The Science, Policy, and Potential of Cell and Gene Therapies

(This is an unedited transcript. For accurate quotes and presentations, please refer to the full-event video.)

SARAH DASH:  All right, good afternoon everybody.  Can everybody hear me?  Thank you so much for joining us today for the final event of the Alliance for Health Policy’s 2019 Solving For Health Signature Series, about navigating the frontiers of innovation and value.  I’m Sarah Dash and I’m President and CEO of the Alliance and very pleased to be joined by two Alliance board members today.  John Rother and [name], thank you for joining us today.


The Alliance is a non-partisan organization dedicated to advancing knowledge and understanding of health policy.  Our Signature Series began almost six months ago with a thought leader discussion that brought together policy experts, providers, advocates, and industry leaders, to reflect on what is most exciting, ground breaking, and challenging for healthcare innovation and value transformation.  Last month we hosted a summit.  Based on what we learned from that discussion, the summit featured sessions about the value of the patient voice, addressing biases and blind spots in the quest for innovation, the intersection of innovation and value, and future policy considerations.


Today’s briefing will explore the science policy and potential of cell and gene therapies.  And I can think of nothing more pertinent to our series on innovation and value than the exciting opportunities and challenges posed by the emergence of these therapies.  In some ways this briefing comes full circle for me as a science student 20 years ago.  We were only beginning to talk about some of the therapies that are on the horizon today, and today we have not just nationally, but really internationally recognized experts who are going to help us better understand the interdependence of these therapies not just on the innovator, science, manufacturers, but also the doctors and nurses who administer the therapies, the hospitals, the payment, and payer systems and there’s probably no other issue in front of us today that really puts quite as fine a point on these — the intersectionality of our healthcare system than we’re about to talk about today.


So in line with our mission to present a 360 degree view of today’s health policy issues, the Alliance is proud for this series to be supported by organizations that represent many facets of the healthcare system.  And you have some of them listed in your packet today.  I would particularly like to thank today our visionary sponsor, Pharma, and our innovator sponsors, Anthem and Ascension, along with a multiple of other supporters from across the spectrum.


So before we get started with the panel and I’ll introduce our panelists in a moment, but I would like to invite Jocelyn Ulrich, who’s Deputy Vice President of Policy and Research at Pharma, to make a few opening remarks.  Thanks, Jocelyn.


JOCELYN ULRICH:  Thank you, Sarah.  And thank you to the Alliance for having me today.


So cell and gene therapies are at the forefront of today’s cutting edge technology and they are truly amazing.  We’re talking about therapies that help our own bodies fight the actual root causes of a disease at the cellular and genetic level.  This is the first time in human history that we’ve been able to do that.  We hear stories about the lives that patients and caregivers can lead because of these new types of treatments, the potential for cures, the potential to give someone their sight back.  This type of innovation can be a game changer for so many patients and their families, and we are just at the beginning of it.  Currently, there are four approved cell and gene therapy products that treat five diseases and nearly 300 additional therapies in development.  These new therapies have the potential to cure previously incurable diseases and to fundamentally alter the trajectory of many other life-threatening conditions.


Take for example, sickle cell disease.  Approximately one hundred thousand Americans have this life-threatening condition that can lead to stroke, difficulty breathing, pulmonary hypertension, and other organ damage.  Today, scientists are exploring new ways to use established medicines and cutting edge technologies such as RNA interference, gene edited stem cell therapy, and gene therapy, to treat this disease.  On therapy currently under development could potentially be a one-time treatment for sickle cell disease.  And this is just one of the nearly 20 sickle cell disease therapies in development, or in FTA review.


The manufacturing process for cell and gene therapies is uniquely complex and defines the product.  Because of this, biopharmaceutical companies are exploring existing and new technologies to more effectively and cost-effectively develop and manufacture these therapies.  And are investing in cutting-edge manufacturing sites to ensure high standards and quality.  Cell and gene therapies truly reflect the [inaudible — mic is cutting out] scientific advances.  But in many ways, our current healthcare system is not structured to handle them.  Many of these therapies need to be delivered as early as possible to patients to provide maximum clinical benefit, which can be complicated by prior authorization policies.  Insurance plans are struggling to estimate exactly how many patients may need these therapies in a given year.  And current policy proposals such as the Lower Drug Cost Now Act of 2019, also known as HR3, could lead to 56 fewer new medicines coming to market over ten years, according to a recent analysis.  HR3 would have an especially large impact on small emerging biotech firms that rely on venture capital and venue streams from the rest of the industry to finance their R&D investments, and it would most impact areas where the science is toughest such as in Alzheimer’s, ALS and other diseases that could potentially be cured by cell and gene therapies.  Just as our regulatory system is evolving to advance the opportunities offered by these therapies, our payment and coverage system needs to evolve to reflect the value of 21st century science.

We need to evolve our healthcare system to one that values treatments based on patient outcomes.  To achieve this, biopharmaceutical companies are increasingly exploring innovative contracting arrangements in which payment and reimbursement for new treatments is tied more closely to health outcomes.  And research is showing that these types of contracts can reduce health system and out-of-pocket costs and improve patient access and health outcomes at the same time.  And just as there won’t be a one-size-fits-all gene and cell therapies, there’s not a one-size-fits-all approach to payment.  Policymakers, biopharmaceutical companies, and payers, are exploring a range of creative options that include extended payment plans and annual subscription plans.  Together, we can develop a policy environment that ensures timely patient access, manages short-term affordability, and continues to foster the development of these lifesaving treatments.


I’m excited to hear from today’s panelists about how we can address some of these challenges and look forward to a rich and informative discussion.  Thank you very much.


SARAH DASH:  Thank you, Jocelyn.  All right, well now we get to the fun part, we get to introduce our panelists and get into the weeds on this really important conversation.  You can join on Twitter if you’re interested at the hashtag #allhealthlive.  And please be thinking about questions that you want to ask.  We’ll be coming around to collect them on the green paper that you all have on your tables.


So very pleased now to introduced our panelists and you can find their full bios in your packets.  First, we’ll hear from Gillian Woollett, who is a principle research scientist at Avalere Health, where she leads the FDA practice.  She is a train immunologist and previously held positions at Engle and Novitt Bio and Pharma.  She has her doctorate in Immunology from University of Oxford, and degrees in biochemistry from the University of Cambridge.


Next, we will hear from Dr. Joanne Kurtzberg, who is a faculty member at the Duke University School of Medicine, where she serves as Director of the Marcus Center for Cellular Cures, the Pediatric Blood and Marrow Transplant Program, and the Carolina’s Cord Blood Bank.  She is also the co-director of the Stem Cell Laboratory at Duke.  She’s an internationally renowned expert in pediatric hematology and oncology, pediatric blood and marrow transplantation, umbilical cord blood banking and transplantation and novel applications of cord blood in the emerging fields of cellular therapies and regenerative medicine and she’s going to bring us into what it means to actually translate from the bench to the bedside, if you will.


Next, we’re pleased to welcome John Glasspool.  Mr. Glasspool is a senior advisor to the Massachusetts Institute of Technology Center for Biomedical Innovation, NEWDIGS initiative, and the Financing and Reimbursement of Cures in the U.S. Project, or FoCUS.  He’s also the CEO of Anthos Therapeutics.


