Innovative Contracting for Gene Therapies: Current Landscape and Perspectives on the Future of Gene Therapy Financing in the USA

Abstract

Background and Objective

Over the last decade, payers in the USA have been exploring novel financing mechanisms for gene therapies (GTs). Our research objective was to assess the landscape of innovative contracts (ICs) between payers and manufacturers for GTs and identify barriers and opportunities for future contract development and implementation.

Methods

We used a multi-method approach including a targeted literature review and interviews. We developed a framework defining ‘innovative contracts’ as agreements using real-world outcomes that link to the total price paid for gene therapy, encompassing value-based pricing, outcome-based payments, and performance-based models between payers and manufacturers. We searched for published information about implementation of ICs for GTs in PubMed and government, industry, and research institutions from January 2014 to January 2025. We excluded any insights specific to ICs for non-GTs as well as those relevant to ex-US markets. We supplemented these findings with bibliographic searches. Semi-structured interviews with payers, manufacturers, and other diverse representatives from the GT financing ecosystem were conducted to validate and enrich the literature findings.

Results

The PubMed search yielded ten studies relevant to implementation of ICs. Gray literature included over 50 publications referencing active contracts, policy solutions, payer budget impact, and state Medicaid programs’ innovative GT contracting. Information on manufacturer and payer contracts was publicly available for 10 of 14 gene therapies (71%). Of 16 identified GT contracts, eight used upfront payments with milestone-based rebates, two used performance-based installment payments, one offered upfront payment with a rebate or payment over 5 years, and five do not have publicly available details on the type of financial arrangement. Interviews (N = 15) suggested that barriers to ICs include a lack of mutual trust between payers and manufacturers, lack of data conveying the return on investment for innovative contracts, lack of a sufficient incentive for stakeholders to engage in contracting, perceived regulatory limitations (e.g., implications of Medicaid Best Price), and patient portability challenges. Some interviewees believed that ICs should be the standard for GTs, while others stated that ICs should only be pursued when they are expected to have a significant impact on timely patient access in the early launch period when payers are considering limited or no coverage. Interviewees indicated that policy changes may encourage future contracting negotiation and implementation.

Conclusions

Widespread uptake of ICs will require a multi-stakeholder collaboration to overcome common barriers, as a one-size-fits-all approach is insufficient for diverse stakeholder needs. Establishing industry-wide contracting principles and practices may help bridge differences in opinions and build trust between contracting parties, allow stakeholders to share lessons from early adopters, and support efficient contracting processes that promote consistent and equitable patient access to GTs while ensuring healthcare system sustainability.

Key Points for Decision Makers

Of currently approved gene therapies, there are 16 contracts with publicly available information including upfront payments with milestone-based rebates, performance-based installment payments, upfront payment with a rebate or payment over 5 years, and five with unknown specifics about the financial arrangement.

Barriers to widespread adoption include a lack of mutual trust between payers and manufacturers, a lack of data conveying the return on investment for innovative contracts, a lack of sufficient incentive for stakeholders to engage in contracting, perceived regulatory limitations, and patient portability challenges.

One potential solution is the development of industry-wide principles and best practices for innovative contracting for gene therapies.

Introduction

Gene therapies (GTs) use genetic material or modify the genetic material of a cell to treat hereditary diseases. These therapies have the potential to reshape treatment paradigms for one-time, potentially curative interventions. There are 14 approved GT products in the USA as of May 2025, with a robust pipeline of candidates across various therapeutic areas, including oncology, hematology, and rare genetic disorders [1, 3]. In June 2025, the US Food and Drug Administration (FDA) announced a Commissioner’s National Priority Voucher program to shorten the FDA review time for “innovative cures,” which could further accelerate the number of GT approvals in the coming years [4].

Accessing GTs can be a lengthy and challenging process for patients, as payers, providers, employers, and manufacturers determine how to develop and implement processes and financing for the appropriate use of these therapies [5]. Gene therapies differ significantly from traditional treatments; they usually target small patient populations, often have high one-time costs, and offer the potential to be curative, all of which present unique challenges for traditional payment and reimbursement models [6].

Innovative contracts (ICs) between manufacturers and payers present a promising solution to these financing challenges. These contracts, which began to emerge in 2017 with a “first-of-its-kind” value-based purchasing arrangement for the first FDA-approved gene therapy [7, 8], are designed to align payment with therapeutic outcomes and mitigate risks [10]. Innovative contracts are defined in this context as agreements that incorporate value-based pricing, outcome-based payments, and/or other mechanisms that differ from traditional contracting models.

This paper explores the current landscape of ICs for GTs between manufacturers and payers in the USA as of May 2025. Although ICs may be relevant for certain cell therapies, which involve transplanting whole cells to repair or replace damaged tissues, this research focused on GTs, given that they currently encompass most publicly announced ICs. By examining the practices of and perspectives on ICs for GTs, this paper contributes to the ongoing discussion on sustainable financing models that support equitable access to these transformative therapies. While other approaches are relevant to paying for GTs (e.g., subscription models, stop-loss insurance, third-party management), this paper focuses on financing GTs through ICs between manufacturers and payers.

