This summary of the discussion includes insights for overcoming the challenges of affordability and navigating APAC healthcare systems, especially in resource-constrained markets. We also hear why public-private partnerships and policy-shaping are key in building a future with optimal access to transformative cell and gene therapies in the region.

 

 

 

Cell and gene therapies (CGTs) are therapies that involve the modification of genetic information in living cells. The transformative premise behind CGTs is that they offer a cure, and if not, at the very least a dramatic change in the trajectory of the underlying disease. CGTs derive their value from this fundamental change in health outcomes that they promise.

But with this change in outcomes, they also present a fundamental change in delivery. Traditional pharmaceuticals come in a “box” and are manufactured, distributed, and stored until utilized. However, CGTs are individualized, and behind them lies a complex and costly manufacturing process—which, for example in the case of cell therapies, requires harvesting cells, shipping patient samples to and from the manufacturing center, precise genetic manipulation of the cells—employing an elaborate supply chain running across the full breadth of healthcare systems.

 

 

Affordability challenges

Jeff: When we think about the access barriers facing CGTs, the first point will usually relate to the cost. How do the unique value characteristics of CGTs pose challenges in terms of funding compared with more traditional drug models?

Jose Manuel: A good way to think about the overall cost associated with a CGT is by dividing it into two components. One component is formed by the acquisition cost, and the other component involves the delivery costs. Acquisition costs are usually what the manufacturer charges upfront, and includes the manufacturing cost and the logistics involved. Delivery costs are ones associated with the healthcare system’s adoption of the CGT, which can include hospitalization requirements, infrastructure, training, and additional staff.

This presents three key access barriers in the context of funding a CGT:

1. Affording the acquisition cost

The fact that CGTs are individualized—at least for therapies launched so far, which are autologous in nature—intrinsically means a higher cost of manufacturing plus complex logistics, and thus a high acquisition cost. These tend to be upfront and concentrated into a one-off payment, so it is a challenge for payers’ yearly budgets when the benefit to the health system is spread across many years. It is particularly burdensome for smaller payers that cannot spread the acquisition cost across a large population.

2. Developing the evidence in the mid/long term

The promise of CGTs is as a cure, or a dramatic shift in the trajectory of the disease, but usually this is not proven upon regulatory approval. As time is needed to prove value, payers may require the development of real-world data and continuous reassessments to validate the realization of the promise.

Payers have, however, found ways around this, and the result is that CGTs are, for the most part, reimbursed wherever they are launched.

3. Affording the delivery costs

Logistics can be challenging: patients are far from the treatment center and the treatment center is, in turn, far from the lab where the CGT is manufactured. This adds to the total cost, impacting both the acquisition and the delivery cost. Manufacturers have to set up complex logistics, shipping protocols, chains of custody, quality control, and back-up plans.

Hospitals also become a more integrated part of the CGT supply chain, and this involves additional costs or significant cost reallocation within the hospital. The hospital may require additional infrastructure such as equipment, beds, suites, specific training, or additional staff. Patients may also need to be hospitalized or at least monitored for a long time and this adds to the total cost.

Hence, the adoption of CGTs in APAC requires the re-organization of the healthcare system (as it does everywhere else); every part of the healthcare ecosystem needs some re-thinking. And this is by no means an easy task!

 

 

Jeff: Let us talk about how payer systems have addressed CGT value and financing. What did or didn’t work in the US and Europe from a value assessment perspective? What are the major learnings for APAC?

Jose Manuel: We are in 2024, so payers in the US and Europe have been experimenting for years on how to maximize or optimize funding and access of CGTs, and the reimbursement landscape is, in general, positive. This did not happen overnight: it required payers to realize the assessment tools at hand were not applicable. It also required activism from manufacturers, academics, and patient groups.

Payers have tried several tools, such as payment for outcomes, or funding from different sources to satisfy the total cost of the CGT intervention (that is, the acquisition cost plus the delivery costs). The Centers for Medicare and Medicaid in the US are now experimenting with a new funding mechanism following the recent approval of the gene therapies for sickle cell disease.

