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Episode 17: The promise and impact of gene therapy

In episode 17, producer Sarah Murphy and host David Willows welcome special guest Dr. Luca Pani from the University of Miami and Ned Pojskic, GSC’s leader of pharmacy & health provider relations, to discuss the promise and challenging financial impact of gene therapy.
And now for something completely indifferent

And now for something completely indifferent

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Episode 17 Transcript


[0:00:14.9] SM: Hello and welcome to another episode of GSC’s podcast, And Now For Something Completely Indifferent, where we’ll be discussing the hottest topics and trends in Canadian health benefits. I am the produce and editor, Sarah Murphy. Before we get started with today’s episode, we would like to remind our listeners that the views expressed in this podcast are those of the individuals speaking and not necessarily the views of GSC.

We may talk about possibly controversial subjects and therefore, reserve the right to potentially offend some listeners but are apologizing for it out front. You can download this podcast from our website at or subscribe to it from wherever you get your podcasts.

We also encourage you to read our publications, the inside story and follow the script which you can also download from our website and please be sure to follow the conversation on Twitter and LinkedIn.

Now, let’s get started. Today’s episode is hosted by David Willows, GSC’s Chief Innovation and Marketing Officer.


[0:01:14.4] NP: Hello, David.

[0:01:15.4] DW: Hi Sarah. As people will hear on this podcast, we achieved a first by incorporating disruptive new technology into this podcast. This is the first time we used the phone.

[0:01:27.9] NP: An actual phone. A phone call.

[0:01:30.5] DW: A phone interview. A few times, I think we’ve had some openings which have talked about the sort of the technological disasters that come with the podcast and the stress of actually getting this to air. This was quite remarkable in that we phoned Dr. Luca Pani in Boca Raton Florida.

[0:01:46.3] NP: That’s right.

[0:01:47.0] DW: What did he do?

[0:01:48.7] NP: He answered.

[0:01:49.5] DW: Then?

[0:01:49.6] NP: He spoke to us and we could hear him.

[0:01:51.5] DW: Yes.

[0:01:52.5] NP: That’s it. Nonevent.

[0:01:53.9] DW: Okay. Yeah, I hope our audience enjoys the miracle of this broadcast that they’re about to hear.

[0:02:00.5] NP: Sorry, this also opens us up to so many more guests.

[0:02:04.3] DW: It’s true.

[0:02:04.7] NP: Across the world.

[0:02:05.9] DW: Literally billions of people can now be on the podcast. That could not be before. We should get a list and work through them starting with the A’s. I’m not sure what will happen in July and August but people can expect just a wild card.

[0:02:17.2] NP: Absolutely.

[0:02:17.6] DW: Somewhere in the world. Let’s get to it.


[0:02:23.8] DW: We’re here in the podcast studio in Toronto and we have two guest today. One whom sits across from me that you know very well, if you’re a frequent listener, I will introduce him in a second. We have somebody further afield for the first time. This is the first podcast where we actually have somebody on the phone and it’s Dr. Luca Pani.

Dr. Pani, you’re in Miami, right?

[0:02:44.9] LP: I’m in Boca Raton

[0:02:47.8] DW: Boca Raton? That’s even cooler. Dr. Pani is Professor of Psychiatry at the University of Miami. He is the author of over 160 scientific publications an editor and author of several volumes among which is the highly downloadable, Sustainable Innovation Medicines and the Challenges for the Future of our National Health Services.

He is here today. You might, from that resume think we’re going to have a podcast about mental health issues which we have had in the past and I’m sure we will in the future. Interestingly, he has also served as the Director General of the Italian Medicine’s Agency from 2011 to 2016. I think it may his experience in that realm that is the reason we brought him here today to talk about gene therapy which we believe is an emerging issue, an exciting challenge perhaps but one that health benefit plans all across the world will have to face.

Along with Dr. Pani, we have in our studio, Ned Pojskic who is our Director of Pharmacy Strategy and Health Provider Relations. Ned is going to share some of his perspectives on this challenge that we’re facing with this particular therapy and again, where perhaps we’re going to need to find the money to pay for some of these remarkable new treatments.

Dr. Pani. For our audience who are generating sort of lay people, we’re not talking necessarily to pharmacists and geneticists, can you explain to us what is this new treatment that’s coming that we’re referring to as gene therapy?

[0:04:22.6] LP: You mean, the CAR T type of therapy or the gene therapy? Well, gene therapy in general is of course the ability of either substitute correct, a man deletes a gene, a piece of DNA that’s specifically serves a function in the human body. The CAR T, which are now very famous, is an acronym that means chimeric antigen receptor T cell. The T cell are the part of the white blood cell that we have and they serve an immune response system, they attack things that are not good for us from virus, bacteria and also tumors in some cases.

