A Surge in Gene and Cell Therapies Raises Financing Questions

A Surge in Gene and Cell Therapies Raises Financing Questions
November 3, 2023 21 mins

A Surge in Gene and Cell Therapies Raises Financing Questions

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Gene and cell therapies represent breakthrough advances in medicine, but they also have significant costs and potential risks for patients, employers, insurers, governments and manufacturers.

Key Takeaways
  1. Assessing the financial sustainability of GCTs needs careful consideration. New agreements and shared risk options offer more solutions.
  2. Affordable and safe treatment for patients should be widely accessible - yet regional variance does exist depending on financing options or healthcare financing strategies.
  3. While the durability of different GCTs is often still uncertain, data and analytics provide confidence to make the right decisions.

Better Informed

Gene therapy and cell therapy (GCT) are fields of biomedical research with the same aim: to help prevent or treat diseases. Gene therapy involves the transfer of genetic material and cell therapy involves the transfer of cells. The future of gene and cell therapies is remarkably promising, as these transformative new treatments can provide life-changing results for patients with previously incurable diseases. However, the high cost and complexity of many GCTs present growing challenges for the healthcare ecosystem that, if not addressed, will hinder access for patients in need and potentially stifle industry innovation.

Estimates of future GCT market spend vary widely, as many specifics remain unknown regarding how therapy approvals and patient adoption will ramp up. However, the consensus remains that this space will see exponential expansion — even the most conservative projections suggest annual spend will exceed $30 billion1 within the next ten years, with some estimates more than double that amount. This rapid industry growth is raising key concerns among employers, insurers, governments and manufacturers, including:

  • How are these treatments being financed and what is the return on investment for those financing the therapies?
  • What does the availability of these drugs mean for employees and their families?
  • What’s the long-term durability of these treatments?

Gene therapies alter the genes of patients, making them different from many other healthcare treatments. They apply to a limited population size, have uncertain outcomes and materially significant costs for one-time treatments. As GCTs continue to enter the market, it’s important for all stakeholders to consider these questions from a data-led perspective.

Better Decisions

How Affordable are Gene and Cell Therapies Across Regions?

As treatments advance, money has poured into the gene and cell therapy market globally over the last few years. This has resulted in numerous clinical studies and questions around developing guidelines for these products. Regulatory and legislative rules specific to GCTs have also been evolving with the treatments themselves. The risk of high costs and uncertain outcomes is on the minds of many stakeholders — including governments — with robust pricing and reimbursement policies. Alongside these shared costs, accessibility to innovative therapies is expanding for patients. Even in wealthy nations, the cost of the therapies takes its toll, challenging the budgets of health systems.

Here are some of the implications for select countries and regions:

  • United States
    • In the U.S., the onus is shared between the employers and the government to take on the costs of GCTs. Large global health insurers and reinsurers have told us that they associate their longevity as market leaders with being dependent on finding a solution to the funding challenge created by new therapies.
    • As new therapies are approved, reinsurance premiums rise. However, there may not be enough capacity to cover all new and approved therapies. Some risks are widely known and coverage for these exposures is being placed on health insurers or the employer. And when it comes to issues like babies born with genetic disorders that can be cured by these cutting-edge treatments, neither payers nor employers want to deny life-saving treatments to employees and their families.
    • Employers need to decide if this is something they can cover as a blanket policy — either there is full coverage or not, and changing a policy based on how many employees need treatment at any given time is not possible.
    • Manufacturers are keen to understand barriers that insurers are facing. They can then provide reimbursement for GCTs by collaborating with payers to explore different access pathways to help patients receive treatment. One such option is an outcome-based agreement (OBA), which helps address payer uncertainty in the face of such high-cost, high-risk therapies — especially when approvals can take years. By using an OBA, payers and manufacturers agree to specific performance and outcome metrics with significantly flexible frameworks to meet all defined criteria. The cost of the therapies or treatments depends on their real-world effectiveness.
    • Such tailored approaches offer reimbursement with shared risk warrantieson certain treatments. This is a type of money-back guarantee if a patient needs to discontinue treatment for clinical reasons.
  • Europe
    • The European Commission has authorized 25 gene and cell therapies as of September 2023.More data is needed to demonstrate efficacy and justify treatment costs. Finding a price that is both affordable to payers and profitable to companies has been a considerable challenge.
    • The EU Health Technology Assessment (HTA) was created by the European Commission to help countries in the EU determine efficacy and decide on pricing and reimbursement for payers.4
    • There has been recent backlash against the cost burden of GCTs, with failed negotiations and subsequent exits from the EU market by drug companies offering therapies over $1 million.This could ultimately cut up to 40 percent of gene and cell therapy sales.
    • HTA regulations state that by 2025,all GCTs will be subjected to a single assessment to serve as the basis for national value appraisals for health systems and patients so duplications and discrepancies can be avoided. These recommendations will be used by payers during pricing talks with manufacturers. Costs are expected to be covered by the public system.
  • United Kingdom
    • The UK has played a major role in developing GCTs. As of 2022, 13 gene therapies have been approved.Substantial government support that recognizes the value of treatments and their impact on wider societyhas led to marked success in innovation and research.
    • Since the Brexit referendum, the UK no longer participates in the EU legislative process, and the National Health Service (NHS) is the sole payer of GCTs across the country. Steep initial costs and uncertain outcome data pose challenges to GCTs9 in evaluation and reimbursement.
    • While there is no easy solution, there are potential measures that the government, manufacturers and the NHS could consider. These include clearer procedures and earlier price negotiations to create reimbursement plans that stand a better chance10 of being accepted by the health service.
  • Asia-Pacific
    • China is a very active market11 for GCTs, with numerous clinical trials taking place. The industry is considered one of government’s strategic priorities. Manufacturers have been exploring new ways to fund therapies through commercial health insurance policies, innovative financing solutions and outcome-based agreements similar to the U.S. market.
    • As of last year, there were 153 clinical trials and nine approved gene therapies in Australia, with strong indicators for accelerated gene therapy growth. The FDA expects 10-20 new approvals annually by 2025, with estimates of AU$120 billion12 in the global market by 2035. Australia is set to gain approximately AU$6 billion in revenue, earlier access to new treatments and the creation of 6,000 new jobs.
How Accessible are Life-Saving Therapies to Individuals?

In regions with government-funded therapies, evolving payment models are being investigated by healthcare providers and industry to find a balance between cost-effectiveness, risk and sustainability. As more patients qualify for these treatments, the pressure on healthcare budgets increases. Such models will widen accessibility so more patients can secure access to and benefit from GCTs.

Quote icon

Those suffering with life-threatening diseases have already faced hardship and disease burden, so it’s important for patients in the U.S. to carefully think through their benefit and financing offerings.

Tasha Barbour
Managing Director, Reinsurance Solutions, North America

Employers also need to be sensitive in their communication strategies to help connect employees with these life-changing treatments. The FDA predicts that by 2025, they will review and approve 10-20 gene and cell therapies per year. The need for establishing detailed plans and careful guidance now is paramount.

While there has been focus on the enormous cost of therapies, it’s also important to recognize the cost savings from patients that don’t need long-term care to manage their diseases. Fewer patients would require multiple expensive treatments throughout their lives, and care costs, including equipment and medical support, could be dramatically reduced. Healthier patients are less likely to need access to emergency care or be affected by co-morbidities that require further ongoing treatment.

What is the Long-Term Durability of Gene and Cell Therapies?

Gene and cell therapies are designed to prevent, treat and potentially cure disease, with expensive treatments priced to last a lifetime. The financial implications of these one-time treatments should be weighed against that of lifetime drug therapies. These also carry a large cost burden, and their efficacy is questionable. “While data is continuously being collected, GCTs are so new that it is still uncertain how effective they are during the course of a person's entire lifespan,” says Anne-Christine Fischer, Global Life Sciences Consulting Leader, Commercial Risk Solutions. “As long-term clinical data improves and becomes less inconsistent, the efficacy and durability of treatments will become clearer.”