And finally, we have with us Dr. Rena Conti, who is the Associate Research Director of Bio Pharma and Public Policy for the Boston University Institute for Health System Innovation and Policy.  She also an Associate Professor at the Boston University Questrom School of Business.  Dr. Conti is a health economist whose research focuses on the organization, financing, and regulation of medical care and she has written extensively on the pricing demand and supply of prescription drugs.


And I really want to thank our friends from Boston for making it down following a snowstorm particularly.  So with that being said, very pleased now to turn the conversation over to Gillian Woollett.


GILLIAN WOOLLETT:   Delighted to be here.  Most of  you all know Avalere for reimbursement commercialization.  We also do have a practice with a bunch of molecular biologists and immunologists and PhD types that have approached the different form of evidence in the sense of what FDA generally is looking for.  But for the purposes of this discussion, I’m going to go very broad, very general.


Some of you will appreciate Colman’s mustard.  It’s that lethally hot stuff and you always put a really big splodge on the plate, but you don’t eat it.  And they always argue that Colman’s made their money by the mustard left on the plate.  Everybody had the mustard available, but the point being that just as with some medicines you have a lot of people treated that leverage the cost, but their response may be different.  Our ability to focus who gets a treatment in the first place as our colleague from Pharma introduced, is critically important, but obviously it changes the economics.  So the traditional return on investment for a small molecule drug, if you’re treating for blood pressure, what I tend to call, unfortunately, the popular diseases, you have a broader return on investment available to you.  Biologics were already breaking this model with the specificity of monoclonal antibodies where you had a tighter diagnosis perhaps of the disease, and then cell and gene therapy, which has been a dream for years, ever since we knew the structure of DNA in ’52.  Cell and gene therapy are really focusing on treating the right person at the right time.  So if we look at the complexity, we have the small molecule drugs, obviously, small.  We have the biologics, which can be quite big, that Y shape, your traditional monoclonal antibody, and then soup, as I call it, which characteristically was not well defined.  Goes back to 1796 and the small pox vaccine, but now may include some of these cells, and they may be living entities in and of themselves, which is then a supply chain issue.


So yes, complexity is a challenge, but the specificity ultimately determines the economics and historically, and still, much many of us have high blood pressure, but historically most therapies target a disease rather than a person.  And the great news is, we’re getting to the point we can target the person.  Obviously, biologics are an increasing part of the U.S. pipeline and the reason I flag this one is you look at the number in the pipeline and the number of approvals and we’ve got a ratio of about 100 to 1. It’s about a century to approve at FDA what’s already in the pipeline.  So maybe we’re putting some things into people too soon, or maybe we need to look at our regulatory model, but either way, I think that ratio needs to change.  But the expansion of these specialty meds continues to increase.  That’s good; the promise is there.  But it’s going to add to the visibility of the cost in cell and gene therapy even more so.  We’ve already, even without the specificity, the acute, astute specificity, got a move from (indiscernible) to smaller populations that get benefit from each drug.  And this means collectively there’s an issue on our pipeline, and we’ve got competition coming with biosimilars for biologics, but it’s being very slow and then here was an observation made by Scott Gottleib as commissioner that — to the individual patient, of course, the improvements are profound, but as measured in GDP, everybody knows the ratio of spending in unsustainable.  So this choices to who gets treated becomes critical.  And the R&D per product is unchanged, but there’s fewer able to benefit.  So the access is an exquisitely important question.


Here we’ve got a rough summary of how the cell therapies may be autologous, they may be self-cells or in my case, I can borrow from my identical twin, but most of you don’t have one.  You have to donate your own cells to yourself to be altered in some way, given back to you, and then we have the (indiscernible) which is donor essentially in the same manner that you have for tissue transplants.  And you get a certain scale up after the manipulation and then administration to the patients.  Now, what’s important here is of course the setting of care is a very complicated situation too.  This is not a pill that you can just take.  This is the aspect of available, suitable appropriate settings for care, is massively important.  And then with the gene therapies, you have the viral vectors that again, gives the corrected gene to the patient and you hope to restore function.  As a regulatory measure, sponsors choose the pathways, but we have two statutes that govern FDA’s authority and then it’s a biologics license application under the Public Health Service Act, as to how these products get approved and this is through the Center for Biologics Evaluation and Research at FDA.  This is the center that also deals with blood, blood products, and historically dealt with the recombinant products, but those are now the center of drugs.  And philosophically this is important in how both as a statutory authority and also how the people available for review approach the approval of these products.  It is not a trivial exercise and it takes a lot of expertise and a lot of working together between the sponsor and the agency to enable a product to be marketed and everything about a drug becomes a hundred-fold for a biologic and becomes a thousand-fold for cell and gene therapy in terms of complexity supply chain and how it gets managed.


Here, as alluded to again, are the four approvals.  We have the two cell therapies at the top and then we have a couple of gene therapies at the bottom.  These are just the beginning, but it’s also evident obviously with the numbers at the bottom of each, that the cost per patient can be quite significant.


Then at FDA there’s the regenerative medicine advanced therapy, better easier said as RMAT designation.  It was created in 21st Century Cures Act.  And there’s certain criteria that allows sponsors to engage in the program, but that ends.  These are not alternatives, the drug has certain specific aspects to it.  It’s intended to treat, modify, reverse, or cure serious or life threatening disease or condition.  This is important:  As we get going into gene therapies, it would be — or cell therapies, it’s naïve to say everything is going to be a cure.  Just because in theory, in principle, it can be does not mean that the first generation will be.  There’s a lot of learning to be done collectively, individually.  So apart from some of the antibiotics, I don’t think we’ve ever had the first gen being instantly perfect and being what we need.  So — and then there’s also this need for preliminary clinical evidence showing that it has this potential to address the unmet medical needs.  So there’s a lot of steps before you get into the RMAT program, but it does enable access to a lot more support from the FDA and also the priority review and certain other programs.  I do have a caution here that by making every drug special, we’re leaving out potentially, if we’re not careful, those drugs for popular diseases, but clearly some of these are very high touch and they need the FDA engagement throughout the process.  However, FDA already has 800 active INDs on file for cell and gene therapies and it’s high touch resource intensive for FDA.  So as we look to say, re-upping of the user fees, we can expect some attention on the resources required by the agency to do the review.


They also have at FDA a number of other levers to accelerate review beyond just standard and priority.  Here we’ve indicated fast track breakthrough and RMAT, so for sponsors it’s very, very important to talk to the agency, work out what they may be eligible for, and make the most of these programs.


And then here we have the pipeline of those products that have the expedited designation and the FDA is saying they expect they’ll receive over 200 INDs per year for cell and gene therapy by 2020, that’s next year.  Shocking though that might be.  And approve ten to twenty per year by 2025.  So this is a head’s up as to these economic demands on the system, whichever part of the system you are, as to how we’re going to manage what should be, will be, ultimately phenomenal therapies, even if the first ones aren’t perfect.  So that’s an introduction to cell and gene.


SARAH DASH:  Thanks so much, Gillian.  Joanne?


JOANNE KURTZBERG:  So I’m a pediatric physician and hematologist/oncologist.  I forgot my instructions about the red light.  And I am really speaking from personal experience about cell therapy programs that we are bringing forward in children with brain diseases.