Methods

This landscape assessment used a multi-method approach to answer key research questions (see Table 1 for a list of research questions), including a literature review and interviews. We defined “innovative contracts” as those that use real-world outcomes to determine the total price paid for the GT. This definition encompasses multiple contracting models (e.g., rebates, warranties, performance designs) and terminologies (e.g., value, outcome, risk) that connect outcomes to price. The scope was limited to contracts between payers and manufacturers.

Table 1.

Research questions

• What is the current landscape of value-based arrangements and innovative contracts for gene therapies (GTs) between pharmaceutical manufacturers and payers?

• What types of value-based arrangements and innovative contracts are currently being implemented in the field of GTs?

• What specific measures or outcomes are incorporated within these innovative contracts, both in terms of clinical and financial structures?

• What are the essential components that constitute innovative contracts for GTs?

• In what ways is payment linked to quality outcomes in the identified contracts?

• Which entities have entered into innovative contracts for GTs?

• Who are the principal stakeholders involved in the innovative contracting process for GTs?

• What are the barriers to implementing value-based arrangements and innovative contracts for GTs?

• What are the benefits and drawbacks associated with employing value-based arrangements and innovative contracts for GTs?

• What are the best practices for executing value-based arrangements and innovative contracts in the context of GTs?

• How can value-based arrangements and innovative contracts be designed to address uncertainties and the high costs associated with GTs?

• In what ways can innovative contracting models be structured to address health equity concerns and reduce disparities in access to GTs for underserved populations?

• How have innovative contracts for GTs evolved over time?

• How can innovative contracts for GTs be structured to incentivize manufacturers to develop high-quality GTs while mitigating financial risk for payers?

GTs gene therapies

The literature review focused on identifying publicly available information on the current landscape of and future perspectives on GT financing and included two phases. As a first step, a targeted search of PubMed in January 2025 identified peer-reviewed articles published since 2014 related to ICs and financing models for GTs, using the following search string: (“cell therapy” OR “gene therapy” OR “cell and gene therapy”) AND (“value-based arrangement” OR “value-based agreement” OR “value-based contract*” OR “outcomes-based arrangement” OR “outcomes-based agreement” OR “outcomes-based contract*” OR “performance-based arrangement” OR “performance-based agreement” OR “performance-based contract*” OR “innovative contracting” OR “risk-based arrangement” OR “risk-based agreement” OR “risk-sharing arrangement” OR “risk-sharing agreement” OR “risk-sharing contract*” OR “financial arrangement” OR “financial agreement” OR "payment model*”).

A gray literature review then identified reports and documents from industry (e.g., manufacturer press releases, PhRMA fact sheets), government agencies (e.g., FDA, CMS), and non-profit sources (e.g., ICER, NEWDIGS). From both the peer-reviewed and gray literature searches, we included sources that discussed ICs specifically for GTs in the US market. We excluded any insights specific to ICs for non-GT therapies (e.g., traditional pharmaceuticals, medical devices) as well as those relevant to ex-US markets, as contracting practices and regulatory environments differ across countries. From the initial list of relevant sources, a bibliographic search approach was employed to identify additional literature and ensure a comprehensive understanding of the subject.

To validate and enrich the desktop research findings, we conducted 15 semi-structured, 1-hour virtual interviews. Interviewees represented a diverse cross-section of the GT financing ecosystem, including manufacturers (n = 2), payers (n = 3, 2 commercial, 1 Medicaid), stop-loss/reinsurance expert (n = 1), employers (n = 2), pharmacy benefit managers (n = 2), healthcare provider (n = 1), patient advocates (n = 2), third-party contracting specialist (n = 1), and academic researcher (n = 1). Discussion guides were designed for each type of interviewee and included questions about implementation experiences, challenges, and opportunities related to ICs. Patient and provider guides had questions about preferred level of input and involvement in contracts, while other guides (e.g., payers, manufacturers, employers) inquired about direct IC involvement and experiences. Interviews provided qualitative insights that complemented the literature review, offering a holistic view of challenges and opportunities in GT financing. The research was not subject to US Department of Health and Human Services regulations for human subjects research and was therefore granted exemption from institutional review board review.

Findings

The PubMed search yielded 19 studies. Only ten met the inclusion criteria (i.e., published since 2014 and reported on active ICs for US payers) and included topics such as the value of GTs, policy solutions to overcome barriers to equitable access, GT’s impact on payers’ budgets, and case studies of state Medicaid programs’ IC efforts [11, 13–17, 20–23]. The gray literature review identified more than 50 publications (e.g., industry reports) and organizational websites with relevant information on active contracts. These reports and websites detailed pharmaceutical manufacturers’ announcements of ICs; cell and gene therapy (CGT) pipeline predictions; payer and manufacturer uptake of and preferences for certain types of ICs for GTs; and perspectives on GT risk management across payers, employers, and stop-loss insurers. Qualitative research findings further validated the literature findings and identified additional barriers and opportunities as described in the following sections.

