How to Prepare for the Gene and Cellular Therapy Revolution

It’s no secret that healthcare treatments are advancing like never before. Innovative technologies are yielding new medical treatments and potentially cures for a variety of illnesses, including cancers and hemophilias. 

With these remarkable, potentially life-saving treatments on the horizon, many employers are preparing for how a treatment’s high price tag may impact health plans. We sat down with our founder, Mike Hill, to discuss insights to keep top of mind as we head into the gene and cellular therapy revolution.

Gene Therapies vs. Cellular Therapies

Both gene therapies and cellular therapies are among the incredible medical advancements we’re seeing receive FDA approval. These treatments both come with high price tags, but are different in their methods of treatment. 

Mike explains that gene therapies are treatments that “reengineer the genetic code to fix flaws and address catastrophic health conditions.” This is accomplished by:

  • Replacing a disease-causing gene with a healthy copy of the gene
  • Deactivating a disease-causing gene that is functioning improperly
  • Introducing a new or modified gene into the body to help treat a disease

On the other hand, the Association for the Advancement of Blood and Biotherapies (AABB) defines cellular therapies as “the transplantation of human cells to replace or repair damaged tissue and/or cells.” Cellular therapies fall under the gene therapy umbrella and include CAR-T therapies and various cancer treatments.

Both types of treatments are incredibly promising in their ability to cure diseases, with several new therapies set to receive FDA approval in the next few years. As of today, as many as 13 brand new cell or gene therapies could be approved for use in the US, Europe, or both by the end of 2023. These therapies would treat various forms of cancer, sickle cell disease and muscular dystrophy.

So, what do they cost?

The gene and cellular therapy industries are anticipated to be worth $27.9 billion by 2026.

While these new treatments provide hope for patients battling devastating illnesses, they also come with a hefty price tag. According to the Institute for Clinical and Economic Review, the average cost of a gene therapy is between $1 million and $2 million per dose – and that’s not including the cost of administering the drug.

As pharmaceutical manufacturers develop these new drugs, the companies calculate the total cost of treating the condition over the course of a patient’s lifetime. If the cost of the drug comes in below that total, it’s considered to be a win. However, while the overall amount a patient pays is less, the cost of the drug comes upfront in one lump sum as opposed to staggered across many months or years. 

What does this mean for employers?

While some employers have simply excluded coverage of gene and cellular therapies, this will become increasingly more difficult as more treatments for a variety of conditions receive FDA approval in 2023 and beyond. 

Many employers want to support their employees by providing access to these life-changing, life-saving treatments. However, a single claim could exceed an entire multi-year healthcare budget for many employers. It’s imperative for employers to find a strategy that allows them to provide access to employees that need it while keeping costs manageable to ensure the plan can be maintained in perpetuity. 

We recommend that employers protect their plan in the following ways:

Collaborate with Experts

There are many considerations to keep top of mind to ensure your plan aligns with requirements from regulatory organizations. We suggest employers include careful planning and appropriate legal, clinical, and plan administration expertise in the process of drafting plans. 

Carefully Craft Plan Language

Self-funded insurance plans offer the opportunity to creatively draft plan language to match the intentions of the sponsor. This also allows employers to take advantage of regulatory flexibility to lower their prescription drug coverage costs. Take time to ensure you’re crafting purposeful verbiage for your plan. 

Make Regular Updates To Your Plan 

As new therapies hit the market, it’s important to ensure plan language adjusts to the current landscape. We recommend reviewing plan language on an annual basis to ensure any benefit limitations or modifications are made regularly as new treatments receive FDA approval. 

Interested in learning more about the gene and cellular therapy revolution? Make sure to watch the replay of our recent webinar, “Are You Insured For Miracles?”.

Recent & Related

Addictions Are Rising Among Workers; What Employers Can Do

Addictions Are Rising Among Workers; What Employers Can Do

According to a study by the Substance Abuse and Mental Health Services Administration, 10% of America’s workers are dependent on one substance or another. The nation is still battling the biggest drug scourge: opioid and fentanyl. Provisional data from CDC's National...

read more
HRA Gym Cost Reimbursement? Not So Fast Says IRS

HRA Gym Cost Reimbursement? Not So Fast Says IRS

The IRS has issued a new bulletin, reminding Americans that funds in tax-advantaged medical savings accounts cannot be used to pay for general health and wellness expenses. The bulletin focuses on medical savings accounts that employers will often sponsor, including...

read more
2025 HSA Contribution, HDHP Cost-Sharing Limits

2025 HSA Contribution, HDHP Cost-Sharing Limits

The IRS has announced significantly higher health savings account contribution limits for 2025, with the amount increasing 3.6% for individual HSA plans. The IRS updates this amount annually, along with minimum deductibles as well as the out-of-pocket maximums for...

read more