Benefits Strategy

Cell and Gene Therapy: Key Considerations for Employers with U.S.-based Populations

As more cell and gene therapies (CGTs) come to market, they have the potential to improve patient care and outcomes. Yet their associated clinical complexity and high cost require employers and their health plans to take a closer look at how these therapies are being accessed and administered.

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What are cell and gene therapies?

With a rapidly advancing cellular and genetic science space, CGTs have entered the treatment landscape alongside traditional pharmaceutical options. Cell therapy uses manipulated or engineered cells to treat diseases. Gene therapy seeks to modify or manipulate the expression of a gene or alter the biological properties of living cells for therapeutic use. ¹

CGTs can be used with gene-modified cell therapies (GMCTs). GMCTs are administered by extracting the patient's stem cells, genetically altering the cells in tissue culture to express a new gene, multiplying them to a suitable quantity and then returning them to the patient.

Gene Therapy, Cell Therapy, Immunotherapy, CAR-T: What’s the Difference?

Gene therapy is the introduction, removal or change in the content of a person’s genetic code with the goal of treating or curing a disease.

Cell therapy is the transfer of intact, live cells into a patient to help lessen or cure a disease.

Immunotherapy or biological therapy is the treatment of disease by activating or suppressing the immune system.

CAR-T therapies are a type of immunotherapy that makes use of genetically modified T cells. In other words, it uses gene therapy as a means to immunotherapy.

How are CGTs utilized today?

Currently, based on the number of patients treated, CAR-T cell therapy is the most utilized form of CGTs on the market today. CAR-T cell therapies are most effective against blood cancers, making them a celebrated medical advancement in oncology. Traditionally, CGTs have been associated with treating rare diseases, since many rare diseases are caused by single gene defects. While rare diseases remain a significant area for CGT development, research is expanding to explore the use of these therapies in more common conditions like heart disease and more prevalent cancers.

The Time to Consider Your CGT Strategy is Now - and Here's Why

While most employers may not have seen the financial impact of CGTs yet, waiting to develop a strategy for these therapies is not a viable option. Given that there are more than 3,600 CGTs currently in the pipeline, the number of approved therapies is poised to grow substantially.² At this point, coverage decisions are made individually for each therapy, but the patient support structures and payment mechanisms may be developed for all therapies in this class collectively due to shared challenges about the complex site-of-care considerations and high financial exposure. Simply put, existing models such as Center of Excellence (COE) programs or stop-loss insurance are not designed for these therapies. Nevertheless, this approach is being increasingly considered by employers – with 9% of surveyed employers indicating that they will have a COE for cell and/or gene-based therapies in 2025 and another 10% considering for 2026/2027. While coverage decisions are important, the key challenge is developing proactive strategies to address access to quality care, support for the duration of treatment, medical complexity and long-term implications of CGTs for employee's well-being.

Why are the costs associated with CGTs a significant concern?

Although these therapies have been shown to deliver unprecedented and curative patient success stories, their price tags pose significant cost and access concerns.

In the U.S., the first gene therapy, Kymirah (tisagenlecleucel), a type of CAR-T cell therapy to treat a form of leukemia, was approved in 2017. The drug alone has a list price of $612,000 per treatment along with medical administration costs, which can be anywhere between $350,000 to $1 million; placing total medical and pharmaceutical costs at or above $1 million.^3,4

Approximately 5 years later, Libmeldy was approved to treat a rare, fatal childhood neurodegenerative disease, with a reported cost of $4.25 million per treatment (excluding medical costs for administration), making this drug the most expensive drug on the market at the time of approval.⁵

Globally, access considerations related to the exorbitant cost of CGTs are even more complex, as multinational employers have to navigate the varying national public health systems’ coverage and affordability decisions.

With rising prices and the number of approved drugs expanding the number of patients who could benefit from these therapies, the sustainability of coverage for CGTs and the associated hospital care is becoming a relevant concern for most employers. According to the 2025 Employer Health Care Strategy Survey, 96% of employer respondents are concerned or very concerned about the patient and plan affordability of CGTs in the pipeline. When asked how they are currently managing these therapies, responses were as follows (Table 1):

Table 1: Tactics to Address High-cost Therapies, 2022-2025

Source: Business Group on Health. 2025 Employer Health Care Strategy Survey. August 2024. https://www.businessgrouphealth.org/resources/2025-employer-health-care-strategy-survey-part-5-pharmacy-costs. Accessed August 26, 2024.