Uptake of Innovative Contracting Approaches

Our analysis found publicly available evidence of ICs between manufacturers and payers for 10 out of 14 (71%) of FDA-approved GTs, with 16 total active ICs identified. Table 2 summarizes specific GTs with ICs between manufacturers and payers. Innovative contracts that may have previously been explored but are not currently active are not included.

Table 2.

Publicly available innovative contracts for gene therapies on the market in the USA

Product	Indication	Year	Manufacturer	Payer	Contract details
Casgevy	Sickle cell disease	2023	Vertex	State Medicaid programs via CMMI CGT Access Model [24]	The CMMI CGT Access Model is a multi-year voluntary model initiated to improve access to costly CGTs for Medicaid beneficiaries with sickle cell disease. Launched in 2024, this model aims to facilitate OBAs between states and manufacturers, thereby tying payment to treatment outcomes and making these transformative treatments more financially accessible to state Medicaid programs
Hemgenix	Hemophilia B	Future, TBD	CSL Behring	Not specified	Warranty style contract; 20–30% value-based discounts to be given in the event of poor patient response [25]
Lenmeldy	Pre- or early symptomatic metachromatic leukodystrophy	Future, TBD	Orchard Therapeutics	Undisclosed private and government insurers [26, 27]	Unspecified outcome-based and value-based agreements
Luxturna	Inherited retinal dystrophy	2018	Spark Therapeutics	Harvard Pilgrim [28]	A rebate is provided to Harvard Pilgrim if the patient outcomes fail to meet specified short-term efficacy (90 days) or long-term efficacy/durability (30 months) endpoints based on FST testing scores, measured against a patient-specific baseline
Lyfgenia	Sickle cell disease	2024	bluebird bio, Inc.	Michigan Medicaid [29]	Risk sharing is tied to VOE-related hospitalizations over 3 years
				State Medicaid programs via CMMI CGT Access Model [24]	See details above
Roctavian	Hemophilia A	Future, TBD	BioMarin Pharmaceutical	Not specified	Warranty/milestone based: 25% refund for lack of response after 3 years [25]; 4-year warranty being offered to all USA payers [30]
Vyjuvek	Wounds in patients with dystrophic epidermolysis bullosa with mutations in COL7A1 gene	Future, TBD	Krystal Biotech	Undisclosed commercial and public payers [31]	All commercial payers offered a price cap of $900,000 per patient per year to account for patients requiring large numbers of vials of treatment
Zevaskyn	Recessive dystrophic epidermolysis bullosa	2025	Abeona	TBD [32]	A partial refund (unspecified amount) is being offered to payers if patients require additional wound treatment within 3 years
Zolgensma	Spinal muscular atrophy	2022	Novartis	Colorado Medicaid [33]	A portiona of the Medicaid price is reimbursed if the drug does not deliver the promised clinical health outcomes over a 5-year period following treatment
		2020		Massachusetts Medicaid [35]
		Unspecified		Arizona Medicaid [36, 37]
		2019		Harvard Pilgrim [38]	Harvard Pilgrim can pay for the treatment over 5 years or participate in an OBA with a rebatea depending on product efficacyb
Zynteglo	Beta thalassemia	2023	bluebird bio, Inc.	Michigan Medicaid [39]	Details of general OBAs are not specified
				Massachusetts Medicaid [39]
		2022		Harvard Pilgrim [28, 40]	Harvard Pilgrim makes one upfront payment that can be paired with an OBA in which they are reimbursed up to 80% of the therapy cost if a patient fails to achieve and maintain transfusion independence up to 2 years after infusion

CGT cell and gene therapy, CMMI Center for Medicare and Medicaid Innovation, FST full-field light sensitivity threshold, OBA outcomes-based agreement, TBD to be determined, VOE vaso-occlusive event

^aQualitative finding: a 5% upfront rebate was offered for access limited to the labeled indication [source: expert insight]

^bQualitative finding: contracting discussions considered use of CHOP INTEND scores as an efficacy endpoint [source: expert insight]

Eight of 16 identified GT contracts involved upfront payments with milestone-based rebates. Two contracts involved performance-based installment payments. One manufacturer offered flexibility for an upfront payment with a rebate or payment over 5 years. Details on the type of financial arrangement were not publicly available for five contracts.

Eight identified GT contracts were between manufacturers and state Medicaid programs, three were between manufacturers and a commercial payer, and five manufacturer-reported contracts do not have publicly confirmed payer participants. All identified GT contracts are for products indicated for rare genetic disorders.

This observed uptake of publicly available ICs for GTs is supported by findings from a 2022 survey, which reported that 77%, 63%, and 50% of payer organizations (n = 30) [e.g., health plans, integrated delivery networks, pharmacy benefit managers] were currently involved in OBAs, one-time payment models, and annuity plans for GTs respectively [41]. At that time, 80%, 67%, and 47% of respondents also indicated planned involvement in each respective contract type. Only four GTs were FDA approved at the time of the survey [1, 41].

