Health Economics and Outcomes Research (HE&OR) in Advanced Therapy Medicinal Products (ATMPs): A Transatlantic Perspective on the U.S. and Europe

Author: Manolo E. Beelke

Email: [email protected]

Web: manolobeelke.com

Abstract

Advanced Therapy Medicinal Products (ATMPs)—which encompass gene therapies, cell therapies, and tissue-engineered products—are offering life-changing treatments for diseases that were once deemed untreatable. However, the high costs of developing these innovative therapies are creating significant financial challenges for healthcare systems, payers, and patients alike. This article explores how Health Economics and Outcomes Research (HE&OR) can be applied early in the clinical development of ATMPs, with a focus on both the United States and Europe (including the Big 5: the UK, France, Italy, Germany, and Spain). It delves into the differences in each region’s approach to reimbursement, market access, and the strategies payers use to address the high upfront costs of these therapies.

Introduction

Advanced Therapy Medicinal Products (ATMPs) are leading a paradigm shift in modern medicine, offering therapies that can potentially cure conditions that were once considered untreatable. This category includes gene therapies targeting faulty genes, cell therapies such as CAR-T cell treatments for cancer, and tissue-engineered products designed to regenerate damaged tissues. These therapies are innovative but come with a heavy price tag—often reaching millions of dollars per patient. This presents a clear dilemma: how can healthcare systems, which are already under significant financial strain, justify the cost of ATMPs?

This is where Health Economics and Outcomes Research (HE&OR) comes into play. HE&OR helps healthcare providers, payers, and regulators understand whether the long-term clinical benefits of ATMPs outweigh their high upfront costs. It evaluates therapies through cost-effectiveness analyses (CEA), budget impact assessments (BIA), and real-world evidence (RWE). Integrating HE&OR early into clinical development helps ensure that these therapies are both scientifically sound and economically viable.

In this article, we will examine how HE&OR is applied in both the U.S. and Europe. We will also explore the distinct strategies employed by the Big 5 European countries—the UK, France, Italy, Germany, and Spain—to manage ATMP pricing and reimbursement.

Cost-Effectiveness and Value Demonstration

One of the primary objectives of HE&OR in ATMPs is to establish their cost-effectiveness. Given that the cost of many ATMPs can run into the millions, it is essential to prove that their clinical benefits justify the expense. Cost-effectiveness analysis (CEA) is a standard approach to assess this. It compares the price of the therapy against its benefits in terms of Quality-Adjusted Life Years (QALYs) gained and other metrics, such as cost per QALY (Schü?ler-Lenz et al., 2022).

Take the example of Zolgensma?, a gene therapy developed for spinal muscular atrophy (SMA). Zolgensma is priced at over $2 million per patient, making it one of the most expensive treatments on the market. Despite its high cost, the potential for a one-time cure makes it an attractive option from a clinical perspective, as it could prevent the need for lifelong treatment and care. By analyzing both the clinical benefits (such as preventing disease progression) and healthcare cost savings (reducing the need for ongoing care), HE&OR helps determine whether a therapy like Zolgensma is worth its high price (Rodriguez-Otero et al., 2023).

But it’s not just about numbers. The subjective value of a therapy to the patient and their family, along with societal impacts, are increasingly important factors in these analyses.

HE&OR in the United States

U.S. Reimbursement Landscape and Market Access

The U.S. healthcare system is unique in its reliance on a multi-payer system, where private insurers, Medicare, and Medicaid each have different approaches to reimbursing new therapies. Unlike Europe, where national health authorities often make centralized decisions about reimbursement, the U.S. lacks a single Health Technology Assessment (HTA) body to evaluate the cost-effectiveness of new treatments.

However, many U.S. payers turn to organizations like the Institute for Clinical and Economic Review (ICER) to help assess the value of new therapies. ICER often applies a cost per QALY threshold—generally around $150,000—to determine whether a therapy offers sufficient value. While there is some flexibility in how payers adopt ICER’s recommendations, the cost-effectiveness data generated through HE&OR models plays a pivotal role in these discussions.

Outcomes-Based Pricing and Risk-Sharing Agreements

In the U.S., many ATMPs are reimbursed through outcomes-based pricing models, where the therapy's price is directly linked to its clinical performance. For instance, Kymriah?, a CAR-T cell therapy used to treat certain blood cancers, has been introduced under such agreements. The manufacturer only receives full payment if the therapy achieves the expected clinical outcomes within a specified period (FDA, 2023).