Payers are generally on board, but more policy work is needed because this involves the entire healthcare system, not only the “drug budget” holder. Even if you have full coverage or reimbursement, and even if payers provide adequate reimbursement using innovative tools or payment options, access barriers will remain. These system barriers are, for instance, logistics or patient referral or capacity within the hospitals to adopt CGTs.

 

Jeff: What value frameworks and policies are needed to enable adoption and access to CGTs in APAC? How can we enable governments to look beyond a budget impact approach?

Jose Manuel: The budget impact approach is limited because it will not capture the benefit of CGTs in the long term. The budget impact will, at best, look 3 years ahead and this is insufficient for a transformative therapy; Granted that this tool is needed when payers manage yearly budgets, but then the true impact of CGTs is not well characterized with budget impact alone.

Cost-effectiveness will illustrate value for money, but the approach is limited in regard to CGTs. In general, cost-effectiveness calculations center around the acquisition cost of the therapy. If the calculations fail to capture some of the broader impact of CGTs, such as the infrastructure and training needs within the hospital, or the reallocation of costs within the healthcare system, then cost-effectiveness is portraying a partial picture only. A full mapping out of the delivery cost is needed for cost-effectiveness calculations.

In reality, time is needed to characterize the true impact and value of CGTs due to the uncertainty for the healthcare system that still exists at launch, both on the clinical and economic sides. In any case, the totality of clinical and economic data needs to be assessed. In terms of clinical evidence, it must go beyond the initial clinical trial dataset. Real-world data and continuous reassessment are required to validate the “promise” of CGTs. On the economic impact side, you must include both the acquisition and delivery components.

On the acquisition cost specifically, payers have tried—and continue to try—innovative payment models, such as payment by instalments, or outcomes-based schemes. But it is important to keep in mind that CGTs cannot be evaluated like a conventional pharmaceutical intervention; and this is especially important depending on where the CGTs are in the commercialization cycle. For example, it could be argued in the case of cell therapies for lymphomathat the data are clear and the evidence is robust, as these have been in the global market for more than 5 years now. So, the payer assessments of these cell therapies today should focus less on the evidence, with more focus on the negotiation of the financial aspects. For other emerging CGTs such as cell therapy in autoimmune diseases, when and if they are approved, the proof of evidence is still necessary: data generation requirements will need to be tied to the financial considerations.

 

  

Jeff: Beyond value assessment, how have payers in the US and Europe structured payments for CGTs given the single use/lifetime value proposition, and what are the learnings for APAC payers?

Jose Manuel: Payments in the US and Europe have remained concentrated, that is, upfront and one-off. In some cases, there may be rebates, depending on the performance of the CGT, particularly when the evidence is incomplete, and outcomes-based agreements have been used.

In the APAC context, the initial, fully concentrated payment may create cash flow issues for some payers, particularly smaller payers including insurers with a small population or number of lives covered, but for the most part, payment continues to be upfront and one-off.

Jeff: Are local or regional partnerships (e.g., with the government, private health insurance, non-government organizations) worth exploring to increase access to CGTs? What would such a partnership look like?

Jose Manuel: We have seen that CGTs are transformative, costly, and have a sizeable impact on the configuration of the healthcare system. I think public-private partnerships are the way to go to propel the adoption of CGTs. Adoption of CGTs cannot be the sole responsibility of the manufacturer. The public sector alone cannot be expected to do it either, it needs the innovation and the investment from manufacturers. The healthcare systems—the hospitals, the academic institutions—that form a critical part of the CGT supply chain must participate.

Access for CGTs in APAC needs the full ecosystem and that’s where partnerships make sense. There are some great examples of evolving global partnerships that can serve as a guide for the region.

