Gene therapy: Big potential, big prices

New strategies needed as revolutionary but costly therapies emerge.

Published: May 2022

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A fundamental change in how we treat genetic diseases occurred in December 2017 when the first gene therapy was approved for use in the U.S. by the Food and Drug administration (FDA).

Known as Luxturna (voretigene neparvovec-rzyl), the drug is used to treat patients with a rare, inherited form of vision loss that may result in blindness.1 In May 2019, the FDA approved a second gene therapy, Zolgensma®(onasemnogene abeparvovec-xioi) for the treatment of certain patients with spinal muscular atrophy (SMA), a rare disease attacking the motor neurons of babies and young children.2

Currently, Luxturna and Zolgensma are the only two gene therapies approved for use in the U.S. This will soon change. The FDA is expected to grant approval for two more gene therapies in the coming months and expects to approve as many as 10–15 per year by 2025.3

Gene therapies herald a new way of treating genetic diseases, offering hope to people with these conditions. Another consideration for gene therapies, however, is cost. The high price tag on these therapies requires rethinking how treatment costs are managed. Below, we’ll explore what makes gene therapies different, why plan sponsors should care, and what you can do to prepare as more gene therapies reach the market.

What are gene therapies?

As the name implies, gene therapies work by modifying genetic code. However, it’s important to distinguish between in-vivo and ex vivo approaches to gene therapy. With ex vivo therapies, cells are removed from a person, genetically modified in a lab, and reinserted back into the patient.4 This approach is responsible for CAR T-cell therapies now commonly used to treat certain cancers

Alternatively, in-vivo gene therapies are designed to work inside the body. For example, to administer Luxturna, the therapy is injected directly into the eye of the patient.5 In-vivo gene therapies can either replace a faulty gene responsible for an illness with a healthy one, add a gene to help the body to fight off a disease, or turn off a malfunctioning gene.6

For the remainder of this article, we’ll focus on in-vivo gene therapies. One important aspect of gene therapies is that they aim to permanently cure or provide long-term symptom alleviation for disease. This “one and done” potential represents compelling new treatment options for those with diseases caused by malfunctioning genes.

In the case of Zolgensma, a single dose of the drug is intended to permanently replace the function of the SMN1 gene responsible for SMA. In contrast, another drug indicated for treatment of SMA, Spinraza®, requires several injections at the onset of therapy and maintenance doses every 4 months thereafter.

Why should you care?

For plan sponsors, the primary consideration about gene therapies is cost. For example, Luxturna costs $425,000 per eye or $850,000 per patient. Zolgensma is priced at $2.1 million per treatment.

One factor temporarily dulling this price shock is that the gene therapies currently on the market are for rare diseases. Only 1,000–2,000 people in the U.S. are thought to have Biallelic RPE65 mutation-associated retinal dystrophy, the condition addressed by Luxturna.7 Likewise, Zolgensma is indicated for a subset of patients with SMA, which occurs approximately once in every 10,000 live births worldwide.8

Yet, gene therapies will not always be relegated to treating rare diseases. Several gene therapies for less rare diseases with higher populations of potential patients are advancing through clinical trials. Roctavian, a gene therapy designed to treat hemophilia A, is currently in Phase 3b trials and may be approved late this year.9 Hemophilia A impacts an estimated 1 in 5,617 male births in the U.S.10 The cost of Roctavian is expected to be between $2 and $3 million.

Thus, it only takes one claim for a gene therapy to have profound financial implications for a plan sponsor. For smaller or mid-sized groups, a million-dollar claim for a gene therapy may meet or exceed their expected annual pharmacy drug spend for a given year.

As gene therapies become more prominent, the likelihood of plan sponsors encountering such a claim will only increase. For example, by 2023 we anticipate seven gene therapies being in the market. For a group covering 10,000 lives, this would equate to ~4.5% chance of 1 or more claims in that year.11

How you can prepare

Gene therapies are not just another new drug class. They come with new logistical and procedural complexities for providers, patients and caregivers. Considering their cost, they also come with unprecedented financial risks for plan sponsors.

Given this, new thinking is required. Optum is working to integrate the marketplace of gene therapies, from pharmaceutical manufacturers to the payer. We are also focusing on creating a seamless patient experience for those receiving these therapies.

At Optum Rx, we are committed to launching innovative gene and cell solutions that ensure employers and insurance plans have the tools they need to cover these milestone therapies for their members”

– Jeff Pohler, vice president, gene and cell therapies, Optum Rx.

To help plan sponsors manage the risk exposure to gene therapies, we created Optum Gene Therapy Risk Protection. This risk management approach reduces the volatility presented by catastrophic claims for gene therapies by spreading out the cost into a manageable, predictable per member per month (PMPM) fee for plan sponsors.

In addition, partnering with Optum Rx gives plan sponsors access to client-specific risk modeling. This analysis will help predict their unique gene therapy risk exposure.

Optum Rx also has proven expertise in negotiating outcomes-based contracts with manufacturers. This approach ensures the price paid for a gene therapy aligns with value delivered. This is especially important for gene therapies. As significant questions remain about their durability over time, long-term monitoring of patients is essential. Optum Rx will monitor patients for as long as 15 years to ensure the gene therapy they received is continuing to function as planned.

Talk to your Optum Rx representative to learn more about Optum Gene Therapy Risk Protection and other ways we are helping plan sponsors prepare for gene therapies.

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1.       U.S Food and Drug Administration. FDA approves novel gene therapy to treat patients with a rare form of inherited vision loss. Accessed April 27, 2022.

2.       U.S Food and Drug Administration. FDA approves innovative gene therapy to treat pediatric patients with spinal muscular atrophy, a rare disease and leading genetic cause of infant mortality. Accessed April 27, 2022.

3.       U.S Food and Drug Administration. Statement from FDA Commissioner Scott Gottlieb, M.D. and Peter Marks, M.D., Ph.D., Director of the Center for Biologics Evaluation and Research on new policies to advance development of safe and effective cell and gene therapies. Accessed April 27, 2022.

4.        Gene Home. In vivo and Ex vivo Approaches to Gene Therapy. Accessed April 27, 2022.

5.       American Academy of Ophthalmology. Subretinal Injection of Luxturna. Accessed April 27, 2022.

6.       U.S Food and Drug Administration. What Is Gene Therapy? How Does It Work? Accessed April 27, 2022.

7.       U.S Food and Drug Administration. FDA approves novel gene therapy to treat patients with a rare form of inherited vision loss. Accessed April 27, 2022.

8.       Frontiers in Genetics. The Birth Prevalence of Spinal Muscular Atrophy: A Population Specific Approach in Estonia. Accessed April 27, 2022.

9.       BioPharma Dive. BioMarin plans return to FDA with updated data on hemophilia gene therapy. Accessed April 27, 2022.

10.   Centers for Disease Control and Prevention. A New Study of Hemophilia Occurrence Finds Many More Cases in the United States. Accessed April 27, 2022.

11.   Optum internal analysis, March 2022.


This article is directed solely to its intended audience about important developments affecting the pharmacy benefits business. It is not intended to promote the use of any drug mentioned in the article and neither the author nor OptumRx has accepted any form of compensation for the preparation or distribution of this article.