I want to make a few points though.  You’ve heard already that these therapies are — really can be cells, tissues, and genes.  That their potential is enormous to help exciting – with exciting new therapies for unproven applications and unmet medical needs.  They are very unique because as Gillian said, they are not pills.  There’s manufacturing, there’s packaging, there’s distribution.  And everything about them is really different than drugs and I will give you an example.  We have a cell therapy study in orthopedics and knee arthritis and we had to send frozen cells to an orthopedic clinic.  Orthopedic clinics really don’t know how to handle frozen cells.  Don’t have the freezes for frozen cells.  Don’t know how to thaw the frozen cells.  So I mean, just putting all of that in place took a whole lot of training, teaching, buying of new equipment, and different kinds of expertise than is in their typical wheelhouse.  And I think these therapies are going to dramatically change the current healthcare system both in delivery, but there are big gaps in the current workforce, particularly in manufacturing under GMP, that really need to be addressed in our whole educational system.  There’s different techniques for storing the products that are not in the bandwidth of a typical pharmacy.  And administration as I alluded to, requires very different expertise when you’re talking about cells or genes or tissues.


So I work in the Marcus Center for Cellular Cures, which is a translationally focused, scientifically-based center in an academic center.  And we are developing cell-based therapies to treat brain diseases and our goal is to develop the therapies and rapidly translate them from the laboratory to the clinic and to the patient.  To do this, we’re like a mini biotech in an academic center, which is an oxymoron in itself.  But somehow we’ve managed to do that.  And so we have a center that has its own research and development and discovery lab.  A FDA licensed public cord blood bank called the Carolinas Cord Blood Bank, which has 45,000 cord blood units, which were donated by moms to be stored and used for the cell therapy and transplantation.  A DMP cell manufacturing lab, clinical trials group, a regulatory group, administrative group, and a physician group.  And we are using cord blood, cord tissue, and cord blood derived cell products under IND to study indications in babies with birth asphyxia, children with cerebral palsy and autism, adults with acute ischemic stroke, children with leukodystrophies, and adults with osteoarthritis to the knee.  And I don’t have time to go into all of those but I just wanted you to see kind of the scope of what we’re doing and where we’re coming from.


So one of our major focuses is using cord blood cells as therapies and the FDA approval for cord blood is for hematopoietic stem cell transplantation, as a cell that can rescue bone marrow after myeloablative therapy, but that property is covered by a cell in the circle at the top called a blood stem cell, which is about .001 percent of the cells in a bag of cord blood.  Everybody always says cord blood is a bag of stem cells, and it really is not a bag of stem cells.  But it turns out there are a lot of other interesting and potentially therapeutic cells in cord blood, including lymphocytes which people are now developing into third party immunotherapies and the monocytes which are on the bottom, which is what I’m going to concentrate on today.  So cord blood monocytes are different than adult monocytes, so if you take my blood and try to get it to do what cord blood can do, it will not work.  And that’s what the graphs on the bottom of the slideshow on the right, but on the upper three panels, you can see normal brain tissue and culture — this is mouse brain tissue, and in the middle, injured brain tissue.  And then on the right, injured brain tissue that was co-incubated with cord blood monocytes and it’s rescued from what was hypoxic injury.  And we use this kind of data to develop a rational to put in an IND to try cord blood cells in babies with birth asphyxia and adults with acute ischemic stroke and kids with cerebral palsy.  We also grow a cell from cord blood, we call it DuOC, which stands for Duke o cell.  Which is swimming around on that slide, but which is a monocyte derived product we grow in the DMP lab over three weeks in culture and which is capable of re-myelinating brain in a number of experimental systems and that has important applications for treating de-myelinating diseases and also for treating children of leukodystrophies.  And on the bottom panel you can see on the left, that the cell has re-myelinated brain in a mouse that was injured by something called cuprizone and that the myelin is of normal integrity.


So one of the things I’ve concentrated on in my life is treating children of rare leukodystrophies.  When you talk about personalized medicine, these are very rare, but fatal diseases that affect infants and young children and — which we showed about 20 years ago could be affected in a positive way by (indiscernible) stem cell transportation with cord blood.  On the right, you see a little girl who has Krabbe disease.  She had an older sister who died.  She was transplanted with cord blood when she was 19 days old.  And she is a healthy 15 year old.  On the right, you see a little girl who also had a sibling who died who was transplanted at 21 days of age and who is alive and doing pretty well, but has trouble walking.  And you can see in the middle, MRIs that show fiber tracking of their cortical spinal tracks, which are the nerves that go from the brain to the legs and the little girl on the left has normal tracks, and the little girl on the right has an abnormal track and these were done when these kids were two days old.  So what that says is even by two days of age, it’s too late to fix everything in some kids and so we developed a therapy where those DuOK cells are now being given to children with leukodystrophies a month after a transplant in the spinal fluid, to see if it will help rescue the damaged areas of brain more rapidly.  And we’ve treated 27 children and have good safety results, but know that we need to do a trial without transplant to see if there’s efficacy, and we’re planning to do that on adults with MS.


We’ve also studied cord blood not with a transplant, but as an infusion like a smart drug.  So we put the cells in the blood and they do their thing in the body and we’re not 100 percent in control of they do.  But they’re smart enough to know, and this just shows you data from a published study in cerebral palsy where we were able to show that cord blood improved motor function in kids with CP.  That’s in the middle. And on the bottom, where you see pictures of all those brain lines, that shows that cord blood cells improved, or increased motor tracks in the brain, in the children whose motor function improved after the cord blood infusion.  To do those scans, each scan is four terabytes of information.  Each child had two scans.  This is composite of all those kids pre and post, so super computers had to analyze that data.  The children had to go into MRIs for an hour to be studied twice.  So I mean, there’s a lot of complexity just to get the kind of data that might convince the FDA that this is a reasonable therapy to move forward.  So here’s a good example, the little — this little boy who was a responder on treatment and we filmed all the children and had them independently evaluated, but he’s walking with a walker, he has braces, he can’t walk independently at study baseline.  But on the bottom, one year later, you can see that he doesn’t have the walker, he doesn’t need the braces, he can walk independently.  That is more than a child would be able to do in a year with straight CP if they didn’t have an intervention that made a difference.  But it’s — in growing kids who develop anyway, it’s more complex to show a benefit than just saying, oh, he improved in a year.


We also are looking at cord tissue therapies, so this from the umbilical cord itself, not the blood inside.  And we’re able to show in preparation for studies in kids with autism that cord tissue, MSCs, which stands for Mesenchymal stromal cells which can be grown from the cord in six weeks in culture in a GMP lab.  Can calm down inflammation of what are called microglia, which are known to be inflamed in kids with autism.  Autism now affects one in 59 children in the U.S. and it’s increasing in incidents and severity.  The (indiscernible) is in the hundreds of billions and there is no FDA approved therapy to treat the core symptoms of autism.  We published a study where we showed that giving infusions of autologous cord blood to kids with autism improved in the red on the right — decreased symptoms of autism and improved their behavior.  This is open-label phase one, so it has to be studied in a randomized placebo controlled phase two.  But if cord blood can help, then you could say, well this is autologous, how many families actually store their own kids’ cord blood?  And frankly, I work with cord blood and I think if this is going to be a viable therapy, we have to make it work with donor cells, which can be manufactured more easily, more effectively, and maybe better.  So we’ve done this study, it will be published soon.  Testing whether donor cells or the child’s own cells compared to placebo made a difference.  And one thing that we learned is that we need objective end points, not just, unfortunately, a parent saying their child is better.  And so we are looking at one example, which I show here, called eye tracking, which tracks how a child looks at a video, which is different in autistic kids, than in typically developing kids.  But these objective end points are hard to find, hard to validate, expensive to implement, but really important to prove or disprove the therapy.