This approach is crucial for ATMPs, where long-term outcomes might not be fully realized until several years after treatment. Risk-sharing agreements are another tool used to mitigate uncertainty—payers and manufacturers agree to share the financial risk, with partial refunds or rebates offered if the therapy fails to meet predefined outcomes.

Real-World Data Integration

In the U.S., real-world data (RWD) plays a growing role in justifying the cost-effectiveness of ATMPs. RWD provides insights into how a therapy performs outside the controlled environment of clinical trials. This data is crucial in understanding the long-term efficacy and safety of ATMPs and is often required by payers as part of ongoing evaluations (Rodriguez-Otero et al., 2023).

HE&OR in Europe: The Big 5 Countries

In contrast to the U.S., most European countries have centralized healthcare systems where the state plays a major role in healthcare delivery. This makes HE&OR even more important, as therapies must demonstrate clear cost-effectiveness to gain approval for reimbursement.

Each of the Big 5 European countries has its own approach to market access and pricing decisions, influenced by their respective Health Technology Assessment (HTA) bodies.

United Kingdom: NICE and Cost-Effectiveness Thresholds

In the UK, the National Institute for Health and Care Excellence (NICE) evaluates new therapies based on a cost per QALY threshold, typically ranging between ￡20,000 and ￡30,000. While the threshold may be higher for innovative treatments like ATMPs, NICE plays a central role in determining whether a therapy offers sufficient value to justify its price.

NICE has adopted outcomes-based pricing agreements for certain therapies, including CAR-T treatments, where payment is contingent on achieving specific clinical results. This ensures that the National Health Service (NHS) only pays for therapies that deliver the expected benefits (Rodriguez-Otero et al., 2023).

France: HAS and Early Access Programs

France follows a similar path through its Haute Autorité de Santé (HAS), which assesses both the clinical and economic value of new therapies. France has been proactive in offering early access programs for ATMPs, even before full reimbursement decisions are made. Under these programs, patients can access innovative therapies while developers work to provide long-term HE&OR data (Schü?ler-Lenz et al., 2022).

HAS focuses heavily on clinical effectiveness in addition to cost-effectiveness, and often uses real-world data to support ongoing reimbursement decisions.

Germany: IQWiG and the AMNOG Process

Germany’s system requires HE&OR data as part of the AMNOG process (Arzneimittelmarkt-Neuordnungsgesetz), overseen by the Institute for Quality and Efficiency in Health Care (IQWiG). This process evaluates whether a new therapy offers additional benefits compared to existing treatments. After one year, price negotiations take place based on the results of these evaluations.

Germany has been a leader in introducing outcomes-based pricing for ATMPs, which helps ensure that therapies are priced according to their real-world performance (Rodriguez-Otero et al., 2023).

Italy: AIFA and Managed Entry Agreements

In Italy, the Agenzia Italiana del Farmaco (AIFA) has been instrumental in negotiating managed entry agreements (MEAs), which link the cost of therapies to their performance in the real world. Italy has been an advocate of installment-based payment models for high-cost ATMPs, spreading payments over time to reduce the immediate financial burden on the healthcare system (Schü?ler-Lenz et al., 2022).

Spain: Regional Reimbursement Discrepancies

In Spain, healthcare funding is largely decentralized, which results in significant regional variations in how Advanced Therapy Medicinal Products (ATMPs) are reimbursed. While the Spanish Agency of Medicines and Medical Devices (AEMPS) oversees the evaluation and approval of ATMPs, the final decisions on reimbursement are made at the regional level, through the autonomous communities. This can lead to disparities in access to ATMPs, as some regions may approve reimbursement more readily than others, depending on their local healthcare budgets and priorities.

To address these discrepancies, Health Economics and Outcomes Research (HE&OR) plays a critical role. In Spain, regional health authorities often rely heavily on HE&OR data to inform their decisions, especially for high-cost treatments like ATMPs. Developers must demonstrate the long-term value of these therapies, not just in terms of clinical effectiveness but also their budgetary impact on each autonomous community.

For example, therapies such as CAR-T cell treatments have faced different levels of reimbursement depending on the region, with wealthier regions sometimes providing broader access than those with more limited healthcare budgets. To mitigate these disparities, some ATMP developers are exploring risk-sharing agreements and outcomes-based pricing models tailored to regional authorities, ensuring that the financial risk of adopting these high-cost therapies is shared between the manufacturer and the healthcare system.

