The CGT Ecosystem Explained, Part 2
Why CGTs Present Delivery Challenges and Financial Risk for Providers
New cell and gene therapies (CGTs) can change lives. But their astronomical costs make access a massive challenge in our fragmented healthcare system. Our three-part series on the CGT Ecosystem explains how Aradigm is working with stakeholders to overcome the barriers impeding access to these astounding breakthrough treatments.
The CGT Landscape for Providers
Today, a growing number of patients are candidates for a rapidly expanding list of life-changing, life-saving cell and gene therapies (CGTs). The emergence of these therapies, including CAR T, has transformed the treatment of diseases once thought incurable.
To date, the Food and Drug Administration (FDA) has approved more than 40 cell and gene therapies with more than 4,000 other treatments in development pipelines. In some cases, a single dose may be sufficient to cure a rare condition.
Clinicians hope these treatments will become increasingly available in the next few years. But daunting non-clinical barriers to treatment stand in the way—including astronomical treatments costs which can range from $1 to $4 million per patient.
We launched Aradigm as a public benefit corporation because we saw the urgent need for a private sector solution to create a robust and sustainable CGT market. Our approach will enable providers to offer these treatments safely and predictably without devastating financial risks.
Aradigm’s Answer
We started by assembling a group of large employers, insurers, providers, and manufacturers to learn about their specific challenges and priorities related to covering, reimbursing, producing, and administering CGT. Then we designed a comprehensive solution that addresses the financial realities and risks each stakeholder faces.
We charge employers and insurers a set premium to create one large risk pool. We carve out their risk by taking full responsibility for paying claims and associated medical care to eliminate volatile, unpredictable costs. We take a small percentage of that risk pool to cover expenses and use the rest to pay claims. If we don’t use the total amount by the end of the year, we return the unspent funds.
This pool makes it possible to contract with providers and enable them to administer CGTs to the patients who need them. But providers face their own challenges in the current CGT landscape. Specifically:
Reimbursement uncertainty
Because of the high cost of CGTs, reimbursement is typically set through a Single Case Agreement—a specialized one-time arrangement between payer and provider. That reimbursement rate is unpredictable, variable, and must be negotiated for each patient the provider treats, adding to their financial risk.
Timing uncertainty
CGTs have extremely high upfront costs. Providers are at risk of carrying millions of dollars on their books until reimbursement, with wait-times that can reach 200 days. To mitigate these cash flow problems, providers often offer treatments serially, limiting their delivery capacity and adding even more administrative complexity.
Patient volume uncertainty
The conditions that CGTs treat are so rare that providers can’t easily predict how many patients they’ll see. And the travel and accommodation costs that patients may incur if they don’t live nearby can make it less likely they’ll be able to seek treatment.
We’ve developed our model to solve each of those barriers.
Work With Us to Expand Access to These Transformative Treatments
Healthcare leaders have been wary about standing up CGT programs because of the risks and uncertainties involved. Our mission at Aradigm is to make these programs simpler to develop and operate and safe for investment.
We focus on partnering with academic medical centers and community providers because both groups are well-positioned to deliver breakthrough CGT and CAR T-cell therapies.
We cover treatment costs upfront with a fixed, pre-negotiated, provider-friendly reimbursement rate and eliminate the uncertainty and delay of prior authorization.
We help establish our provider partners as centers of excellence and direct patients to them, knowing in advance the size of the potential pool that employers and insurers have under coverage. This allows providers to plan with more certainty. We also cover travel and other expenses for patients, making treatment affordable for a diverse population, and help relieve the navigation and financial support burdens providers would otherwise need to take on.
Delivering CGTs is easier and safer when patient volume is predictable and aggregated in one place. When our provider partners know how many patients they are likely to see, how much they will be reimbursed, and how they can reliably source supply and get authorization for treatment, they’re able to make smart, calculated investments into specific therapy programs with all the infrastructure, training, and resources required.
The more streamlined those processes become, the more we can reduce waste in the system, improve the certainty of outcomes and experience, and broaden access. In turn, our provider partners will be able to enhance their expertise, reputation, and profitability in a rapidly developing and critically important area of growing demand. Over time, we’ll also increasingly share clinical learnings, metrics, and best practices to continually push higher standards of quality and efficacy.
We can’t let the logistical, economic, and infrastructure challenges of our healthcare system impede these advanced clinical breakthroughs. By innovating on the delivery and financial side of CGTs, we have an opportunity to turn hope for medical miracles into a practical reality across an ever-expanding range of conditions.
We hope that you’ll join us in this effort. Let’s start that conversation now.
