To manage the finances of CAR-T therapies, which can cost up to $1 million each, health systems are increasingly using “pay for performance” deals, according to a Nov. 17 article in Specialty Pharmacy Continuum.
Fran Gregory, PharmD, vice president of emerging therapies for Cardinal Health, told the publication that health systems and providers are becoming more involved in contracts and outcomes-based payment models. Drug manufacturers and payers have historically handled these.
“Pay for performance is one we hear about often; if a patient doesn’t reach a certain outcome, either a payment isn’t made or a rebate is given,” Dr. Gregory told Specialty Pharmacy Continuum. “Another is annuity or subscription models, allowing payment over time so that a payor doesn’t have to pay the full $500,000 or more up front if a patient should change plans.”
An analysis of 391 Medicare claims from patients who received CAR-T therapy between 2021 and 2022 found the therapies, on average, cost about $500,000. In hospitals, the total cost of CAR-T therapy ranged between $276,138 and $1,066,524, and it cost between $276,980 and $849,878 in outpatient settings.
These price tags present a financial risk to hospitals. To mitigate this, Dr. Gregory said some contracts specify “warranty or milestone payments” tied to a clinical outcome. Another avenue is the CMS Cell and Gene Therapy Access Model, which currently includes only two medications but could expand.
Hospitals typically have pharmacy and therapeutics committees to evaluate medications and manage formularies. A few hospitals dedicate a P&T committee entirely to cell and gene therapies, such as CAR-T therapies.
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