Types and Features of Innovative Manufacturer-Payer Contracts for GTs

As described above, IC approaches most commonly included upfront payment with milestone-based rebates, upfront payment with warranties, and performance-based installment payments [28]; however, these terms are not used consistently throughout the literature. Other synonymous terms were noted (e.g., OBAs, value-based contracts, performance-based annuities). For this article, each type of contract is defined below, summarizing a 2024 White Paper [28].

• Upfront payment with milestone-based rebates: Financing model in which the payer makes an initial upfront payment for the GT. The agreement includes specific milestones related to the therapy’s performance or outcomes. If these milestones are not met, the payer receives rebates.

• Upfront payment with warranties: Financing model in which the payer provides an upfront payment accompanied by a warranty from the manufacturer. The warranty ensures that if the GT does not achieve the agreed-upon outcome(s) or effectiveness within a specified period, the payer may receive compensation or additional treatments at no extra cost.

• Performance-based installment payments: Financing model in which payment for a GT is spread over a series of installments, which are tied to the performance or outcome(s) of the therapy. Payments are made based on the achievement of predefined performance metrics or health outcomes. Payments to the manufacturer are made only if the therapy delivers the expected benefits.

Table 3 highlights the advantages and disadvantages of each approach described in the paper. Building on this literature, the interviews provided additional insight into real-world perspectives on each contracting approach.

• Upfront payment with milestone-based rebates: Interviewees noted that differing definitions of GT success and failure complicate contract agreements and lengthen the contracting process. However, many believe it is possible for payers and manufacturers to agree on measurable outcomes and enhance the focus on treatment quality and efficacy. Concerns were raised that rebate models “incentivize failure,” as payers benefit only when patients do not achieve optimal outcomes. Interviewees also noted that collecting data and resolving disputes can be burdensome under this approach, and waiting for rebates requires more upfront financial risks, particularly for smaller employers. Many payers prefer immediate value through lower drug prices.

• Upfront payment with warranties: Interviewees noted that warranties can simplify contract negotiations by enabling manufacturers to establish standardized contracts. Payers often view products with warranties more favorably, seeing them as providing added security. Some contracts using this approach allow patients to recover out-of-pocket expenses, which can improve access and a patient’s willingness to try the therapy. Payers did indicate they can be skeptical of warranties because they do not have input on the outcomes defined by manufacturers, perceiving warranty style arrangements as a “take it or leave it” offer. Additionally, some payers may interpret the inclusion of a warranty as a sign that the manufacturer is not fully confident in the effectiveness or reliability of their product.

• Performance-based installment payments: Interviewees acknowledged that installment payment approaches primarily help payers afford therapies. However, most found the concept appealing but impractical, as no parties are willing to “act as the bank” for such transactions. They noted this contracting approach may not work in the USA, where payers record transactions when costs are incurred, regardless of when the money is exchanged [42]. This affects how financial transactions and risks are managed, particularly in long-term payment scenarios. Additionally, interviewees cited increased complexity with data collection and patient portability, and potential incompatibility with stop-loss insurance policies (i.e., insurance policies that protect self-insured employers from catastrophic health plan losses, limiting financial liability [43]) as disadvantages to this contracting approach.

Table 3.

Advantages and disadvantages of types of innovative manufacturer-payer contracts for GTs [28]

	Upfront payment with milestone-based rebates	Upfront payment with warranties	Performance-based installment payments
Advantages	• Less complexity involved in design and administration than contracts with installment payments	• Permitted by Medicare and Medicaid • Does not impact Medicaid Best Price in most circumstances • Reduced administrative burden on plan sponsors	• Payer is not responsible upfront for the full cost of the GT
Disadvantages	• Payer is responsible upfront for the full cost of the GT • Can be difficult to agree on meaningful and practical outcome measures, as well as the amount of money at risk and the terms of any rebate component • No financial protection for payer if the patient leaves the plan and the outcome measure(s) can no longer be tracked	• Payer is responsible upfront for the full cost of the GT • Warranty amount for incurred healthcare expenses because of treatment failure may not include a significant amount of the initial price • No financial protection for payer if the patient leaves plan and the outcome measure(s) can no longer be tracked	• Payments over time are risky from a payer accounting perspective • No financial protection for payer if patient leaves the plan and the outcome measure(s) can no longer be tracked • State Medicaid programs may be prohibited from multi-year contracts • May not be compatible with self-insured employer stop-loss contracts

GT gene therapy

Two contracting approaches were not covered in the literature but were discussed during interviews — the holdback approach and service-based agreements.

• Holdback approach: Described as a hypothetical contracting approach whereby a portion of the GT payment would be withheld from the manufacturer until the desired outcomes are achieved. One interviewee felt this approach could address concerns associated with performance-based installment payments.

• Service-based agreements: Involve a manufacturer paying a rebate if the payer agrees to deliver a specified service to their members. For example, a manufacturer may offer a 5% rebate to a payer who agrees to cover or encourage screening for Duchenne muscular dystrophy for all newborns on the plan. Interviewees shared that service-based agreements are features of broader financing arrangements, whereby service-based rebates could be offered to payers in addition to performance-based rebates. One interviewee noted that service-based agreements would be challenging for a payer to implement if they are not part of an integrated delivery network.