What financial risk-sharing approaches can employers consider?

To determine the U.S. payment paradigm for CGTs, employers rely on the expertise of their health plan to negotiate the cost of treatment with in-network providers. Hospitals purchase CGTs from manufacturers and bill the plan. Some employers may rely on stop-loss insurance to mitigate this claim cost. However, the stop-loss programs employers use to manage financial volatility associated with large, unique claims may not offer the desired protection for CGTs. The reason is that stop-loss carriers can anticipate such claims based on claim data and “laser out” these claims, essentially eliminating them from stop-loss protection. Claims that are not lasered out drive up the stop-loss premiums the following year, potentially making stop-loss coverage unaffordable for affected employers. Since even large, self-insured employers typically cover a smaller population compared to public options of fully insured groups, only a few patients in need of CGTs within an employer-sponsored plan can have a disproportionate impact on the plan's finances.

To learn more about how to pursue a value-based purchasing strategy for specialty drugs and gene therapies, review our resource: Specialty Drugs and Gene Therapies Value-Based Purchasing.

A variety of financing and risk-sharing models have emerged to address the challenges of paying for cell and gene therapies. Employers looking to move beyond traditional stop-loss will need to assess these new approaches when contracting with health plans, PBMs and other partners in the health care ecosystem (Table 2):

Financing Options	Definition	Considerations
Carve-Out	A newer approach that has emerged is the carve-out model, where employers are contracting with third-party solutions outside PBMs and carriers to administer CGTs.	A more resource-intensive approach for an employer to organize, and executing multiple partnerships outside PBMs and carriers can be challenging. Can be more tailored to the employee population and provide more financial predictability.
Paying Over Time	Employers can negotiate with manufacturers to pay for CGTs over a period of several years instead of making a large upfront lump sum.	Third-party administrators (TPAs) can also play a role in facilitating these arrangements by partnering with manufacturers. This approach may reduce the cash flow burden but does not eliminate the expense associated with administering CGTs.
Risk Pooling	Employers can participate in risk pools with other companies to share the overall costs of CGTs across a larger group of covered individuals.	Creates a more predictable budget, though likely includes paying a premium “margin” to enable the pool to ensure its sustainability. Helps prevent adverse selection (when individuals with high care needs are more likely to join a particular insurance plan due to better coverage).

Table 2: New Approaches to Financing

With such large costs associated with a single patient and the relative novelty of these therapies, employers and their vendor partners need to look for risk-sharing models as well as opportunities to tie payment to the effectiveness of the therapy. Outcomes-based contracting is one approach that connects reimbursement to how well the treatment works for the patient. This approach incentivizes manufacturers to develop effective therapies and reduces upfront costs for employers but requires clear metrics to define successful outcomes.

Though the financing options and risk-management strategies will vary across countries, many of the challenges and barriers to ensuring appropriate access to CGTs in the U.S. mirror those around the world. For more information on the challenges as well as opportunities in the global CGT landscape, check out this resource: Connecting Employees to Cell and Gene Therapies Outside the United States: Opportunities and Challenges.

When assessing what value-based and/or risk-sharing payment models plan partners are considering with manufacturers, employers should keep in mind the following considerations:

Long-term durability of curative efficacy may warrant contracts that allow for extended outcome evaluation periods.
Value-based arrangements often leverage manufacturer rebates as a risk-sharing mechanism and as a form of payer repayment, but the majority of gene therapies may be adjudicated through the medical benefit, where rebates are less prevalent.
New sources of data may be required for assessment of patient outcomes.
Employers should be financially protected regardless of patient plan enrollment status at the time of outcome assessment.

How is the CGT patient experience unique?

CGTs are financially, clinically and administratively very complicated. This complexity, coupled with the quickly evolving nature of these therapies, creates a unique and sometimes difficult journey for patients. Current COE models, often designed for established treatments, might struggle to address the unique needs of CGT patients. These market trends highlight the urgent need for specialized support programs to guide patients through site selection, logistics and emotional challenges.