In the face of these challenges, Spain is beginning to adopt more centralized mechanisms to streamline reimbursement decisions for innovative therapies like ATMPs. However, significant hurdles remain, particularly when it comes to ensuring equal access across all regions, making Spain an important case study in the complexity of ATMP market access in decentralized healthcare systems.

Integrating HE&OR Early in Clinical Development

Given the financial challenges posed by ATMPs, it is crucial to integrate Health Economics and Outcomes Research (HE&OR) early in the clinical development process. Doing so allows developers to anticipate payer concerns and ensure that the necessary economic data is collected throughout the clinical trials, helping to build a strong case for cost-effectiveness and reimbursement approval.

Engaging Stakeholders Early

One of the most critical steps in integrating HE&OR into clinical development is early engagement with stakeholders, including payers, regulators, and Health Technology Assessment (HTA) bodies. By involving these stakeholders early, developers can better understand the data requirements needed to demonstrate cost-effectiveness and long-term value. This ensures that trials are designed not only to meet regulatory requirements but also to gather the data necessary for reimbursement approvals.

For example, engaging with HTA bodies such as the National Institute for Health and Care Excellence (NICE) in the UK or HAS in France early in the development process can provide valuable insights into what these agencies will look for when assessing the value of a therapy. This early feedback helps ensure that developers collect the right quality of life and patient-reported outcome data, which are essential for demonstrating cost-effectiveness (Rodriguez-Otero et al., 2023).

Designing Clinical Trials with Economic Endpoints

When designing clinical trials for ATMPs, it is important to include economic endpoints in addition to the usual clinical ones. Economic endpoints focus on capturing the cost implications of the therapy, including factors such as healthcare utilization, hospitalization rates, and patient quality of life. By collecting this data during early clinical trials, developers can strengthen their HE&OR models and provide payers with the information they need to assess the therapy's value.

For instance, a trial might track the reduction in hospital visits or long-term healthcare costs that result from an ATMP compared to current standard treatments. This data is invaluable when presenting the case for reimbursement to both public and private payers, as it clearly shows the potential cost savings associated with the therapy (Schü?ler-Lenz et al., 2022).

Leveraging Real-World Evidence (RWE)

In addition to clinical trial data, real-world evidence (RWE) is becoming increasingly important in HE&OR for ATMPs. RWE refers to health data collected outside of clinical trials, such as data from patient registries, electronic health records, and insurance claims. This data provides insights into how therapies perform in broader, more diverse patient populations and in real-world settings.

For ATMPs, which often have small initial trial populations and long-term effects that may take years to manifest, RWE is particularly useful for demonstrating long-term safety and cost-effectiveness. By integrating RWE into HE&OR models, developers can provide payers with a clearer picture of the therapy's impact on real-world healthcare systems, helping to secure broader and more sustained reimbursement approvals (Rodriguez-Otero et al., 2023).

In Europe, RWE is also crucial for post-market surveillance. For example, therapies approved under conditional marketing authorizations—a common regulatory path for ATMPs—must continue to gather data after market approval. This ongoing data collection helps payers and regulators ensure that the therapy delivers on its promises in terms of long-term outcomes and cost-effectiveness.

Conclusion

Advanced Therapy Medicinal Products (ATMPs) represent a significant leap forward in the treatment of diseases that were previously considered untreatable. However, their high development costs and uncertain long-term outcomes pose significant challenges for healthcare systems and payers in both the United States and Europe. Health Economics and Outcomes Research (HE&OR) is critical in addressing these challenges, helping to demonstrate the cost-effectiveness and value of ATMPs in a way that ensures they can be reimbursed and made accessible to patients.

In the U.S., the rise of outcomes-based pricing and risk-sharing agreements is helping to reduce the financial burden on payers, while real-world evidence (RWE) provides essential data on the long-term impact of ATMPs. In Europe, the Big 5 countries—the UK, France, Italy, Germany, and Spain—are each developing their own strategies for integrating HE&OR into the reimbursement process, with centralized healthcare systems placing a strong emphasis on cost-effectiveness analysis (CEA) and budget impact assessments.

Ultimately, the successful commercialization of ATMPs will depend on developers’ ability to engage early with stakeholders, design trials that incorporate economic endpoints, and leverage real-world data to build a comprehensive case for reimbursement. By integrating HE&OR into the clinical development process from the outset, developers can not only improve their chances of market success but also ensure that these life-saving therapies reach the patients who need them most.

FAQs

What are Advanced Therapy Medicinal Products (ATMPs)?