Role of Third-Party Contracting Organizations

Some manufacturers have begun leveraging third-party organizations (e.g., specialty pharmacies) to negotiate and execute their ICs for GTs. For example, Novartis partnered with Accredo and CuraScript, which handle specialty pharmacy and distribution, to develop its IC for Zolgensma [38]. Spark Therapeutics also involves several partners in its IC for Luxturna [44, 45]. Under Spark Therapeutics’ model, affiliates of Express Scripts (Accredo and CuraScript) will support the purchasing of Luxturna. They will also work with payers to provide coverage consistent with the FDA label, expedite benefits processing, and cap patient out-of-pocket amounts at in-network limits. Payers independently negotiate an agreement with the treatment center on reimbursement for medical care. Spark Therapeutics assumes all drug in-transit, storage, and handling risks.

As of October 2022, only 27% of payers reported experience working with a third party to administer ICs for CGTs [41]. However, 70% of payers reported they would prefer to work with a third-party administrator. Synergie Medication Collective is another example of a third-party organization involved in GT contracting [47]. As a medication contracting organization for Blue Cross Blue Shield, Synergie negotiates contracts with manufacturers of GTs on behalf of BCBS plans. Evio is a founding investor in Synergie and an example of a third-party organization that helps design and execute ICs using an online platform for data submission [48].

Payer and Manufacturer Innovative Contracting Preferences

Beyond gene therapies, several surveys of payer perspectives indicate that IC engagements have expanded rapidly in recent years. In 2017, a survey of 15 payers showed that some were just becoming familiar with GTs, while others had already begun navigating challenges of financing them. The survey reported that one third were newly aware and learning about GTs [49]. Forty percent were aware of the GT pipeline and observing its progress, while 27% were “anticipating FDA approval and incorporating new GT–projected costs into their 2018 plan premiums”. Nearly half (47%) of payers were open to innovative financing methods, including performance-based annuities and risk pooling.

A 2018–19 survey of 77 payers found that payers were covering high-cost durable therapies despite their concerns about financial risk and clinical uncertainty [49]. Payers indicated that managing financial risk associated with durable one-time treatments was a high priority. Most payers indicated that they preferred short-term performance-based approaches, expressing a desire to “only pay for therapy that works” while balancing the administrative complexity of tracking patients over time.

By 2022, a survey of 30 US payer organizations (e.g., health plans, integrated delivery networks, pharmacy benefit managers) found that more than half of respondents were currently involved in OBAs, one-time payment models, and installments/annuity plans for CGTs [34]. Respondents indicated they would be more interested in OBAs and one-time payment models and less interested in installments/annuity plans in the next 3–5 years.

The literature suggests that payers, especially large payers, generally prefer contracting approaches that involve rebates, as this aligns with their billing and accounting practices [50]. Alternatively, the installment payment approach could offer greater flexibility to smaller payers and employers who may struggle with high upfront costs. Literature also suggests that payers prefer contracts that use both clinical trial outcomes and real-world outcomes to monitor the progress and success of contracts [41]. They also prefer contracts for potentially curative therapies (i.e., one-time dose) versus multi-dose therapies and contracts that cover one versus multiple therapies.

Key elements that determine the success of ICs from the payer perspective include [41, 49]:

• inclusion of performance-based payment features;

• number and quality of outcomes measured for a disease;

• magnitude of rebates/discounts offered;

• termination of payment obligation upon death of the patient;

• access to data for specific measures;

• length of contract and number of years over which payers are eligible for payments.

From the manufacturer perspective, multi-year performance-based contracts and subscription models (i.e., models that pool covered lives, allowing payers to pay a small per-member per-month fee for GT coverage [28]) are the most and least preferred alternative CGT financing approaches, respectively [18]. Manufacturers also prefer to use third-party vendor assistance to execute agreements.

Manufacturers’ top motivations for pursuing ICs for CGTs include [18]:

• streamline patient access;

• mitigate or reduce budget impact;

• reduce product uncertainties;

• payer interest or request.

Barriers to Engaging in Innovative Contracts for GTs

As each GT treats a unique population with different ideal outcomes, interviewees feel that no “one-size-fits-all” model will address the diverse needs and objectives of all stakeholders [28, 51]. Given the need to tailor each contract to varying stakeholder priorities for each GT, barriers to ICs may arise during each phase of contract negotiation and implementation, as summarized in Fig. 1. Some challenges are overcome through creative contract solutions and design, while other barriers prevent payers and manufacturers from entering into agreements. This research identified the following common barriers that stakeholders face in ICs.

Fig. 1.

Common barriers to innovative contracting. FDA Food and Drug Administration, GT gene therapy, ROI return on investment

Lack of Incentives to Engage in Innovative Contracting

From both payer and manufacturer perspectives, ICs can be resource intensive because of complex terms, time needed to identify outcome targets, and the administrative burden of design and implementation. Interviews highlighted that manufacturers have less motivation to pursue ICs to expand access in cases where the GT is included in traditional insurance coverage. Additionally, interviewees noted that without a competing GT, manufacturers have less incentive to engage in ICs.