Patients identified as candidates for one of these therapies face a complex and prolonged treatment journey that involves many steps (Figure 1).

Figure 1: A Patient's CGT Treatment Journey

Since the patient journey for the CGT- eligible population is new and complex, employers can consider collaborating with health plan and vendor partners to ensure that existing resources fully support CGT patients. This step includes exploring how current processes, including provider referrals, prior authorizations and virtual consultations, can be adapted for CGTs. Additionally, employers should work with partners to understand patient needs and advocate for comprehensive support services. These services can range from financial counseling and care coordination to mental health support and travel assistance for treatment at accredited facilities.

Furthermore, employers can empower patients by ensuring access to skilled navigators and expert second opinions. Navigators can guide patients through treatment selection and connect them with the right providers based on location, accreditation and clinical needs. This comprehensive approach ensures that patients and caregivers have the support system needed throughout their CGT journey.

Partner Financial Clinical Patient

CGT Coverage Sustainability, Plan Design, and Patient Experience: Considerations for Plan Sponsors

To stay ahead of the curve as new CGT advancements emerge, employers need a thoughtful and strategic approach to this new innovative treatment. This means considering not just the therapies themselves, but also the broader impact on your organization.

The following sections describe four key pillars that will help employers shape coverage and support surrounding CGTs. These pillars are partnership, clinical, financial and patient outcomes.

Partnership

1 | Monitor the CGT pipeline: With the help of their partners, employers should monitor upcoming therapies by requesting ongoing and advanced notification from health plan partners regarding approved therapies and expected clinical recommendations. Doing this upfront allows for early evaluation of potential cost impacts and coverage considerations.
2 | Partner with plan providers: Collaborate with plan partners to assess the potential prevalence of CGT needs within the employee population. Analyzing member claims data can help with early identification.
3 | Embrace innovation: Work with health care consultants to stay informed about emerging solutions and vendor offerings. Doing so ensures that you can leverage the latest evidence-based approaches to optimize the use of CGTs and mitigate long-term cost challenges.

Financial

1 | Current cost-containment strategies: New CGTs have escalated market conversations about drug stop-loss or reinsurance, long-term financing and risk-pool models. These approaches may provide a temporary respite for price absorption, but they are not true cost-containment measures and ultimately have no impact on list prices. While these approaches may alleviate upfront budgeting constraints, employers will still be responsible for rendering payment, be it in the form of high stop-loss premiums, per member per month (PMPM) costs or “mortgage-like” payments for months and years down the road.
2 | Coverage under the medical plan: Adjudication under the medical benefit, as opposed to the pharmacy benefit, excludes these therapies from trend guarantees negotiated with a PBM. Some employers report challenges with timely visibility of drug spend within the medical benefit, a lack of transparency that may obscure the ultimate cost related to these therapies for plan sponsors.

Clinical

1 | Many new therapies but few accredited facilities: There are currently 310 FACT (Foundation for the Accreditation of Cellular Therapy)-accredited centers for CGTs, but there are more patients than that eligible for treatment, pointing to the need for more accredited facilities as well as specialized staff. Limited access for patients creates travel burdens, financial strain and treatment delays, especially for those with lower incomes or living far away from facilities.
2 | Clinical complexity: CGTs have extremely stringent eligibility criteria to ensure that these therapies are suitable for the patient’s condition. Additionally, for many patients, multiple treatments are needed after administering the initial CGT, further exacerbating clinical complexity. Since CGTs are so new, more time is needed to develop the clinical expertise to support administration in hospital settings.

Patient Experience

1 | Importance of wraparound care services for CGT patients: CGTs often require specialized treatment centers, and treatment can take months or years to complete. Therefore, patients should receive adequate caregiver and wraparound support during their treatment to ensure that the treatment has the highest likelihood of success.
2 | Specialized support programs for CGT patients: Current systems designed for established treatments might not fully address the complex needs of CGT patients. To bridge this gap, prioritize offerings like care coordinators/advocates, mental health support, financial guidance and travel assistance.