@jwoody1000. Fair question which I would answer from a number of different perspectives.
Firstly, unlike many gene therapies such as Elevidys which successfully made a one off charge for treatment benefit of $3.2m which accrues upwards of 30 years for conditions such as sickle cell disease, much of immediate cost savings using Ryoncil occur within 12 months ..particularly for paediatric ..and to a greater degree severe grades.
I understand that consultants Purple Squirrel utilised an approach used by ICER in calculating existing hospitalisation costs combined with QALYs and adverse events deductions, which helps guide the response of many insurance companies to reimbursement decisions. The irony is that Purple Squirrel used data for hospital claims analysis which is now almost a decade out of date and so we could probably justify an even higher charging structure. Meanwhile Elevidys ignored ICER numbers and charged a 50% premium to the calculated savings (see link below) ! Unbelievable. Their competitor Casgevy (Vertex) which used CRISPR technology pitched in at a $2.2m price point and stole significant market share.
The fact that nine major insurers have already agreed coverage for Ryoncil without any known discounting against wholesale pricing augurs well because they by and large use the same methodology in justifying coverage decisions. The remaining insurance companies should employ very similar decision making tools. I take great comfort in the fact that, despite fears of “outcome based” charging structures , nearly all recent gene therapies have been successful with getting paid on numbers at the very top end of ICER calculations. It is worth pointing out that many insurance companies reject initial claims with a new therapy whilst they undertake a detailed review…but they all seem to cough up. If the FDA has approved the therapy and an off label alternative is used in preference , the prescribing physician is open to malpractice suits. I can assure you this is not something which is ignored.
The fact that Mesoblast is applying in April for the very important Medicaid coverage (est 40% of total patients) might be a sign that they have been able to achieve good net (after discount) pricing . Medicaid will use all existing pricing data and ICER calculations to calculate the relevant best commercial price to further apply its statutory 17% paediatric discount (23% for adult patients) . That process will take time, but I believe that, as a first in class therapy, these decisions will have to be fast tracked. Even where there is no current insurance coverage in place , an urgent request generated by an existing policy holder will prompt an insurer to review.
To answer your question specifically, I would anticipate over 50% insurance coverage over the next 3 months. Some of that coverage will come courtesy of PBM agreements where three major players dominate. PBMs will purchase Ryoncil in advance and take a small cut from both sides for providing the service to hospitals .
As you would expect from a system that is very fragmented , with many states falling outside standard coverage agreements, some insurers may not process, or list our therapy, until there is an actual need to take action. OP
Please do not rely on the facts or opinions contained in the above post when making an investment decision.
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