From a payer perspective, payers that can absorb upfront costs have low incentive to seek ICs. For plans anticipating that few to no members would be eligible for a GT, the administrative burden of designing and executing contracts may be greater than potential savings through ICs. This is particularly true for small-size and mid-size employer plans. In addition, administration may require technical expertise that a payer does not have. In some cases, payers decline to pursue coverage for GTs when there is a lack of sufficient safety and efficacy evidence (e.g., fast-track designation, accelerated approval pathway), the contract is misaligned with stop-loss insurance policies, or when built-in discounts for Medicaid may be more favorable than an IC.

Manufacturer and Payer Alignment

Manufacturers and payers have distinct contracting interests and must establish trust with each other to initiate contract negotiations. An initial challenge can relate to which party should initiate contracting negotiations; some payers believe that manufacturers should initiate IC negotiations, whereas some manufacturers hesitate to initiate them without a payer signaling an interest and willingness to engage in discussions. Interviewees noted that payers and manufacturers may perceive each other as inflexible and only willing to select outcomes most favorable to their own interests. As a result, ICs may not proceed past the initial discussion phase.

Another key area for alignment is determining the appropriate financial risk level. Payer discussions revealed that some payers feel they have limited leverage in negotiating risk, leading some to forgo ICs in favor of traditional price discounts for GTs. Payers interviewed expressed different expectations related to rebates: some noted that payers expect to receive rebates, while others see rebates as evidence of a manufacturer’s lack of confidence in the therapy’s efficacy.

Data Collection

Interviewees noted that designing ICs also requires aligning on data collection and contract duration. The central challenge is that GTs’ potential curative promise creates a timing mismatch: meaningful outcomes may take years to manifest, yet contracts need measurable results within practical timeframes without imposing excessive data collection burdens.

Once an IC is executed, data collection requires infrastructure, resources, and personnel to track real-world outcomes. Collecting data for outcome measures is often challenging owing to the long-term follow-up required after administration of a GT and because clinical trial efficacy data are not routinely collected in real-world practice. Innovative contracts typically require data beyond standard claims and may place the burden of additional data collection on providers without corresponding resources or financial incentives to cover these costs. Interviewees identified laboratory results and patient-reported outcomes as ideal sources of data that can be burdensome to collect.

Patient Portability

A major barrier cited in the literature [52] and discussed at length during interviews is patient portability, which is described as the potential for a patient to leave a health plan before the contract terms are fulfilled, preventing payers from collecting data for the full duration of a contract and capturing the expected long-term cost savings from the treatment. Even when contracts allow data collection after patients leave the health plan, securing patient consent for continued access complicates long-term data collection. Interviewees emphasized that for employers, the average tenure of employees may impact their decision about ICs; employers with an average tenure of 1 year may be less likely to pursue long-term contracts than those with longer tenured workforces.

Perception of Regulatory Barriers

Though some policies have evolved in recent years to overcome regulatory barriers to ICs, some interviewees identified regulatory policies as disincentives. In the past, some manufacturers hesitated to enter ICs because of Medicaid Best Price regulations. Despite recent refinements to the Medicaid Best Price regulations to allow for multiple best prices to be reported for value-based performance arrangements, the literature and interviewees cited uncertainty around how a single-case agreement could have undesirable impacts on the manufacturer’s best price reporting [28]. Furthermore, ICs must be structured to include outcome measures that are aligned with the GT’s approved labeling [53], which restricts the ability to include outcome measures that may be a priority to patients in real-world settings but were not part of the original clinical trial and product approval.

Engaging Other Stakeholders in Contracts and Contracting

Interviewees shared perspectives on the role of healthcare providers in ICs for GTs. They noted that providers may be able to offer perspectives on relevant endpoints to consider during contract negotiation (e.g., clinical trial outcomes). They emphasized that providers play an important role in assessing the relevance of clinical events to a therapy’s efficacy when deciding whether an event might trigger reimbursement to a payer as part of a contract. For example, some symptoms or patient outcomes may not be directly related to the efficacy or durability of a GT, but their appearance may suggest to a payer that the therapy lacked efficacy. Specialist committees can review cases in such situations to determine which clinical events following therapy are related to treatment and which are attributed to an individual’s medical condition. One interviewee shared that providers generally do not want to be involved in ICs because of concerns about extra work, additional data tracking requirements, and potential reimbursement delays. Interviewees had mixed opinions about the level of involvement providers should have during IC negotiation or execution; some felt that providers could participate in panels that assess clinical outcomes to determine the efficacy of GT, while others disagreed with provider involvement in the adjudication process. Interviewees also expressed concerns about adding any additional administrative burden to a provider’s workload without reimbursement, especially when a contract utilized data collection beyond standard medical or pharmacy claims data.