So because we’re academic and because we have small labs and because we want to help children and because we don’t want the cost to be super high, to do this, 50 percent of the kids we see on Medicaid, we are looking at market sizes and trying to figure out how to optimize and scale up manufacturing.  But for example, if we use cord tissue, and we’re treating kids with CP, we have about 800,000 doses to make.  If we’re treating kids with autism we have 3.5 million doses to make.  Stroke, 6 million.  Osteoarthritis in knee, 30 million.  I have a little lab and one cord tissue can make a thousand doses.  So you — and that takes six weeks.  So you can kind of do the math.  But if we outsource it and upscale it, it will end up being hundreds of thousands of dollars, when it really can cost tens of thousands of dollars a dose.


So just to sum up and I didn’t really have a lot of time to show you all the data, but we have encouraging early phase data to say that cord blood and cord tissue cells can help children with various types of brain injuries, but we have to do phase three well-designed studies to confirm efficacy and then to obtain regulatory approvals.  Those are long, expensive, and big processes.  But these therapies have the potential to treat diseases with unmet needs, and to change human lives.  And when you make a child better — when you make that child be able to walk alone, it impacts the rest of his whole life.  So it’s not just that one thing that makes him better.  But clinical trials are very expensive and NIH doesn’t typically fund the level of phase three that need to be done.  Complex end points require novel clinical trial designs.  Point of care delivery has to be addressed and the workforce and the competencies to do that have to be developed.  And we have to harmonize the FDA regulations and point of care cell therapies, because some of the lines in the sand on specifications really don’t make any sense.  So thank you.


SARAH DASH:  Wow, thank you, Joanne.  I know we’ll have lots of questions.  We’ll turn to John next.


JOHN GLASSPOOL:  Thanks very much.  I’m going to really pick up from where Gillian and Joanne have been talking and talk about, as we move more to the — if these therapies are so successful.  How I came to be involved in FoCUS was I was the head of corporate strategy for a biopharmaceutical company was so — such a believer in this technology, that essentially said, well, if this technology is going to work the way we think it’s going to work, then we need to change the healthcare system to support that.  Because the science is exciting, the benefit was clear, we knew that it would actually take quite some changes within the system in order to get these products used.  So the FoCUS project is really about the financing reimbursement of cures.  I think Gillian mentioned the point of whether these things are really cures. The key to me is the difference with these therapies are that they are durable.  And their durability as in there’s an initial treatment, would then follow in benefits, is what makes them very different from other drugs in the system and I’ll highlight that.  The FoCUS project itself is very much a mixture of all stakeholders involved in the delivery of healthcare.  So it obviously is drug developers, but it’s also the payers, the providers, the regulators, and the goal of the key overall is to make sure these innovative cures are accessible to patients.  So patient access is the guiding star of the whole project, but the fact is that we believe it needs to be sustainable to all the stakeholders.  So if patient access is going to be achieved, whatever system changes we come up with need to support all parts of the stakeholder system.


So the overall pathway which we undertake at MIT is what’s called a design lab, where everything we work on is obviously — it’s MIT so it’s highly systemized and measured.  But the group — there’s over 50 organizations, 150 individuals, and as I say, it covers all of the key stakeholders involved in drug development.  Jocelyn mentioned the pipeline of 300 products.  What we’ve said is overall if we apply normal attrition rates, there will certainly be a significantly more products in the coming years.  The next slide shows you the difference between durable therapies and classical medicines.  If you take your blood pressure medication, the benefit and the cost really move in parallel.  Very much like renting a house.  You live in the house, you pay the rent, all’s well and good.  Durable therapies have this acute cost point where — which is much more like buying a house.  So there’s an acute cost point, but you get the benefit from the medicine over time and that’s the key difference.  This acute cost with an assessment and an assumption of the accretive benefit.  So that gives us then three financing challenges.  One is that payment timing, which is a one-time high-cost.  The performance risks, which I’m going to cover, which is there’s an assumption around the value and obviously that value is determined by the effectiveness and the durability, given the fact we say these are durable therapies.  And obviously with these diseases being rare, there is an actuarial risk with a normal distribution of who in the population is going to suffer from these conditions.


I should say at this point, to be clear, that the focus or focuses are on the finance solutions, it isn’t about setting the value per se.  So we are not involved in the value assessment, but once the values are agreed, how do we make sure patients get access to the medicines?  However in order to enter this debate, you need to understand what do we think about value and not price setting?  And I think there are some key elements here.  Value is benefits minus costs.  However, the (indiscernible) at the end says, because of that patient variability, it is inevitable in these conditions that there’s going to be variability on costs and there’s going to be variability on benefits.  So if one is a value-based world, and you’re setting a scheme to optimize value, then you need to take into account that actually there will be differences between value and just an average value.  So if we use Gillian’s mustard analogy, we need to make sure that the heat is the right heat and not the variance in heat that was assumed.  The other key factor is that we’re talking about many different conditions and this is definitely an area of one size does not fit all.  So we talk about gene and cell therapies, but when we’re thinking about what is the burden on the system, how many patients need to get access, is there going to be a surge of demand for product?  We need to look at the specific condition.  What is the morbidity/mortality?  What is the population incidence?  What is the population backlog?  And what are the current treatment alternatives and costs?  And from that, that will drive different assessments of the need from a healthcare perspective.  So no one size first all and I think what’s important is when we look at what we call cure architypes from oncology novel breakthroughs to quantum leaps, which is (indiscernible), based on the epidemia of the condition, who actually covers those conditions varies markedly.  So obviously for diseases where it’s a pediatric patient, they’re going to be covered roughly 50 percent by Medicaid and 50 percent by commercial plans.  Obviously if it’s a disease of the (indiscernible) it would be prominently be Medicare.  So thinking through the disease helps you also think through who’s the likely payer and what are the system challenges we have in order to put a solution in place for that particular disease, given the disease incidence and prevalence.  And so the goal of the financial tools is to make sure that we get to this precision financing and we deliver the value that’s assumed, and when people are paying for value, it is value achieved.


There are three ways that we feel FoCUS MIT is to do that and that is short-term most everybody’s contracts.  And this is where specific payments are tied clearly to outcomes.  So Jocelyn in her introduction mentioned that the companies are moving in this direction.  I personally am a big believer that the healthcare system we have is built on paying for inputs.  What did you receive?  What diagnostic did you receive?  What drug did you receive?  It needs to move to paying for actually outcomes.  And obviously when you’re talking about this value, both in terms of clinical value to patients and then in terms of that accrued benefit leading to a higher cost.  It’s really important that you do actually pay the value that’s been achieved.

The second one then is multi-period performance.  We talked about that it’s more like buying a house rather than renting a house.  And so here this is annuity payments based over a number of years like in three to five years to spread that cost.  And then the third (indiscernible) that we feel is appropriate would be an often re-insurer benefit manager that can carve these patients out, given their rarity, given that actuarial risk, and manage them independently of the rest of the population.  And overall, we believe that these solutions need to be customized for each disease and satisfy each stakeholder.  The regulatory and policy landscape which we feel may hinder or more positively, if we can adapt it, will actually enable these changes to take place with regards to annual annuities with regards to most of these contracts and value programs of all of the following.  One of the key ones is the drug price reporting and rebate, there’s some key changes here adapting to multi-year performance structures.  So normally those rebates in a given financial year, how do we manage that when it’s across multiple years?  And then by understanding the rebate system for these and making sure the value-based assessment doesn’t overly impact Medicaid best price, allowing greater risk taking.  So rather a greater risk can be taken if we recognize there may be some patient failures if that failure doesn’t lead then to a catastrophic drop in the Medicaid best price.  And an example of this could be weighted assessments or performance, versus a single case performance.  Anti-kickback statutes have been a concern, however obviously as you’ve seen recently, this is definitely an area of work in progress and there’s been recently announcements that this has been developed and worked on, so I’ve grayed that out.


