CREATING THE CASE FOR MEDICAL INNOVATION
An early-stage gene therapy company is developing a gene vector for use in treating a chronic neurological disease. The gene vector is administered with a specific surgical procedure requiring an inpatient stay. Company executives were seeking investment to underwrite its costly clinical development program. But potential investors were unclear about how this gene therapy would be reimbursed, given the vector’s uniqueness, its prospective pricing, the route of administration and the site of service.
We conducted an analysis that considered multiple factors:
• How payers would develop coverage for the targeted patient audience, given the unmet medical need.
• How the procedure and gene vector would be coded in the new ICD-10-PCS system.
• How the therapy maps to an MS-DRG, to determine if the new code system could describe the novel route of administration, and understand what kind of impact the product cost would have on MS-DRG payment.
After conducting primary research with payers, and secondary research with reliable information sources, we discovered that coding is not expected to pose a barrier to entry. However, we exposed a significant risk to coverage – there’s a critical need to educate payers about gene therapy safety and effectiveness. We also identified vital actions the company must pursue with payers and hospital customers to secure preferred payment.
We created a fact-based rationale that helped the company conduct productive discussions with investors. Also, we identified specific clinical and cost-related data that must be collected during clinical development and trials to support payer coverage and hospital adoption. Potential investors are now focused on how their funds link to a clinical program that supports both regulatory and reimbursement goals.
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