Cell and Gene Therapy Financing: Moving From Discussion to Action

Key Takeaways

• Cell and gene therapies can deliver decades of clinical value but carry substantial upfront costs, creating affordability challenges that traditional annual insurance models were not designed to address.

• Employers, benefit experts, and industry stakeholders have recognized these financing challenges for decades and have explored alternative approaches to specialty drug coverage and risk management.

• Sustainable long-term financing models already exist, but broader adoption will require manufacturers, employers, and insurers to move beyond traditional approaches and embrace new risk pathways.

A recent article published in STAT argues that gene therapies, which can cost $2 million or more per patient, have decades of value in a single intervention. However, the US health care system needs a new approach, specifically a financing model, to cover the costs for this treatment.¹

Industry experts have been warning about this issue for nearly 3 decades, and it has become urgent due to the accelerating growth in novel therapies and better outcomes. Sadly, manufacturers and policy strategists may have woken up too late to prevent the pain for 2027.

Decades of Attention to Specialty Drug Affordability

The affordability of specialty drugs was already a frequent topic of discussion under benefit design and financing at many conferences, including the Academy of Managed Care Pharmacy (AMCP), the International Society for Pharmacoeconomics and Outcomes Research (ISPOR), and the International Foundation of Employee Benefit Plans. Benefit consultants and business groups involved in health care increasingly interacted inside and outside of these conferences discussing these topics. In addition, subsequent plan sponsor perspective books and e-learning programs were developed and sold, which are still referred to today.²

Early on in the development of cell and gene therapy, benefit planning issues emerged. As a result, the Chicago-based regional employer group Midwest Business Group on Health (MBGH) and the Institute for Integrated Healthcare (IIH) held several joint speaker programs with employers, manufacturers, and third-party administrators beginning in 2009. While some clinical aspects were briefly presented, the speakers focused on the coverage and affordability aspects of these novel therapies entering the marketplace. Later, the 2 groups formalized joint conferences on specialty pharmacy and cell and gene therapy in 2011. Those earlier MBGH-IIH conferences led to a landmark publication in late 2017 about the key role of employers in benefit strategies and the economic implications of their decisions.³

Moving From Recognition to Financial Innovation

Based on the lack of change in the market, a risk innovation firm named T5 Advisors developed new care delivery and financing models just before the pandemic. The models focused on dealing with the economic implications of financing specialty medication that had not previously been addressed by government or commercial plan sponsors. T5 Advisors have continued to refine their efforts through conversations with employer plans, manufacturers, and the Center for Medicare and Medicaid Innovation (CMMI).

Ironically, a solution has existed to finance cell and gene therapy products but the marketplace, especially manufacturers, has not been ready to embrace it. William Padula noted this in the aforementioned STAT article.¹ Previous articles in the Journal of Clinical Pathways also address many of the solutions that employers or providers have been discussing for years.^4-6 In addition, many of these concepts are discussed in an updated e-book on benefits for specialty drugs.⁷

A New Risk Pathway for Long-Tem Value

As mentioned by Padula, effective risk financing at the primary level is difficult to change or implement. Financing changes take time to implement and run into the insurance timelines for primary coverage on an annual basis.¹ One solution is to manage the 12- to 18-month decision-making cycle through a different risk pathway for long-term exposure. While such an approach is not typically amenable for Medicaid, for commercial and Medicare plans it could be implemented quickly, with a long-term goal of being scalable internationally. For rare disease or individual outliers, this can become a game changer for all commercial or Medicare plans within a reasonable fiscal cycle.

Experts have been advocating for a long-term financial model that is coupled with evidence-driven patient-centered pathways to optimize affordability and care outcomes. The need identified by Padula has a solution: viable approaches to financing these therapies already exist and can be scaled for an international marketplace. The remaining challenge is not whether such models are possible, but whether manufacturers, employers, or insurers have sufficient incentive to move beyond traditional approaches and embrace them. As the clinical promise and financial impact of cell and gene therapies continue to grow, the time for that transition may no longer be on the horizon—it may have arrived.

References

1. Padula WV. $2 million gene therapy cures require a financing model. STAT. Published June 8, 2026. Accessed August 17, 2026. https://www.statnews.com/2026/06/08/financing-gene-therapies-cures-cost/

2. Vogenberg FR. Pharmacy Benefits: Plan Design and Management. International Foundation of Employee Benefit Plans; 2011.

3. Larson C, Jung A, Ross T, Vogenberg FR. Drawing a Line in the Sand: Employers Must Rethink Pharmacy Benefit Strategies. Midwest Business Group on Health. Report. November 2017. Accessed June 24, 2026. https://higherlogicdownload.s3.amazonaws.com/MBGH/4f7f512a-e946-4060-9575-b27c65545cb8/UploadedImages/Specialty%20Pharmacy/DMJ_MBGH_Line_in_the_Sand_RV12_9617.pdf

4. Vogenberg FR, Sood R. Business trends shaping the future of clinical pathways. J Clin Pathways. 2025;11(1):62-64.

5. Vogenberg FR, Warren J, Roe A. Pathways, affordability, and utilization for precision therapies. J Clin Pathways. 2024;10(3):62-64.

6. Vogenberg FR, Roe A. Gene and cell therapies: changing employer plans to optimize patient outcomes. J Clin Pathways. 2023;9(4):13-14.

7. Vogenberg FR. Integrated Pharmacy Benefits for Specialty Pharmaceuticals: Access and Management. 2nd ed. Institute for Integrated Healthcare; April 2023.