FDA communication guidelines to enable appropriate performance metrics.  Joanne in her talk, talked about the complexity of measuring some of these conditions and the ability to measure improvements.  And what we need to be very clear of is that the endpoints that maybe be acceptable to regulators may not be of the most value to patients and may not be the easiest to measure for payers.  And so understanding that and understanding the fact of how will we actually capture that value in a value-based agreement, is critically important.  And then making sure that the FDA doesn’t penalize people for talking about end points which aren’t actually in the label, but are directly tied to the clinical outcomes that are important, would be a huge benefit.  Clearly as we’re talking about individual patient performances, and we clearly want to keep patient privacy front and foremost, making sure that HIPAA guidelines enable data visibility to (indiscernible) both parties without exposing patients is important, and finally, making sure that insurance regulations are appropriate, deductibility’s and co-pay waivers may not be appropriate for these acute durable conditions.  So that’s the FoCUS project and I appreciate you taking the time to listen.


SARAH DASH:  Thanks, John.  All right, Rena.  Bring it home.


RENA CONTI:  No pressure.  Good morning everyone, and thank you so much and thank you to the Alliance for this incredibly inspiring panel.


So just by way of introduction, I’m a health economist.  Before I was faculty at BU’s Questrom School of Business, I was faculty at the University of Chicago and held an appointment in the Pediatrics Hematology/Oncology Department.  It was there, under the tutelage of my department chair who was a stem cell biologist, that I really started to understand the true breakthroughs that we are on the precipice of having for children, but also for people — for adults as well.  And it also inspired some work that I’m doing right now on trying to understand the financial toxicity and the access points or problems that people are facing in accessing this therapy — these therapies — for people with blood cancers in addition to other very high cost, but potentially high value therapies as well.  The other thing that you should note is that I as a card-carrying economist, I have a tattoo of a pocket protector on my — I swear — I’m a voting member of ICER and because of my interest in pediatrics, in particular I’ve really become very sensitive to the way in which cost effectiveness analysis is applied to pediatric populations and very rare disease populations.  I will be a voting member of the committee that reviews the first stem-cell therapy that comes out in a couple of months.


And then lastly, I should tell you that I have a very long standing interest in the financing of cures and I mean “cures” in a very specific context, as in we know it when we see it.  True mortality and/or morbidity gain that is durable, as James said.  We have cures already.  Including those embodied in vaccines.  So they are not new concepts.  And one should think about the financing and organization of cures in that context as well.  As part of that long standing interest, I am part of a team that proposed the first ever subscription model to provide guaranteed access to everyone, insured by Medicaid, and also the state prison population who are infected with Hepatitis C and eligible for treatment under the current, newly available DAAs.  That subscription model, you may have heard in the news, is being piloted in the state of Louisiana.  We’ve already treated something like 1500 people and it’s based on that very exciting new development that I think we can actually make some progress here in thinking about how do we actually finance this and think about this moving forward.


Lastly, I’m a card-carrying economist so I really  — my comments are really meant to think about first principles.  What’s different?  What’s the same here for these therapies?  And I promise there will be no math.  Okay.  The first thing that is very important about these therapies is that we’re all in it together.  By definition, these are acts of God.  And the diseases and the therapies that make us eligible for treatment, are ones for which really we have no control over based on our own personal behavior.  It has everything to do with our biology.  From that, a lot of the other pieces flow.  So my real agenda is to think about the three economic challenges, some of them are true market failures, to getting people access to needed valuable prescription drug-based cure.  And really to highlight the disease, the leadership opportunities to improve access.  And here, my goal is to improve access both for therapies that exist now, but also for therapies that are on the horizon.


There are three economic challenges.  The first is innovation, the second is financing treatment for all eligible patients and the last is (indiscernible) capitalism.  I’m going to start in reverse order.  In panels relating to drugs and drug access, it’s very common that we start thinking about all the different (indiscernible) actors and the one that I really want to focus on here is our system at large and not really focus on any one particular actor.  It will become obvious in a second why.  So the pricing of these products currently is around $400,000 to $800,000 a pop.  Medicare sets reimbursement for these products and currently for the currently available therapies that are used to treat leukemia, the right level of reimbursement has been set at approximately $200,000.  But this begs a different question, which is, what exactly is the right level of spending on prescription drugs versus all the other things that one can do to make people healthy?  And just again from first principles, this likely varies by the productivity of the input, but also of the output.  What I mean by that is we should pay more for things that are more productive.  We shouldn’t waste money on stuff that isn’t productive to improving our health.  This view can conflict with physician and hospital culture and also market power.  So one of the things that’s really important to understand about the sticker price of these products, is that on top of the sticker price related to the drugs are the hospital costs, the physician costs, the diagnostic cost, and all the other ancillary costs, which can double or even triple the bill that the ultimate payer, us, will face.  Now in most consumer products, new technology proports to make things cheaper for us.  And that’s because it substitutes labor and reduces costs in other ways.  That doesn’t happen commonly in medical care.  Why?  Because there are other forces at play that try to capture the value of these products of this new technology.


So one of the things that just came out recently is that some hospitals have announced that only academic medical centers should be actually making stem cells.  Why?  Well, in part it’s for their research.  Another part is to assure the quality of the processes.  The other part is to capture rents and cut pharma out as much as they can.  Similarly we’ve seen efforts by hospitals to try to think about different sites of care for the treatment, for the use of these therapies.  Again, one way of thinking about that is, oh, we want to make sure that patients who are getting these therapies are really benefitting from them in the most high level controlled setting, another is opportunities for rent seeking.  Probably those two motives are existing at the same time.


The way in which CMS and payers typically tend to think about how to control this type of rent seeking is by bundled payments.  And bundled payments make sense here, but particularly they make sense where costs are uncertain, where the benefits of therapy may or may not actually accrue to the patient, and/or there is an opportunity for rent seeking, which we worry about, which kind of endlessly pushes the budget out for this spend  — or for this therapy.  Or when follow on innovation is not a key concern.  Here, CMS was actually quite prescient in trying to understand exactly what the costs were.  They required cost reporting in addition to risk reporting by the hospitals that were using this therapy.  They also are allowing off-label use of these therapies, which I think is incredibly important to really think through what exactly is a benefit of these therapies, not just for the indicated patient population, but for others as well.


What about the challenging financing access to cures?  Bottom line is that very high prices or very large eligible patient populations or both can create liquidity constraints and that can happen for patients who are individually responsible for their therapy or for payers.  This might be related to the mismatch and timing between treatment costs and benefits as James suggested, there’s clearly an upfront bolus of spend here that needs to be financed somehow.  Better insurance, better coverage, better guaranteed access is a solution to all financing challenges that look like this.  This includes insurance covered mandates, but also lower out-of-pocket costs.  There is no economic reason why people should be paying deductibles and co-payments for therapies that are durable cures.  Having skin in the game will not make you a better shopper of therapy.  Approximately 15 percent of patient population here is insured by Medicaid in general for these therapies, but it’s entirely possible in these subpopulations and the application of these specific diseases that actually Medicaid is actually the insurer for the vast majority of therapies.  Medicaid programs have their own budgetary constraints that are annualized.  They can’t borrow money from the bank and pay it back later.  Even though there are requirements for state Medicaid agencies to provide access, they don’t in practice.  We know this in carte, we are seeing this in other types of new therapies as well, and truly my nightmare scenario is a sickle cell cure for which some states provide access, others slow walk access, some insurers in the state provide access, others do not.  The dynamics attached to that and the optics attached to that are unacceptable.


