Challenges and Solutions for Budget Impact Analysis of Gene Therapies

Gene therapies represent a paradigm shift in medicine, offering the potential for significant improvements in both quality and longevity of life, by addressing the root genetic causes of diseases. Due to this potential for substantial health gains, gene therapies often come with substantial upfront prices. In addition, their one-time administration means the cost of the treatment is incurred at one point in time (assuming the cost is due at the point of care), rather than spread over the patient’s lifetime as it would be with chronic treatment. As a result, gene therapies are often assumed to raise affordability challenges.

Budget impact analysis (BIA) plays a role in informing healthcare decision-making. BIA are typically conducted using short time horizons (2-5 years), and from the perspective of the budget holder (e.g. the health system). Gene therapies, with their significant upfront costs, are therefore likely to be viewed unfavourably via current approaches to BIA, as longer-term cost savings and wider spillover effects fall outside of the scope of these analyses. To date, the impact of BIA on reimbursement of and access to gene therapies has not been considered in detail.

This report reviews the current approaches to and use of BIA in the context of gene therapies across a selection of European countries: Belgium, England, Denmark, France, Germany, Ireland, Italy, Poland, Scotland and Spain. Via a series of literature reviews and discussions with an expert panel, we find four main ways in which the results of BIA are used:

1. 1. to inform commercial negotiations, either routinely or when the conditions of a budget impact test are met.
   2. to inform reimbursement decision
   3. to inform a decision re whether a full HTA is required (HTA routing)
   4. for budget planning.

Whilst there is little international harmonisation in the timing of BIA or its use within the decision-making process, we find greater international harmonisation in the approach to undertaking BIA. Many countries utilise similar time horizons, approaches to selecting comparators, and requirements for sensitivity analysis, amongst other aspects.

We also explore the impacts of the different uses of BIA in decision making and identify elements of good practice amongst our countries of interest. We argue that too much focus on short term BIA risks impacting incentives for future innovation, and that this must be balanced against short term affordability concerns.

Finally, we set out a series of recommendations across the use of BIA, BIA methodology, and tools to be used alongside BIA. The full set of recommendations is presented below. It’s important to recognise that BIA methods and processes vary significantly across European countries, so recommendations should be tailored to each country’s health system and reimbursement processes.

Recommendations on the use of BIA in decision making

• Health Technology Assessment bodies and other relevant institutions should be explicit and transparent about the purpose of BIA, including whether and how it will be used in reimbursement decision making.
• Further research into the implications of the use of BIA in decision-making, including its impact on static and dynamic efficiency, would be helpful. This will facilitate decision makers’ ability to make informed trade-offs between short term affordability and longer-term incentives for innovation.

Recommendations on budget impact analysis methodology in the context of gene therapies

• BIA guidance should allow for flexibility where appropriate and justifiable, for example, willingness to accept;
• • • Longer time horizons (e.g., to capture potential future costs and cost savings)
    • Broader perspectives (e.g., to capture the budget impact on other government departments such as social care, social security and education)
• Uncertainties inherent in BIA of gene therapies should be explored through sensitivity analyses that vary patient eligibility criteria and target population size.

Recommendations on additional tools to be used alongside HTA

• Existing horizon scanning activities could be strengthened to aid budget planning in the context of high upfront cost therapies such as gene therapies. International collaborations could be leveraged further to maximise the usefulness of available information and minimise the duplication of efforts.
• Innovative payment models should be considered as tool to facilitate access to gene therapies. In doing so, the risk associated with uncertainty is shared between the payer and manufacturer, while also spreading the initial cost across a longer period.
• Where innovative payment models are likely to be employed, these models must be factored into budget impact analyses to help inform decision-making, commercial negotiations and implementation. If BIA is conducted prior to proposed innovative payment models, flexibility in processes should allow for BIA to be updated to reflect the proposal.

This consulting report, Challenges and Solutions for Budget Impact Analysis of Gene Therapies, was commissioned and funded by Johnson & Johnson Innovative Medicines