Advanced Therapy Payment Models: Expert Insights

New payment models are emerging to address the high costs and complexities associated with advanced therapies, which offer potentially life-saving treatments for rare diseases. The need for innovative financial approaches is driven by the anticipated influx of these therapies, with projections indicating up to 90 new gene and cellular therapies could gain approval by 2031, potentially resulting in $30 billion in healthcare spending without offsetting measures.

The discussion around these payment models gained momentum in early 2020 when the Blue Cross Blue Shield Association (BCBSA) and the Aspen Institute convened a workgroup of healthcare leaders from government, industry, and academia. The goal was to clarify the challenges and potential solutions for covering these expensive, yet promising, treatments.

The Challenge of Advanced Therapy Costs

Advanced therapies represent a significant financial hurdle for the healthcare system. While these treatments can be transformative for patients with rare conditions, their high price tags necessitate new approaches to reimbursement. Traditional fee-for-service models are often inadequate for these therapies, which may involve a single, high-cost intervention with long-term benefits.

Justine Handelman, former senior vice president of Policy and Advocacy for BCBSA, emphasized the importance of access to these therapies. We believe that everyone—no matter who they are, what health condition they have, how rare it might be—deserves access to affordable and potentially life-saving therapies, she stated, speaking solely from the perspective of BCBSA.

Collaboration Between Stakeholders is Key

Addressing the issue of advanced therapy coverage requires close collaboration between health insurers and pharmaceutical companies, stakeholders who often have a complex relationship. The technical nature of these therapies and the need for consensus on coverage necessitate a unified approach.

An MIT report highlighted the potential financial impact of these therapies, estimating $30 billion in healthcare spending by 2031 if offsets are not implemented. This underscores the urgency of developing sustainable payment models that balance access, innovation, and affordability.

The Need for Real-World Durability Data

Beyond pricing, establishing appropriate payment models requires robust data on the long-term durability and effectiveness of these therapies. Demonstrating the value of these treatments over time is crucial for justifying their cost and ensuring that patients receive the maximum benefit. This need for real-world evidence is driving the development of new data collection and analysis methods.

The conversation surrounding advanced therapy payment models is ongoing and evolving. As more of these treatments become available, the healthcare industry will continue to grapple with the challenges of ensuring access, affordability, and sustainable innovation. The initial work done by the BCBSA and Aspen Institute workgroup provides a foundation for future discussions and the development of effective solutions.

The development of alternative payment models (APMs) is seen as a potential solution to the challenges posed by innovative medicines. A framework matching challenges with appropriate solutions is currently lacking, according to research published in Appl Health Econ Health Policy in April 2025.

Pricing and reimbursement mechanisms for advanced therapy medicinal products are also being examined across 20 countries, as detailed in a November 2023 report published in Front Pharmacol. This international perspective highlights the global nature of the challenges and the need for coordinated efforts to ensure patient access to these potentially life-changing treatments.