In the UK, Catapult is bringing together the different components—innovators, funding sources, academics, hospitals—to map out the system requirements and implement CGTs. In Spain, CataloniaBio Health & Tech is doing remarkable work, for instance in the Hospital Clinic in Barcelona. Even non-profit organizations such as Caring Cross in the US with a global outlook to expand access to CGTs deserve a seat at the table as they bring together the different actors—public and private.

Korea has a thriving CGT clinical trial and manufacturing capability including Contract development and manufacturing organizations (CDMOs). Japan has local and foreign innovators that are working together through a trade association, FIRM, to propose policy changes. Singapore has the academic centers, capacity to manufacture, and is also developing regional treatment centers.

• These partnerships have been established not just at a national, but also at the regional level. The benefit of a partnership is in the pooling of resources to make an innovation successful together; there is the acknowledgment that the science is here, and that implementation is complex. Singapore has demonstrated it can do it with the ASEAN (Association of Southeast Asian Nations) region. There is already a publication describing the role of Singapore as the hub in a hub-and-spoke system for cell therapy specifically, with patients traveling from all over Southeast Asia and even beyond to receive the treatment. Patients in the APAC region will benefit, the Singapore economy will It is possibly costly and limited in the long run, but interesting as a first step—for transformative intervention like CGTs, systems must innovate and adapt.

 

  

Jeff: How do you see the emergence of local CGT products (especially in China and India) impacting the pricing and market penetration of global CGT products?

Jose Manuel: Manufacturers in India have been very innovative, in particular because of the development and approval of the first locally produced chimeric antigen receptor T-cell therapy (CAR-T), being commercialized at a fraction of the cost in developed countries. This was done by leveraging global data and building on global scientific learnings, and the Indian regulator approved it. India is providing a template for low- and middle-income countries and this development deserves attention and praise.

China is very active in the development and commercialization of CGTs. In fact, a CAR-T developed in China is being successfully commercialized in the US and Europe, and cell therapy uptake in China itself has been impressive.

Just to be clear, in terms of cell therapy specifically, China requires that cells be manufactured and infused within China, there’s no export or import market. China’s national reimbursement system (the NRDL) is currently not yet suited for the assessment of CGTs, but it will adapt as more of these therapies come to the market.

 

Jeff: What can global manufacturers do to help address affordability challenges in this context?

Jose Manuel: From the outset, there must be acknowledgement of both the acquisition and the delivery costs for the CGT. Existing value tools do a good job justifying the acquisition cost. For the APAC region, the delivery cost and the value for the overall healthcare system are not fully illustrated yet. And it is important that healthcare systems understand the long-term health outcomes and economic benefits of adopting CGTs.

Manufacturers can help with this: mapping out the delivery costs; description of potential cost reallocation or adjustments within the healthcare systems; illustration of additional infrastructure needs, more training, additional staff. And costing it all out. Manufacturers should also describe the need for the establishment of formal referral networks for patients.

This is where manufacturers should engage with policymakers in the region. Policymakers are charged with making CGTs accessible to their population, working with global or local manufacturers or local academic institutions. Willingness to provide access is the first step—which makes policy work paramount.

 

 

Healthcare systems challenges

Jeff: Globally, the uptake of CGTs has not always met expectations so far—even in markets where funding has been available, and notably in the US. We have touched on the delivery costs for the hospitals and healthcare systems from an affordability perspective. Let us now look at the barriers raised by the healthcare systems themselves.

What are the critical factors for a healthcare system to successfully deploy CGTs and how can they be addressed?

Jose Manuel: Hospitals need to accommodate the needs of the specific CGT, and this includes infrastructure such as equipment or special suites, capacity, staff, training, and general preparedness. Furthermore, hospital resourcing can become easily overwhelmed when dealing with different CGTs at the same time, or with multiple manufacturers requiring specific adaptions at the same time.