Finally, the challenge of innovation.  The people who are doing this type of work, they are doing God’s work here.  Yes there is fame and glory attached to doing this type of work, but on my God, they are curing kids.  Amazing.  Truly amazing.  And they do face (indiscernible) inconsistent preferences by payers.  Willing developers want to make these therapies, they want to deliver cures, but once they deliver them, they know that they are going to get bargained down to lower prices, particularly when the government is paying.  Because of that, we believe that innovation actually is less than it should be and we reward innovation with higher revenue — more revenue for patients, higher prices, or a lower innovation costs and other risks.  Still may not be enough to get all the cures that we really want to have happen.


I’m going to sum up with just some observations on leadership and I’ll make this quick, I promise.  The first is that improving insurance resolve most access challenges for patients.  This by necessity requires shifting money around.  That’s what insurance does.  It’s a forced saving mechanism between periods of healthy states to periods of sick states.  Between healthy people and sick people.  We need to find a way of sharing those risks and there are ways of going about doing this that don’t break the bank.  Reimbursement policies provide opportunities to reduce super additive costs with sub-additive benefit.  We should be really looking to optimize what the prices are of the therapies but also matching the right ancillary costs with the — and really looking for opportunities to stop spending money on stuff that really doesn’t make that much difference in the lives of these patients.


And then lastly, we really need to send clear signals to innovators that we care about cures.  And that what actually constitutes true, meaningful innovation.  We likely need some guidance here on what is a cure, but also regarding how to think about setting price regarded to cost-effectiveness and also effectiveness.  From my perspective,  you do not need an outcomes-based contract if you’re providing a true and obvious cure.  There, the only problem is how to provide access to the people who need it and at what price are we going to do it.  In other words, it’s essentially a quantity commitment in exchange for a lower net price that the manufacturer provides, with no guarantee of durability, accessibility, et cetera.  We have models for doing this.  We do this in vaccines, we do this in Hepatitis C and we’ll do it in other therapies as well.


Finally, there is some controversy over whether or not we need to really revise our medicated rebate rules, our 340 B discounts and others.  What I would argue is that subscription models that exist are quantity commitments in exchange for lower prices already exist.  And they did not require revisions to these rules.  And so it’s not obvious that they do need to be revised and it’s something that should be considered more generally.  I will sum by saying, we are all in this together.  Thank you so much.


SARAH DASH:  Thank you.  Can we give our panel a round of applause before we even get to questions?  That was amazing and we are going to have about a half an hour for your questions, so I really hope that you’ll think about clarifying questions or bigger questions.  Write them down, we’ll come around and pick them up.  For those — before you head out, if you do have to head out, do fill out your evaluation form and tell us what else you want to learn.


So let me kind of start us off while the questions are coming up. I want to start with — we literally just watched a video of a child walking — that’s absolutely amazing.  And then we also heard words like, “safety” and “efficacy” and “durability”.  I want us to get into a little bit how do we make sure the systems are set up to ensure safety?  How do you really know the efficacy and can you get into this word “durability” a little bit more because I think this is kind of the first time I’ve heard it as far as the health context.  So maybe Joanne do you want to start us off on like, the safety and efficacy piece?


JOANNE KURTZBERG:  Yeah, so I think if you play by the rules and you are testing a new therapy and you obtain an IND from the FDA or an IDE if it’s device.  There are built-in guardrails that you have to meet in order to show that you have evidence of safety.  Sometimes invitro systems, sometimes it’s animal systems, sometimes it’s because the product — like, when I’m using cord blood for CP, cord blood has been used for transplant for 30 years.  So there’s a lot of clinical experience of cord blood in humans.  So — but there are — you have to provide evidence and a rational for why there is safety or if there is not safety, you have to put in a proposal with a clinical trial that looks at safety in a very calculated way, maybe starting at a very low dose and increasing the dose, et cetera.  But FDA has a lot of that built into what goes into an IND application.  Efficacy is a lot harder, particularly, I think, in cell therapy and particularly for me, working with children in developmental type diseases where normal development changes the function of the child and you have to really look hard to be able to prove that you’re not seeing a change in what would be developmental occurrences.  You really are impacting and changing the course of that child’s disease.  And that’s, I think, really hard to do.  We struggle with it all the time.  I don’t think parent reported outcome measures are sufficient, I think there’s a huge placebo effect there.  I’m a parent too, so I’m not saying anything bad about parents.  But if you’re going to have a therapy that’s going to impact a huge population or even a small population of patients and it’s going to cost money, you really have the obligation to show that it makes a difference.  I think your point about FDA end points are not always meaningful end points to patients.  I think that’s a whole science that we still need to perfect and we don’t have a good way to do that yet.  And you know, durability is relative to me.  Yeah.  But in the diseases I’m working right now, obviously if you can make an impact that sticks and impacts other things in a child’s subsequent life, that’s hugely important.  But sometimes if you make a small impact and it’s just on a short term end point, it still can be very important.  So it’s hard to talk about all of it at once.


SARAH DASH:  Sure, thank you.  Is there a widely accepted definition of durability?  Is it how long the treatment lasts?  John, do you want to chime in there?


JOHN GLASSPOOL:  Sure, so I don’t think there’s an accepted definition of the length of time because it is disease variable, but the key concept is the following that the administration benefit of the agent continues well beyond that administration time period.  And so if we take an example that we’re used to, hypertension; hypertension medications will drop your blood pressure as soon as you take the medication.  But as soon as you stop taking the medication, your blood pressure will return to that high state.  With a durable therapy, you administer that therapy and that benefit will continue over time, long beyond the initial administration.  So that’s the key aspect of durability.  How that translates into policy and value is that the pricing or the value of that would have assumed that durability.  And so that’s why you get the accrual of cost at that cost point.  And the reason that I personally use “durability” versus “cure” is the following:  There can be some conditions where these therapies can deliver marvelous benefits to patients.  Does that patient have no other challenges or other difficulties even within that disease?  They may well have, but the specific benefit that’s been targeted by the therapy still benefit there, even if they are not fully cured, if you will, of the condition.


SARAH DASH:   Gillian.


GILLIAN WOOLLETT:  So I’ve got a clarifying question:  So are we prepared to make the assumption that however much benefit you reach, is a plateau till the end of time?  Because otherwise the ongoing studies to realize the costs for any subsequent decline become a real hurdle to development, right?  As to when do we know what we need to know to make the decision.


JOHN GLASSPOOL:  Yeah, what we’ve assumed in the FoCUS project is that we feel a reasonable time period would be for these conditions two years from (indiscernible) conditions and five years for other conditions.  And that was taken for two key reasons.  One is, what is a meaningful effect in a given condition, and we felt that was a very meaningful condition and would be durable versus taking a tablet every day or an injection every day for a therapy.  And then obviously with the gene and cell therapies, if we’re assuming that it’s durable, five years seems reasonable.  The other background to this is of course from a safety perspective to the earlier question.  These patients are being required to follow the safety for 15 years.  And so seeing a maintenance of a benefit over five years seemed reasonable, but there’s no hard and fast, Gillian.


