverage risk. Ideally, patients treated with CGTs will lead healthier lives and avoid years of costly care, but the long-term durability of these treatments is uncertain, and the financial benefits may never fully materialize. At the same time, a very small number of covered lives can now drive a disproportionate share of total healthcare spend, amplifying existing cost imbalances. To manage this, organizations may feel pressure to limit coverage to avoid catastrophic claims and unsustainable premium increases, yet offering broad coverage can also make them a magnet for individuals in need of costly therapies.
Providers must pay the upfront costs for CGTs at a time when they are already under tremendous financial pressure. Administering CGTs may also require investment in specialized delivery centers, care team coordination, pharmacy and infusion services, and ongoing monitoring. The difficulty of predicting patient volume makes these financial burdens and investments even more risky.
Manufacturers are at risk because of the uncertainties described above. R&D and manufacturing costs are massive. Durability and efficacy remains unproven. Patient volume for rare conditions is limited, so prices must be set high enough to recoup costs without attracting reputational risk. Manufacturers cannot know be certain that payers will authorize claims, providers will administer therapies, and purchasers will include coverage.
In addition, patients in need of CGTs may face personal, socio-economic, and geographic barriers to treatment. Specialized centers may be far away. Patients may be too sick or lack the necessary resources or support.
Together, these factors can impede scientific and clinical progress that has the potential to change the very way we understand and treat disease.
Stepping into the Breach
At Aradigm, we see this as a defining moment for U.S. healthcare. Access and affordability are persistent, endemic problems across healthcare. But if we can’t find a way to make the transformational benefits of CGTs sustainably available, then our system is truly broken. On the other hand, if we can solve this particular problem, then we can clear the way for a rapidly growing category of new therapies and accelerate clinical innovation in an area with the potential to change millions of lives.
With the backing of the venture capital firm a16z, we began looking for solutions in the marketplace to invest in. We found some organizations working to solve pieces of the puzzle—through value-based contracting or rebates—but no comprehensive approach that meaningfully reduced costs and risk across the board and met the needs of key stakeholders.
Some policy experts have called for government intervention to establish a new federal coverage program for this category of therapies. But that kind of expansion in healthcare costs seems exceptionally challenging today given current fiscal realities. And while important programs are being developed for conditions like sickle cell disease, a piecemeal approach will not be able to keep up with new therapies given the pace of scientific innovation and the already existing development pipeline.
Instead, we saw the urgent need for a private sector solution to create a robust and sustainable CGT market. So we decided to build that solution ourselves.
We started by assembling a group of national employers and insurers. Together, we rolled up our sleeves and spent six months analyzing the problem before designing and developing an answer together. Then we turned to manufacturers and providers to learn more about their specific challenges and priorities, too.
The easy part has been convincing stakeholders of the need for a collaborative solution and the great potential for success. That shared enthusiasm has motivated our sense of purpose and accelerated our progress. The hard part is creating a new market in a fragmented industry where incentives and time horizons are misaligned.
A Collaborative Solution that Benefits All
The model we developed addresses the financial realities that each stakeholder faces.
For purchasers and insurers, we charge a set premium that creates one large risk pool. We carve out their risk by taking full responsibility for paying those claims and associated medical care.
This caps their risk at the level of that premium and eliminates the possibility of volatile, unpredictable costs. We take a small percentage from that risk pool to cover expenses and use the rest to pay for claims. If we don’t use the total by the end of the year, we return the unspent funds to the contributors.
This pool, however, makes it easier to contract with providers. To improve outcomes and reduce costs, we select the best providers and establish favorable reimbursement levels with set contracts. This relieves administrative burden, ensures quality of care, and reduces the unit cost for delivery. In return, we pay those upfront CGT costs and direct a higher volume of patients to those centers of excellence.
Finally, we contract directly with manufacturers for volume-based discounts. We include performance guarantees in those arrangements to ensure quality outcomes. We monitor patients long-term, even if they switch employers or insurers, and claw back payment if expected outcomes aren’t achieved.
This monitoring also contributes to clinical efficacy. CGTs are typically approved with small trials and short observation windows. By collecting data on their durability and real-world effectiveness, we’re helping to improve outcomes and direct CGTs to patients who will benefit the most.
A Call to Join Our Cause
We launched Aradigm as a public benefit corporation to support our mission-driven approach and to bring providers, manufacturers, payers, and purchasers around the same goal: creating sustainable and affordable access to transformative treatments.
Our transparent pass-through business model aligns the interests of stakeholders to solve the fundamental problems of our fragmented healthcare system. Through that model, we create:
A broader risk pool and deeper understanding of patient needs that enables purchasers and payers to share costs, reduce financial volatility, and cover transformative therapies for those who would benefit the most
Longitudinal tracking, performance guarantees, and aligned incentives that improve clinical efficacy and reduce financial risk
Quality networks and standard contracting that eliminates upfront costs for providers, reduces administrative burdens, and enhances patient experience and outcomes
Together, we’re managing risk and aligning incentives in a disruptive new way to make this emerging healthcare ecosystem sustainable and vibrant. By addressing complex challenges head-on and engaging all key stakeholders, we are unlocking the full potential of breakthrough cell and gene therapies and laying the foundation for a system that prioritizes cures over chronic care management.
The stakes are high, but the potential to transform the lives of people suffering from once incurable diseases while reducing long-term health care costs is a mission we are dedicated to achieve.
