Cardinal Health: 2025 Advanced Therapies Report
- IPD Analytics
- 6 days ago
- 5 min read
In this report, you’ll learn from experts commenting on key challenges and emerging solutions within this space, including how cell gene therapies are revolutionizing patient care while creating new challenges for us as an industry.
By Cardinal Health | Original Article
The United States (U.S.) market, a fragmented network of hundreds of commercial payers, further subdivided at the plan level, requires payer access considerations different from coverage under Medicare and Medicaid. Even with potential long-term durability, the high upfront costs of CGT products are not aligned with the current payer model of annualized budgets and plan attrition. “With a projected pipeline of more than 1500 therapies and more than $40B in budget impact estimated by 20301, payers are looking for clarity as to what criteria may be appropriate for managing these products, acknowledging that more innovative financing models will be required,” said Kathryne Kirk, director of commercial development on Cardinal Health’s Advanced Therapy Solutions team. “Biopharma manufacturers preparing for commercialization should consider the complexity of the payer landscape earlier in their product’s clinical development [versus more conventional specialty therapies].”
Securing coverage of CGTs remains a significant access challenge, primarily due to the high costs and unique patient profiles involved. For example, 81% of survey respondents indicated that they encountered medical policy coverage challenges frequently or occasionally, and 82% indicated these challenges had a moderate to severe impact on their ability to provide CGT. Payers typically cover CGTs under medical necessity, and coverage can vary widely at the plan level; that coverage is often influenced by employer group decisions. Employer groups collaborate with plan sponsors to determine coverage of high-cost therapies and may even carve out CGTs to manage plan costs.
Kevin Niehoff, Director of Market and Financial Insights at IPD Analytics, explains, “The plan sponsor and the employer groups ultimately are deciding what the benefits are. The employer group or the plan sponsor determines their appetite for coverage and access, and it’s a trade-off — the more access you provide for your members, and the lower cost you’re providing it for, the higher the cost that’s borne by the plan.”
This highlights the delicate balance that payers strike between providing broad access and managing the high costs associated with CGTs. Beyond the biopharma manufacturer’s restrictions on which treatment centers can administer CGT, payers have started building out their own networks of approved treatment sites as well. This adds another layer of complexity to the patient’s journey, potentially further complicating timely access to treatment. Reimbursement can also vary by treatment setting. Although cell therapy reimbursement has improved in recent years with a CAR T-cell therapy-specific diagnosis-related group (DRG) code (MS-DRG 018), bundled payment rates for inpatient treatment — which includes pre-conditioning and leukapheresis — may still be insufficient to cover provider costs. In our survey, 69% of the respondents indicated they had encountered reimbursement challenges frequently or occasionally, and 89% indicated these challenges had a moderate to severe impact on their ability to provide CGT.
Conversely, off-the-shelf therapies, which are stored and administered in the outpatient setting, are typically reimbursed more favorably (at average sales price plus [ASP+]), but require a single-case negotiation between the payer and the treatment site. These negotiations can be time-intensive, depending on the relationship between the treatment site and the payer health plan, and may also delay treatment. As Klarer confirmed, “Single-case agreements, which require payment rate negotiations per patient, are still the dominant form of payer-provider contracting for CGT reimbursement. This not only challenges the management of finances across CGT recipient cases but also adds significant operational burdens and delays to case processing because demand for CGTs has increased.” As more products come to market for urgent-to-treat indications and the demand for these products is rising, “The access journey will need to transition toward standard biologic approval processes to limit the impact of access on utilization,” she continued.
For sites with concerns over the financial risk associated with buying and billing and unpredictable reimbursement, procuring these high-cost therapies from a specialty pharmacy may be more attractive and remove some of the risk. Klarer explained, “In categories with increased provider reimbursement sensitivity, opportunities to limit provider site exposure to financial risk for products may be valued. In such scenarios, payers have cited interest in direct-to-payer models and use of specialty pharmacies for product distribution to remove the financial accountability for products from the provider site.” These challenges underscore the need for collaboration among payers, biopharma manufacturers and providers to streamline administrative processes, reduce f inancial barriers and ensure timely access for patients.
As the advanced therapy market continues to grow, experts agree the announcement of the CGT Access Model from the Centers for Medicare and Medicaid (CMS) indicates a future emphasis on innovative payment models (value-based contracts) for commercial products. “It will vary depending on the therapy space, but ideally, we’re going to see a development of more value-based contracting coming from the CGT Access Model, which will help lower some of the liability and hesitancy for coverage,” said Niehoff. He continued, “Even in the last five years, we’ve seen a tremendous evolution in how CGTs are discussed and considered. I believe that is only going to continue moving forward, especially following the introduction of CMS’ CGT Access Model.” This was further supported by our survey respondents, of whom 79% see value in innovative payment models to improve reimbursement and access challenges.
Innovative payment models offer value to payers because the cost of the therapy can be tied to its long-term clinical outcomes, but according to Klarer, “they have been difficult to operationalize for reasons such as limitations to visibility of outcomes in claims data and extent of resource allocation required to follow patients in exchange for limited potential rebate upside.” Niehoff added that additional operational challenges exist when it comes to tracking clinical outcomes. “There are a number of questions around who’s responsible for data collection, what metrics are [evaluated], and who’s going to be actually putting the logistics in place [for tracking the outcomes].” Considering these challenges, payers, biopharma manufacturers and treatment sites can take action to mitigate the challenges and ensure the operational success of these payment models. “More effective implementation of value-based contracts requires early biopharma manufacturer–payer alignment on measurable metrics, appropriate timeframes for reviewing metrics, and duration of metrics reviews to demonstrate value.
Additionally, operational processes and data sharing permissions [between patient, provider, payers and biopharma manufacturer] will be required to manage patient switches between insurance plans during the value-based contract,” said Klarer. Additionally, the sites of care can act by setting up the necessary technology infrastructure and sophistication to be able to monitor, track and report long-term outcomes on a patient-by-patient basis. By working together to achieve creative solutions, payers, biopharma manufacturers and sites of care can create equitable patient access to these innovative and groundbreaking therapies and hope for patients and their families.