Cell therapies and gene therapies have brought life-altering treatments and heart-stopping prices. The market for CAR T-cell therapy alone is expected to grow from $12.87 billion in 2025 to $108 billion by 2033 in just the United States, which represents about a quarter of global sales. And while conventional drug pricing models suggest that multiple entrants drive prices down, every new cell or gene therapy coming to market has been priced higher than the last entrant.

“We need a way to pay for these new therapies,” said ASTCT President Corey Cutler, MD, MPH, director of the Adult Stem Cell Transplantation Program at Dana-Farber Cancer Institute and associate professor of medicine at Harvard Medical School. “Insurers are being asked to pay today for benefits promised in the future.”

Cutler moderated the Feb. 13 session Plenary: Economics of Novel Cell and Gene Therapies.

Cell and gene therapy pricing is driven by market forces, explained David Rind, MD, MSc, chief medical officer for the Institute for Clinical and Economic Review (ICER). New gene therapies are entering the market at up to $4 million. Cost is an obvious consideration, but the bigger problem is a mismatch between buyer, the patient, and payer, a private or public insurer.

“The person who is buying the product is not the person who is paying for it,” Rind explained.

ICER assesses drug pricing based on value for dollars spent or health and societal benefits versus costs to patients, providers, health systems, and society.

Quality-adjusted life year (QALY) is one typical measure. The cost per additional QALY can be an effective tool to compare treatments. ICER also uses cost per equal value of life years gained (evLYG) to assess the cost consequences of a treatment such as the expense of preventing one hospitalization or death.

Most new U.S. drug therapies are not cost effective by those measures, and many are vastly overpriced, Rind noted. As examples, he said tafamidis for transthyretin amyloid cardiomyopathy (ATTR-CM) might be worth as much as $39,000 per year but costs $195,000, and ensifentrine for chronic obstructive pulmonary disease (COPD) might be worth $12,700 annually yet costs $35,400.

Within these high price points, some gene therapies are more fairly priced, based on ICER values. Rind listed the following:

• Casgevy for sickle cell disease (SCD) costs $2.2 million, while ICER values treatment at up to $2.05 million. Lyfgenia, also used to treat SCD, is priced at $3.1 million and exceeds Casgevy’s $2.05 million ICER value.
• Zolgensma for spinal muscular atrophy is considered fairly priced at $2.1 million.
• Lenmeldy for early-onset metachromatic leukodystrophy should cost no more than $3.9 million, according to ICER, and is priced at $4.25 million.
• Elevidys for Duchenne muscular dystrophy ranks as highly overpriced at $3.2 million.

“ICER’s goal is a grand bargain where fair pricing by manufacturers leads to fair access by payers,” Rind said. “Every report we do, somebody is unhappy.”

Who actually pays for cell and gene therapy depends largely on the drug and the target population. The federal government has tremendous exposure to SCD.

“Science has advanced, but many people have not been able to access the products because of cost,” said Kamal Menghrajani, MD, MS, former assistant director of the White House Office of Science and Technology Policy. “We need to ensure access to all who need and can benefit (from gene therapy).”

SCD affects about 100,000 individuals in the United States, 60% of whom are enrolled in Medicaid. The U.S. healthcare system spends about $2.98 billion annually on SCD, primarily through federal Medicaid funding.

Approval of Casgevy and Lyfgenia spurred the Center for Medicare & Medicaid Innovation (CMMI) to develop the Cell and Gene Therapy (CGT) Access Model to improve care and control spending.

CMS, the Centers for Medicare & Medicaid Services, negotiates prices with manufacturers on behalf of states. Payment is based on specific outcome measures. The model is intended to improve access to transformative CGT, reduce long-term health care utilization and spending, and improve patient health outcomes.

States and manufacturers have agreed to participate, and CMMI has developed outcome measures. States are already submitting applications, Menghrajani said, and CMS is slated to review applications and begin funding awards later this year.

“This is a demonstration model, and if it works, we can roll it out to all state programs,” she said.

Private payers have their own problems with cell and gene therapies.

It’s not the dollar amount that is worrisome, explained Robby Kerr, chief product officer, Tokio Marine HCC, a stop-loss insurance company that insures other insurance carriers. CAR T-cell therapy claims routinely run to the high six and seven figures and are not considered catastrophic.

The business of insurance is based on understanding and managing risk, Kerr said, and the industry has the experience to assess the risks inherent in CAR T-cell therapy and price premiums accordingly.

Cell and gene therapies are so new and so varied that no one knows the risks. Some may extend decades for childhood therapies that promise to transform early death into near-normal life expectancy. 

Tokio Marine has had 12 cell and gene therapy claims in the last five years, Kerr reported. One claim in each of the last three years topped $7.5 million.

“These are the new claims that are coming to us,” he said. “They are coming at us very quickly, and we are all concerned about how we are going to pay for all this.”

This and other sessions at the 2025 Tandem Meetings | Transplantation & Cellular Therapy Meetings of ASTCT® and CIBMTR® will be available for on-demand viewing for registered attendees following the live presentation.