Some interviewees indicated that neither patients nor their caregivers are directly involved in design of ICs for GTs (e.g., selection of outcomes for use in contracts). Interviewees were also divided as to whether patients and/or their caregivers should have a role in ICs. Some felt that patient perspectives may be too subjective to offer valuable input to the contracting process. One interviewee emphasized the importance of patient-centered contracting approaches and the need to consider the perspectives of patients who are most likely to face barriers in accessing care (e.g., navigating insurance, travel to treatment site). Innovative contracts that focus solely on clinical outcomes and medical services without considering access barriers and social determinants of health may result in patients not receiving the full benefit of a GT.

Health Equity Implications of Innovative Contracting

Health plan coverage for GTs can be inconsistent because of diverse benefit designs and financing strategies employed by payers (e.g., some state Medicaid programs offer more generous benefits than others [9]). Although no interviewees reported knowledge of GTs being completely excluded from insurance policies, some believed that many small-size or mid-size employers might contemplate such exclusions in the near future because of cost concerns. Generally, coverage policies for GTs tend to be more restrictive than the FDA-approved labeling [9, 28, 46], potentially leading to inequitable access. This situation may worsen existing health disparities, as many individuals who could benefit from GTs, such as those with sickle cell disease (SCD), are Black or Hispanic and may reside in underserved communities with limited access to specialized care [24].

Interviewees generally agreed that ICs for GTs can help improve affordability and manage uncertainty while promoting access and addressing unmet needs. They generally shared the perspective that contracts should consider strategies to provide equitable access to treatment for patients living in rural areas (e.g., far from Centers of Excellence), those with out-of-network providers, and those of low socioeconomic status. One interviewee also described the need to consider other access barriers across the treatment life cycle. For example, factors that may impact timely diagnosis, knowledge of treatment and coverage options, physical access to treatment, and completion of the treatment journey should be considered to ensure a contract supports patient care plans.

Future of Innovative Contracting for GTs

By 2032, experts predict 54–74 new CGT product-indications could receive FDA approval [2]. One recent development is the Centers for Medicare & Medicaid Innovation Center (CMMI) CGT Access Model, a multi-year voluntary initiative for state Medicaid programs and manufacturers [54]. This model initially focuses on increasing access to two GTs for SCD among individuals with Medicaid coverage. Both manufacturers of currently available SCD gene therapies, Vertex and bluebird bio Inc., opted to participate. Thirty-three states, plus the District of Columbia and Puerto Rico, will participate in the model, representing around 84% of the Medicaid SCD population [55]. Under the model, manufacturers will provide states with rebates reflective of model-negotiated terms, and states will implement an agreed-upon standard access policy [19]. Payments will be tied to outcome measures relevant to SCD. The drug manufacturer will reimburse the state(s) an undisclosed portion of what was paid for the therapy if it is not as effective as expected. Agreements may also include other price concessions, such as guaranteed rebates. An analysis conducted by Colorado Medicaid suggests that the rebates proposed in the CMMI model would be an effective tool for managing the costs of GTs while promoting patient access [12].

Many interviewees were unfamiliar with the CMMI CGT Access Model. A few agreed that the model could serve as a test case for broader contracting efforts. One interviewee highlighted the requirement for participating manufacturers to provide fertility preservation support as a significant factor influencing a manufacturer’s decision to participate, given it was the only way that Medicaid patients could access fertility preservation support — valuable care for some patients considering a GT for SCD.

Interviewees also discussed the requirement for long-term solutions to GT financing beyond ICs between manufacturers and payers. Specifically, they shared their perspectives on a federal GT benefit or risk pool (i.e., integration of GT treatments into Medicaid benefit programs to expand accessibility). Interviewees generally agreed with the benefits of sharing GT costs across payers to manage the financial risk and burden of GTs. One interviewee felt that all intermediaries — manufacturers, employers, and the federal government — should contribute to a federal insurance fund. The idea of a federal benefit or risk pool was viewed generally as being a more stable and equitable solution compared with individual state-level efforts. However, some interviewees felt that federal price negotiation in the context of a federal GT model could stifle innovation. Interviewees highlighted regulatory and political challenges associated with establishing a national risk pool or benefit, noting that the current political climate might not favor such a solution.

In contrast to a risk pool approach, which interviewees felt could lead to a loss of control over managing individual member needs, single-case agreements may be a more individualized solution. Though the research did not find a specific example of a public single-case agreement, interviewees indicated they may become a solution for rare or ultra-rare populations in which payers or employers may have only one member eligible for a GT, further demonstrating the need and desire for flexibility in contracting approaches.

Discussion

The landscape of ICs is evolving as development and commercialization of gene therapies continues. Current trends suggest that interest in ICs for GTs is growing among manufacturers and payers seeking to promote patient access to these potentially curative therapies [41, 49]. Though ICs must overcome barriers for broader adoption, payers’ and manufacturers’ favorable perception of and participation in innovative financing methods have expanded over time. Perhaps because GTs primarily target rare inherited diseases, barriers to implementing ICs for GTs align with challenges of treating patients with rare diseases: individual responses to treatment can vary substantially, and can make the impact of treatment unique to each patient and difficult to predict [5]. As the field of GT advances and technology improves, GTs indicated for larger populations may emerge, and researchers could investigate whether IC barriers are similar.