Rigorous data and analytics allow for better risk identification and stratification, and the sharing of data facilitates improved business planning and better decision making. Aon monitors pending GCT developments, including FDA approvals, incident rates, pending pipelines and estimated costs. Using our data and analytics and that of third-party providers, we can support employers, health plans and health providers to help determine which of their eligible employees might benefit from available therapies and provide a cost estimate.

Differentiated by our strong relationships across the healthcare ecosystem — including pharmaceutical manufacturers, health plans, employers, reinsurance carriers and providers — we provide guidance for clients to effectively navigate the rapidly evolving landscape as additional therapies come to market.


By 2025 the FDA says it will review and approve 10-20 gene and cell therapies per year.

Aon’s Thought Leaders
  • Doug Melton
    Head of Global Client Analytics, Human Capital
  • Anne-Christine Fischer
    Global Life Sciences Consulting Leader, Commercial Risk Solutions
  • Tasha Barbour
    Managing Director, Reinsurance Solutions, North America
  • Jimmy Hussey
    Principal Consultant, Life Sciences Industry Practice Group, Commercial Risk Solutions Europe, the Middle East and Africa

1 Precedence Research
2 Pfizer launches rebate program for rare disease patients who have to stop taking Panzyga
3 Can Europe afford the next generation of medicines?
4 Regulation on Health Technology Assessment
5 EU payment fight could cut 40% from gene therapy sales
6 European Benefit Assessment: Creating Synergies – Harnessing Opportunities
7 Gene, Cell & RNA Therapy Landscape: Q4 2022 Quarterly Data Report
8 NHS Genomic Medicine Service
9 Ensuring patient access to cell and gene therapies: The case for an innovative payment model
10 Cost and availability of novel cell and gene therapies - PMC (nih.gov)
11 Advancement of Cell Therapy in China – Challenges and Opportunities in 2023
12 Clinical gene technology in Australia: building on solid foundations


Gene Therapy Market Size, Growth, Trends, Report 2022-2030 (precedenceresearch.com)
Pfizer launches rebate program for rare disease patients who have to stop taking Panzyga – Endpoints News (endpts.com)
Can Europe afford the next generation of medicines? – POLITICO
Regulation on Health Technology Assessment (europa.eu)
EU payment fight could cut 40% from gene therapy sales | Insights | Bloomberg Professional Services
EU-HTA complements approval of medicines | vfa
Cell, Gene, & RNA Therapy Landscape (asgct.org)
NHS England » NHS Genomic Medicine Service
Ensuring-patient-access-to-cell-and-gene-therapies-The-case-for-an-innovative-payment-model.pdf (bioindustry.org)
Cost and availability of novel cell and gene therapies - PMC (nih.gov)
Clinical gene technology in Australia: building on solid foundations | The Medical Journal of Australia (mja.com.au)
The uncertainties and benefits of gene and cell therapies: A payers dilemma (milliman.com)
NHS Genomic Medicine Service | Genomics England
The EU HTA regulation: a new frontier for access to innovative technologies (europeanpharmaceuticalreview.com)
The Implications Of The New EU HTA Regulation For Companies (eucope.org)
Frontiers of CGT in China (simon-kucher.com)
Cell And Gene Therapy Manufacturing Market Growth Analysis, Trends and Forecast 2021-2030 (visionresearchreports.com)
The Cell And Gene Therapy Sector In 2023: A Wave Is Coming – Are We Ready? : In Vivo (citeline.com)

General Disclaimer

This document is not intended to address any specific situation or to provide legal, regulatory, financial, or other advice. While care has been taken in the production of this document, Aon does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the document or any part of it and can accept no liability for any loss incurred in any way by any person who may rely on it. Any recipient shall be responsible for the use to which it puts this document. This document has been compiled using information available to us up to its date of publication and is subject to any qualifications made in the document.

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