ATMPs are cutting-edge medical treatments that include gene therapies, cell-based therapies (such as CAR-T cell therapies), and tissue-engineered products. These therapies target diseases that are often untreatable by conventional means, offering potentially curative treatments for genetic disorders, cancers, and degenerative conditions. Despite their immense potential, ATMPs are associated with high costs, making economic evaluations critical for their market access.

What is Health Economics and Outcomes Research (HE&OR), and why is it important for ATMPs?

Health Economics and Outcomes Research (HE&OR) is the process of evaluating the economic value and clinical outcomes of medical treatments, including ATMPs. It helps healthcare systems, payers, and regulators assess whether a therapy’s cost is justified by its clinical benefits. For ATMPs, which often carry very high upfront costs, HE&OR is critical in proving their cost-effectiveness, ensuring that these therapies can gain reimbursement and reach patients.

How does cost-effectiveness analysis (CEA) apply to ATMPs?

Cost-effectiveness analysis (CEA) is a key component of HE&OR, used to compare the costs of a treatment against the clinical outcomes it delivers, often expressed in terms of Quality-Adjusted Life Years (QALYs). In the case of ATMPs, where treatment costs can reach millions of dollars, CEA helps determine if the therapy's long-term benefits (such as curing a disease or preventing ongoing care costs) justify the high upfront investment.

What are outcomes-based pricing models and risk-sharing agreements?

Outcomes-based pricing models link the price of a therapy to its real-world performance. For ATMPs, this means payers may only pay the full price if the therapy achieves predefined clinical outcomes, such as curing a disease or significantly improving a patient’s health.

Risk-sharing agreements are similar in that they help reduce payer risk by sharing the financial burden with the manufacturer. If the therapy does not meet the expected outcomes, the manufacturer may provide refunds or rebates, ensuring that healthcare systems don’t bear the full cost of an ineffective treatment.

What role does real-world evidence (RWE) play in the assessment of ATMPs?

Real-world evidence (RWE) is data collected outside of clinical trials, such as from patient registries or healthcare records. RWE is essential for ATMPs, as it provides long-term data on how these therapies perform in real-world settings. This data helps payers and regulators evaluate the long-term safety, efficacy, and cost-effectiveness of ATMPs, which is especially important given the high uncertainty around their long-term outcomes at the time of approval.

How do the U.S. and Europe differ in their approach to ATMP reimbursement?

In the U.S., reimbursement decisions for ATMPs are often made by private payers (insurance companies), Medicare, or Medicaid, with no central authority like in Europe. However, many payers rely on HE&OR data and cost-effectiveness thresholds to determine coverage.

In Europe, the process is more centralized, with national Health Technology Assessment (HTA) bodies (such as NICE in the UK, HAS in France, and IQWiG in Germany) evaluating both clinical and economic data to decide whether a therapy should be reimbursed. Each country has its own approach, but all place significant emphasis on cost-effectiveness analysis (CEA) and long-term budget impact.

How can developers of ATMPs ensure that their therapies gain reimbursement approval?

To improve the chances of gaining reimbursement approval, developers should integrate HE&OR early in the clinical development process. This includes engaging with payers and regulatory bodies to understand their data requirements, designing clinical trials that collect both clinical and economic data, and leveraging real-world evidence to demonstrate long-term value. Adopting outcomes-based pricing and risk-sharing agreements can also help make ATMPs more accessible by addressing payer concerns about cost and uncertainty.

What are the main challenges in ensuring equitable access to ATMPs in Europe?

In Europe, one of the major challenges is the regional variation in reimbursement decisions, particularly in countries with decentralized healthcare systems like Spain, where different regions may have different levels of access to ATMPs. Additionally, the high costs of these therapies make it difficult for healthcare systems to provide equitable access, especially in lower-income regions. By demonstrating cost-effectiveness and long-term value, developers can help ensure that ATMPs are accessible to patients across different regions and countries.

References

Rodriguez-Otero, P., et al. (2023). The role of real-world data in gene therapy development. Nature Reviews Drug Discovery, 22(2), 123–134.

Schü?ler-Lenz, M., Scherer, J., & Müller-Berghaus, J. (2022). Advanced therapy medicinal products (ATMPs): Arrival in the healthcare system. Pharmakon, 10(5), 337–343.

U.S. Food and Drug Administration (FDA). (2023). Regenerative Medicine Advanced Therapy Designation. Retrieved from FDA Website.