SARAH DASH:  Thank you. I think we have a question in the back.  Yes?  Please identify yourself.


AUDIENCE MEMBER:   Hi, Arthur Allen from Politico.  You talk about an expanding pipeline for these treatments.  So lets say in ten years whatever number of them are out there and some are for pretty important, less rare diseases.  My question is, how do you — I didn’t hear anything today that convinced me about how you’re going to tackle — or how you conceive of society tackling disparities in treatment and just how we’re going to pay for this is this — I mean, are these treatments going to cost $500,000 indefinitely?  Or do you anticipate they’ll come down?  And how to account for this disparity — you mentioned sickle cell — if most of the patients are on Medicaid and Medicaid programs can’t pay for them, then how do we deal with that?


RENA CONTI:  Yeah, thank you for the question, I’ll take it first.  So we think that there are about 20 to 30 therapies that will come to market in the next ten years or so.  And the vast majority of them are in small patient populations, hemophilia and sickle cell probably being the largest patient populations.  So the budget — if you do the math, the budget impact actually is not enormous.  What is potentially enormous is that again, these are random acts of God and so the risk associated with any given state and/or insurer having one or more of these people who need to be treated in a given year, could actually blow budgets.  And so that’s the kind of — that’s the risk that insurers are now facing as these therapies come.  Will the price come down?  Well, no.  Not unless there’s true competition within a given therapy and paired with a given indication, just like we’ve seen with any other therapy.  Sometimes you’ll hear people say, oh well, if we just internalize the manufacturing of these into the hospital, then the cost of manufacturing will come down. Sure, but who’s going to capture that value?  It’s not going to be the healthcare system unless we design it to do so, which we don’t do now, so why would we do it then?  So I think that we have a real issue, which is that we need to start thinking about what our insurance principles are here for providing access irrespective of how you are insured or who you are.  Given that some of these therapies are going to come out in populations that we have some uncomfortableness with redistributing to.


SARAH DASH:  I’m glad you asked the question, because it was similar to a question on one of the cards about how to make sure that therapies are affordable as they come on the market.  So I want to push a little bit more on the question.  You talked about insurance.  The purpose of insurance is to protect against risk, right?  We’re talking about a paradigm shift in therapies, does there need to be a paradigm shift in coverage and are there targeted ways to think about insurance coverage beyond like, oh, the small businesses, you know, the small business now has to cover a two million dollar therapy or this state Medicaid program or that state prison system.  How do we need to start thinking about that?


RENA CONTI:  So we — again, I think the way to do this is to think by analogy, which is, we have other therapies or other types of disease for which we now have treatment that is quite effective for which there is an incentive or there is some disparateness in insurance coverages.  So there are mental health parity acts that swept through the states and ultimately became a federal law. And it essentially instituted a kind of set of conditions upon which we are going to provide access to therapies.  Because we know that health is good for these individuals, but also it’s good for society to actually have some basis for coverage.   I don’t see why we wouldn’t want to have some sort of parity laws that look similar to address these issues.  You don’t have to go all the way towards a federal mandated benefit that — like, end stage renal disease, to get to a much more assured, even sense of coverage and reimbursement.  You might hear that as being proposed by some fix.


JOHN GLASSPOOL:   Can I just add one point, which for these conditions that we’re talking about in this particular panel, they’re very different than our other ongoing medicines in that that benefit once delivered as a gene therapy.  That patient should leave the patient population for that particular condition.  Now that’s not to say that there weren’t other health challenges that need coverage, but once they’re treated, they will leave the patient pool and you will then be left treating each year with just the incident population, not the prevalent population.  And we have a great analogy that we’ve seen in the real world for that, which is the Hepatitis C, a great concern about the bolus of patients and the surge at the beginning, but if we look at what happened there, two factors happened.  One was in a quick entrance of another competitor, drove down prices.  But the most important driver was that patients that left the patient pool and the incident population cost much less.  That’s very different than many other diseases where once someone has been treated for the condition, overall they require being treated for life, and that burden is ongoing.  And we should not lose sight of that for these rare orphan conditions where we’re actually changing them and taking people out of the disease pool that they are currently in.


SARAH DASH:  Let me ask a clarifying question about the pipeline.  Maybe Gillian, I’ll put you on the spot, but if others want to chime in.  How many of these drugs that are in the pipeline now are therapies — do we think they will be pills?  How many of them are going to be a shot?  How many of it is like a one-time massive transplant process like CAR-T?  Do we have a sense of that and how that’s going to affect the system?


GILLIAN WOOLLETT:  I will certainly defer to others, but I think we’re anticipating high touch care in most of these situations.  But I think to the point of the parallel of Hep-C, you know, we’ve also got some of these things with biologics in general and the question is back to what is restored?  We have it with array of people who are disabled, but you could mitigate and allow them to continue working.  So I think the system has a tremendous number of versions of different levels of intensity of care anyway and there’s going to be some variability, but the fact that you’re going with gene and cell therapy, understanding the basic mechanism of the disease is very different from historically we had with a pill.  And I’m willing to say at this point, I’m not anticipating any of them being a pill in my lifetime.  I mean, there is a associated level of diagnosis and care.  There’s also just to at some level hedge a little bit the act of God, there are going to be some that are genetic tendencies.  And sickle cell is going to be one of them that we have to understand that some of them, if not preventable as diseases per se, they are anticipatable in ways that society may choose to manage.   And different societies will choose differently.  I mean, this is the other thing.  When you are developing a therapy, it’s often global development or at least a highly regulated market.  So we are going to have evidence coming in XUS in situations where we do have a denominator and can look at these things a little bit more differently.  So just to add to the mix.


SARAH DASH:  So I want to ask a question about competition, because that comes up a lot in these kinds of conversations.  I mean, given it’s — we’re not just making a generic version of an aspirin or something and we’ve gone through this conversation with biologics and that sort of follow on biosimilars.  Is there any meaningful kind of conversation to be had about competition?  What does competition even look like when you’re talking about a whole process?


GILLIAN WOOLLETT:  This is the one good news bit that’s I’d like to add, is the science is cumulative.  And so we are learning to some extent across platforms on certain of the vectors, certain of the approaches.  What is a good clinical way of handling these cells and having joined Joanne before with FACT, the Foundation for the Accreditation of Cell Therapy.  There are good practices now that we know are good practices.  So there may not be enough trained people, but there are things that we now know we have to do in order to keep cells alive.  So I think the doability is based on the experience and we did have a tragedy a few years back when the whole field took a step backwards.  And we do have an incredibly risk adverse and very careful FDA to deal with.  But I think the cumulative model of the science and the shared experience collectively, and the degree to which some of this is public, is actually a plus.


RENA CONTI:  I agree completely.  I think with Hepatitis C there is just straight therapeutic obsolescence.  So new therapies came out, there are competitions between firms, and over time there are products that don’t exist any longer in the market that frankly did provide benefit to people.  They are just not as good as the therapies that we now have.  And so that is the way the world works.  We see it in other consumer products.  My view is that given these are very small patient populations, it takes a lot of money and a lot of effort and a lot of risk, frankly, to be invested in these.  There’s no reason that we shouldn’t see particularly for the larger patient subsets some competition between firms and trying to get to market.  Whether or not these firms will try to split the market into therapeutic indications that are not completely overlapped, we’ll see.  To try to avoid potential therapeutic interventions, or straight head-to-head comparisons; we’ll see.  But my view is that we’re not going to see a significant amount of competition between firms in a given therapy indication patient subset pair.  And if and when we do, it’s likely going to be winner take all markets where there’s just the best one wins.