And for now, the target population for CGTs in APAC has been relatively small, like with late -line oncology or hemophilia. But at some point, innovation will extend to larger populations. Healthcare systems should be proactive in adapting to and funding CGTs. Some coordination at the policy level will help, for instance, to designate and fund where CGTs should be administered and get the ecosystem ready. This should be not left to manufacturers to do.

 

Jeff: How can the necessary clinical systems such as trained specialists and referral pathways be addressed in APAC, considering the need for adaptation and allocation of resources within hospitals? 

Jose Manuel: Referral pathways are crucial: while patients are everywhere, treatment centers tend to be in big cities with prominent academic hospitals. Therefore, patients must be referred from where they are.

Some healthcare systems are better positioned to establish referral networks. Systems that are more centralized, or where care coordination is more efficient, will do better. This is where the US struggles, as it is a geographically large country with a fragmented healthcare system. Some places, like Japan, South Korea, or Singapore, should be able to deploy CGTs in a much more efficient way. If they have not done it, it’s because there is still a lack of understanding of the full economic impact of the CGT adoption that includes the delivery cost, or because a well-established referral network may not exist or is not yet formalized.

For a referral network to refer patients to the right place, physicians, payers, and patients need to be educated on CGTs, the value and benefits, and the requirements in terms of cost and logistics. APAC ecosystems are only at the very beginning of this education process. The necessary increase in awareness will not happen automatically—it needs to be driven by policy.

  

Jeff: To what extent does having an integrated national healthcare system contribute to the successful introduction and adoption of CGT technologies, as seen in the European context?

Jose Manuel: Markets with integrated national healthcare systems are better positioned to adopt CGTs successfully; for example, the EU, Japan, South Korea, Taiwan, or Australia. But even in these markets, manufacturers need to collaborate with public (and private) payers (if applicable) on the required policy work by also involving hospitals and academics and patient groups. The system needs to be adapted. This includes: (1) adequate reimbursement, with proper tools for value assessment; (2) infrastructure needs, including capacity; (3) training and additional staff if needed; and (4) referral networks.

In markets where the healthcare system is more fragmented, like the US, this collaborative effort is more difficult to achieve or streamline. The US is very much ahead in the development and approval of CGTs—it is the place to go for funding of the science, the place where most innovation occurs, but the US struggles with implementation. Universal healthcare systems have proven to be better positioned to adopt CGTs in a more concerted way.

 

 

Jeff: A unique feature of the CGT market has been the emergence of so-called Point of Care (POC) treatments produced and delivered by the hospitals themselves. How can biopharma companies navigate the challenge of potentially competing for limited provider capacity against POC CGTs?

Jose Manuel: POC alludes to cell therapies locally developed at the hospital for use at the same hospital, usually an academic center. POCs avoid some of the logistics and associated costs. POCs are a great value proposition, if they work.

In developed markets, there is a regulatory requirement to demonstrate the efficacy and safety of POC interventions if they are to be scaled up, so the adoption is possibly limited due to the need to run clinical studies for large-scale adoption. Still, there are private companies, such as Galapagos, that are attempting to go to market with this model.

POC may present a great opportunity for middle-income markets, which are unable to afford currently commercialized CGTs, for example India, Indonesia, Philippines, Thailand, or even markets in Latin America or Africa. Policymakers will need to decide whether this is an option for patients in their country—but there is no denying the opportunity it presents.

The goal is to extend the benefit of CGTs to every eligible patient who needs it, independently of where the patient lives. The science has delivered and will continue to deliver, but there is an ecosystem issue that can be resolved through collaboration. And the opportunity to collaborate is not only for manufacturers and start-ups, but also for policymakers, academics, and academic institutions everywhere to enable this goal.

 

 

Future thinking

Jeff: Some of the challenges we have discussed will soon be expanded further as CGTs come to market in disease areas such as immunology that have larger populations than the current focus in areas such as hematological malignancies. Should national governments be developing policy strategies for CGTs to address issues in funding, treatment pathways, infrastructure capacity, and regulatory pathways in a more holistic way to ensure patient access?