Widespread adoption of ICs will require a multi-stakeholder collaborative approach to overcome these barriers. While some can be addressed through solutions focused on efficient processes and administrative or logistical support, others will require more collaborative approaches and creative solutions (e.g., using real-world data instead of clinical trial and cost-effectiveness analyses to estimate breakeven times for ICs for GTs [15]) to address concerns about financial risk or perceptions that resource-intensive processes to collect and manage data will outweigh the benefits to patient access.

Though a national risk pool for GT contracting is not currently on the horizon, the CMMI CGT Access Model is an experiment for testing a public/private partnership for ICs that could improve access to GT treatments for patients with SCD [24]. The model has potential to address several persistent barriers to contracting through greater transparency, improved alignment between state Medicaid plans and participating manufacturers, and centralized contract implementation support. With 35 states indicating interest in the first year of participation, it would be valuable for stakeholders to voice their evaluation of this initial phase, including assessing evidence on patient access to therapies and resources required for an IC that would otherwise be done on a state-by-state basis. Stakeholder assessment will be helpful evidence to determine if/how the CMMI model may expand beyond SCD.

As CMMI tests state-level solutions, the commercial sector can continue testing approaches by learning from early contract successes and failures. Beyond the identified models with rebates, warranties, or annuities, stakeholders are exploring new approaches such as the holdback approach and service-based agreements. Emergence of third-party contracting organizations also represents a promising solution for building trust between contracting parties while providing logistical support for contract implementation and data collection [41]. Neither the literature nor the interviews shed light on whether conflicts of interest might arise in using third-party contracting organizations (e.g., third parties compensation by only the payer, employer, or manufacturer), signaling an area for further research.

Our research does not specifically point to the need for new types of contracts or improvements to existing contract types. Rather, it suggests some types of contracts and contracting approaches may simply be better suited for certain stakeholders. Whether part of a commercial or public sector model, each IC contains unique data elements, timeframes, and financial terms (see Table 2), underscoring the need for flexibility in designing fit-for-purpose payment solutions [51]. Establishing principles and practices that support fit-for-purpose contracting would be an opportunity to build trust between contracting parties who often have conflicting interests, share lessons learned from early adopters of ICs, and promote efficiency to support consistent and equitable patient access to GTs in the future.

Limitations

This study has several limitations that should be considered when interpreting the findings. This study relied on contracting details made publicly available by manufacturers and payers, and some stakeholders have chosen not to publicly disclose contract details. This study was conducted prior to available results from the CMMI CGT Access Model. As such, findings do not incorporate insights or data that may emerge from this model, which could provide valuable information on innovative financing mechanisms and their real-world impact. Additionally, while qualitative research included representation from various key stakeholder categories, the number of participants within each category was limited. This may affect the generalizability of findings, as the perspectives captured may not fully reflect the diversity of views within each stakeholder group. It also limits our ability to draw concrete conclusions about opportunities to bridge different interests of stakeholders. Further research with a broader sample size or that convenes representatives across these stakeholder categories would help identify principles and practices that can be applied to ICs to address barriers to contracting efforts.

Conclusions

Over the past decade, establishing ICs between manufacturers and payers has gained traction as a solution to financing GTs. The current contracting landscape underscores that an IC must be fit for purpose, as a one-size-fits-all model is insufficient to address the diverse needs and objectives of different stakeholders. Moreover, numerous barriers may prevent some parties from engaging in ICs. As the field progresses, additional solutions will be necessary to ensure broad equitable patient access to these transformative therapies, supporting both patient outcomes and healthcare system sustainability. One such solution is the development of industry-wide principles and best practices for ICs for GTs.

Funding

This study was funded by the National Pharmaceutical Council.

Declarations

Conflicts of Interest/Competing Interests

Tyler D. Wagner, Jacqlyn W. Riposo, Kendra M. Gould, Jonathan D. Campbell, James T. Kenney, Claire M. Csenge, and Theresa Schmidt have no conflicts of interest that are directly relevant to content of this study.

Ethics Approval

The interviews completed as part of this study received institutional review board exemption determination by Advarra Institutional Review Board (Pro00084698).

Consent to Participate

Interview participants provided verbal consent to participate.

Consent for Publication

Not applicable.

Availability of Data and Material

Qualitative data including recordings and transcripts from interviews are retained on a secure online platform that can only be accessed by the study leads. Per the institutional review board requirement, all recordings and transcriptions will be destroyed within 12 months of study completion. A thematic summary of the interviews is available upon request.

Code Availability

Not applicable.

Authors’ Contributions

TDW: funding acquisition, conceptualization, methodology, writing (original draft preparation), review and editing. JWR: conceptualization, methodology, investigation, formal analysis, writing (original draft preparation), review and editing. KMG: project administration, conceptualization, methodology, investigation, formal analysis, writing (original draft preparation), review and editing. JDC: funding acquisition, conceptualization, methodology, supervision, review and editing. JTK: investigation, review and editing. CMC: investigation, writing (original draft preparation). TS: conceptualization, methodology, investigation, formal analysis, writing (original draft preparation), review and editing. All authors read and approved the final manuscript.