JOHN GLASSPOOL:  Overall, I agree with that for the orphan.  I think for some of the rare ones, there will be competition.  We see that in sickle cell, there’s three drugs close to market.  We see that (indiscernible) drugs to market.  And I think that will lead to the same market dynamic that was observed in Hepatitis.  And so that market dynamic will come to play in terms of ensuring the value is achieved.


SARAH DASH:   I’ve got two more questions, but first I want to look at the room.  Does anyone have a question; you can raise your hand, write on a card.  We’ve got about ten more minutes.  All right, I’m going to keep us on the hot seat on affordability for a second and then I have a second question before we wrap up.  Price.  Rena, you talked a little bit about ICER.  We’re not going to be able to get into all the details here, but talk a little bit about, given these are very expensive therapies to bring to market, how do we even begin to think about what the price should look like?


RENA CONTI:  Why do I have the hard question?  So again, reasonable standards of price apply in this market like they do in others.  ICER evaluations and other cost effectiveness agency evaluations for these type of therapies actually don’t vary that much between countries.  Which should tell you something.  Which is that essentially the pricing behavior of these firms is taking into account the existence of cost effectiveness analysis and coming up with a societal price already.  And ultimately the value provided will be reflected in the price, but also it will be reflected in the coverage and reimbursement levels that are set by the government payers.  And so the value perception from the firm’s perspective, sure their goal is to try to extract — they’re monopolists, their goal is to try to extract as much revenue as possible from the industry, but there is a limit.  And that limit has to do with coverage and access.  We are already seeing with the CAR-T therapies that there are very significant hurdles for patients receiving access to this therapy.  And so, sure we’re willing to pay high prices for them, but that is not translating into very significant revenue because the quality is lower than it needs to be.  So there are trade-offs.


SARAH DASH:  All right, I want to ask a question about sort of equity and access.  I mean, we talked about these are not a picnic, these therapies.  Joanne, you talked about the babies having to go into the MRI machine twice or more.  Can you talk a little bit about equity as it relates kind of from the very beginning all the way through access?  How do we ensure equitable research — diversity and research — and patient access beyond just the actual physical cost of the therapy, but the other costs that are associated with getting the therapy.


JOANNE KURTZBERG:  It’s very, very complicated.  So in the clinical trials I do, the cost of the trial is covered.  The family actually gets a travel reimbursement and money to cover their time in Durham when they are getting studies done for the trial.  But in our (indiscernible) trials for example, unless you had not (indiscernible) cord blood unit banked, which costs money at the time of the birth, the family didn’t have access to the trial.  In our first trial, all the patients were pretty much from California and they all banked in a couple of big West Coast private cord blood banks.  So that’s an extreme example of how just being in a certain demographic controlled access to the study.  But you know, I think when you’re providing care, particularly complicated care, it’s not just about covering the cost of whatever the therapy is, because that’s kind of — not that it’s that hard but that’s the lower hanging fruit to me.  So in my (indiscernible) program, we have a family support program and that pays for all the stuff that medical care doesn’t cover for families who are coming for weeks or months at a time.  Because they have other expenses at home, they have travel expenses,  they come without winter jackets and it gets cold.  They need to — food for the kid in the hospital is provided, but not for the mom or the dad.  I mean, very basic kinds of needs that people have when they’re out of their normal community and not home and getting care, particularly for a child with a desperate illness come up.  And we don’t have an adequate way in our society as far as I’m concerned, to pay for any of that.  I mean, people do it by hook or crook and there’s Go Fund Me’s and there’s programs that have programs, but there’s no organized ways to address this and I think it says that healthcare is not just about the price of the drug.


JOHN GLASSPOOL:   I can totally agree with that.  I think there’s a huge hidden cost with these therapies on the families, which is a significant burden, especially given the demographics.  Unfortunately, many of these families.  I think my point on that (indiscernible) and the slow walk of access like we talked about at CAR-T is to enter into value-based agreements.  If there’s a question — there’s clearly no question that these patients are eligible.  It’s very clear whether they have a genetic condition or not.  This isn’t something that needs to be debated endlessly whether they have these conditions or not.  The condition is clear.  The point is, can the system afford it?  And I think the system overall shouldn’t be arguing about that, they should be arguing about let us put in place where we establish the benefits. And if the benefit is established, then we pay.  But if the benefit isn’t established, which is the hidden question, then we don’t pay.  And I think we should put more energy into establishing these value-based agreements, (indiscernible) based contracts and annuities, give people the access, see what the real benefits are, and then reassess the challenge.  If we always start with the barrier, patients don’t get access and we’ll never understand the real value of these medicines.


SARAH DASH:  Thank you.  All right.  We’ve got about four minutes left.  So here’s the hardest question of all.  In one minute each:  What excites you the most and what gives you the most pause about cell and gene therapies?


GILLIAN WOOLLETT:  I think the fact that we’re now on a road where we agree they work.  And we have a few approvals.  Science is cumulative.  And so therefore we’ve got that hope, we just have to work out the mechanics of ensuring at some level that those that can benefit the most can access even if not everybody can benefit.  And I do worry in broader sense on who’s deciding and in what basis, because the good news is that binary decision upfront, but then the level of benefit and what it’s worth to whom is a tough one.


JOANNE KURTZBERG:  So I think these are incredibly promising therapies and that they will be the next big advances in the next decade or two of medicine.  I think we’re beyond drugs and into something much more powerful.  But I think we’re at the (indiscernible), yet there’s so much work to do and I think proving that — which therapy has a (indiscernible) or not and then figuring out the logistics of manufacturing and access are incredibly challenging and doable, but not trivial.


JOHN GLASSPOOL:   Certainly what excites me is the potential to truly transform patient’s lives and I think in the case of pediatrics, these family’s lives.  I think that’s why we all do what we do.  What worries me the most is that we’re trying to judge these therapies and their potential benefit in a system that’s been dealing with chronic small molecule medications and I think to apply that system to these breakthrough therapies is a big mistake and doesn’t really show and shine the value that’s being delivered.  And so I think it really is on all stakeholders to take in.  You look and say, isn’t this the first group of medications you’d actually fund and fund appropriately.  And you’d look at those other medications somewhat differently and see how you redeploy value to these things that can really make a huge difference to people’s lives.


RENA CONTI:  The ability to transform people’s lives for the better, I think is what’s so exciting.  I think I am very, very optimistic that payers and policymakers can come to some good rules of thumb here about making sure that these therapies are accessible to those who really will benefit from them and will still pay innovators what they need in order to keep on bringing the new technologies to us.


SARAH DASH:  Thank you so much.  So we have covered a lot of ground today.  I think we could drill down into about 20 different topics and have another hour and a half panel on each of them.  For those of you who want to learn more, I really do want to commend — in your packets and also on the Alliance website, there is a list of recommended reading that I think there’s some really good resources there if you want to take some home over the holidays and delve into this some more.  We have a list of experts as well who have agreed to be contacted for additional background. So with that, I want to invite you in the name of value and innovation, fill out those blue evaluation forms, we really do use them.  I want to thank our sponsors for making today’s briefing possible and our entire signature series on navigating the frontiers of value and innovation. And please join me in thanking our panel.