Jose Manuel: To successfully commercialize CGTs, an array of “solutions” must be considered to ensure that: (1) adequate, comprehensive reimbursement, with proper tools for value assessment; (2) infrastructure needs, including capacity; (3) training and additional staff if needed, and (4) referral networks, are in place. These are challenges that pertain to the overall healthcare system.

Policy work is needed in a concerted and connected way: all parties—global manufacturers, hospitals, academics, Ministries of Health, Finance and Industrial Policy, and others involved—must be willing to come to the table for a transparent and collaborative discussion.

For a transformative intervention such as CGTs, systems must also innovate on how to adapt. Some of the solutions to consider could include:

• National CGT manufacturing or processing centers available for use by multiple companies: Suitable for large countries with some technological transfer capability, such as India (or Brazil if we are talking about Latin America).
• Development of local CGTs by leveraging global data: Countries such as Malaysia or Thailand and even some countries in Latin America could follow this model if the research and development (R&D) capabilities are in place. The technology is known and reproducible, and academics in places such as Korea or Singapore or Malaysia have the experience to support this solution. Brazil is already doing this with the collaboration between a local foundation, Fiocruz, the Brazilian Ministry of Health, and Caring Cross, the US non-profit organization.
• Collaborate in the development of regional treatment centers (e.g., Singapore for ASEAN): As already mentioned above, Singapore has demonstrated that this model is feasible, with a hub-and-spoke system for cell therapy using Singapore as the hub, and patients traveling from all over Southeast Asia and even beyond to receive the treatment. This option is costly, and may have limited applications in the long run, but it is doable as a first step! Patients in the region will benefit, the Singapore economy will benefit.

 

Jeff: To wrap up, what more can manufacturers be doing—what are the key takeaways for our industry colleagues?

Jose Manuel: Looking to the future of access to CGTs in APAC, these three considerations present a way forward:

1. Engage with governments at both policy and payer level

This engagement needs to be both at a policy and at the payer level to help shape a policy environment where patients can get access. With payers, there is an absolute need to continue discussing issues around innovative financing or outcomes-based agreements, value for money, acquisition cost vs delivery cost, and more. However, the preparedness of the healthcare system for adoption of CGTs is a distinct policy issue that needs work.

2. Explore public-private partnerships

No single stakeholder can help enable CGT access alone. Partnerships empowered by multiple stakeholders, including manufacturers, academic institutions, hospital networks, and patients, will be needed to help address capacity or financing constraints.

3. Redesign business models around CGTs as procedures rather than as therapies
While there are market-specific variations on how CGTs have been adopted thus far, it is clear that the challenges are not just a “reimbursement” or “coverage” issue. CGTs are transformative therapies that have a broad impact on the healthcare system. Therefore, some system and business model redesign is needed going forward.

CGTs represent a significant step forward in potential benefits to patients yet present systemic challenges in financing and healthcare system capacity.

A one-size-fits-all approach will not work across APAC markets because value determination frameworks are diverse, with mature markets and emerging markets in APAC having differing priorities. Fostering strategic collaborations within local ecosystems, as well as awareness and policy-shaping efforts, are needed to enable optimal CGT access.

 

 

About Jose Manuel Garnica, Independent Thought–Leader

An independent thought-leader within Market Access, Pricing, and Health Economics, Jose Manuel has expertise in early asset development and launch, strategic evidence generation planning, and achieving access for CGTs. Jose Manuel’s roles in industry have led him to directly work in several key markets worldwide including the US, Canada, Europe, the Asia-Pacific region (APAC), the Middle East, and Latin America. He has held senior positions in Bristol Myers Squibb, Pfizer, Roche, and Amgen, and most recently spearheaded APAC market access for Kite, a leading global biotech in the cell therapy space. Jose Manuel holds a PhD from Imperial College London and an MBA from London Business School. He is currently also a Guest Lecturer at the University of Southern California in Los Angeles.

 

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