This case, the chimeric part, the chimera, recombination of this T cell by genetically engineering. They belong as you said to their mass group of gene therapy, and the most important thing that they do is they change the way drugs were conceived in the past. They are not molecules, they’re not like the medicine that you take every day to treat your blood pressure or your pain or your inflammation. These are more sophisticated, articulated inexpensive type of therapy.

[0:05:42.0] DW: Yes, I think that’s probably why we’re having this podcast today as a pharmacy benefit manager and insurance carrier. What disease states is this being used in already?

[0:05:54.4] LP: The CART are used, for instance, for acute lymphoblastic leukemia in general in tumor of the blood. They haven’t done so well in solid tumor, in tissue tumor, there are some work to be done there. The first, the gene therapy in general, there was the few people know this but there was developed, approved and reimburse in Italy for the entire world.

It was for the death and the deficiency of the — the so called bubble boys. The boys and the girls that are devoid from birth of the immune system. They are basically without defense. Anything will attack them and they unfortunately, without treatment, they die quite soon. The therapy was the first one, the gene therapy was approved was for reestablishing the gene that was missing. That was the first gene therapy and many are coming like this.

[0:06:57.5] DW: Okay, tell me about how many are coming. Because we hear about those that are for probably more rare situations and we can probably get our head around paying for extremely rare occurrences.

[0:07:09.3] LP: Well, for instance, they’re coming for hemophilia which is a little less rare, they’re coming from thalassemia which is rare in some parts of the country but very common in others. Sickle cell and down the line, other lymphomas, and they are coming for many other application, even for coronary heart disease. Potentially.

When they hit a coronary or anything there in the big, high frequency prevalence, then the numbers simply don’t add up.

[0:07:45.3] DW: Absolutely. Ned, let me ask you. What is the state of this treatment in Canada? Is this happening here now? If so, what are the costs that we’re seeing out of the gate?

[0:07:57.8] NP: So far, the only gene therapy that’s been approved in the Canadian context is the CAR T therapy, specifically under the brand name KymRiah. This is a gene therapy developed by Navartis, specifically for younger patients with leukemia as Dr. Pani mentioned.

So far, that’s the only therapy that’s hit the Canadian market but of course, we’re watching this very closely because the sheer number of them coming down the pipeline with some estimates suggesting there are 300 in phase two or three development right now is what warrants all of the caution and all the concern. Because we’re effectively going to be looking at a space that is as prevalent in terms of drugs as the biologics are today.

[0:08:35.5] DW: Okay, and the cost?

[0:08:37.4] NP: KymRiah in the Canadian context is around $600,000 and in the unique fashion, it is sort of a one time treatment and I use the word treatment in this context because it is a treatment. It’s not as simple as a pill or even an infusion, it’s more complex than that. And the process of administration involves many additional steps.

[0:08:58.9] DW: This is not a drug, but you’re our pharmacy strategy leader. Why are you in here talking about this treatment? Do we perceive that we will be asked to be a payer for these treatments?

[0:09:10.9] NP: That’s where the sort of conundrum begins in that it is technically a drug. It is assigned a DIN, a drug identification number by health Canada, which means that they have put it into the category of drugs. Maybe because they don’t know where else to put them.

[0:09:24.9] DW: It’s made by drug companies. We’re used to dealing with those folks.

[0:09:28.7] NP: Absolutely. Again, if you look at our health technology review agencies, they have actually put it in the bucket of health technologies and devices. It’s in that stream where they’re evaluating it from that perspective. I don’t think we’ve settled quite frankly on where this thing lives.

But the simple reality is, benefit plans, public or private will be asked to pay for them and hence where sort of my role and certainly our role as a company comes into play.

[0:09:54.5] DW: Dr. Pani, have you got a sense of how other jurisdictions are bringing these treatments to the population and how they’re being paid for?

[0:10:04.4] LP: In a very creative way, if you ask me. Because basically, what happened is that everybody was unprepared for this. The speed by which this gene therapy arrived is an issue, for instance. These are therapies that you have to use perhaps once and they have eradication potential. All the models in terms of paying that you had, for every jurisdiction, will not work because of course we had other payment models.

Some are simply trying to postpone the approval as much as they can, to figure out how to pay. Others are proposing year by year type of payment so according to the $600,000, if you repay 60,000 for 10 years and you can do this if you have a single payer system or we have a system in which this contract can go along.

Others, interestingly, are trying to make the gene therapy on their own in terms of hospitalization and things like this and my work for some legal and very rare disorder or somewhere where the patent protection, perhaps there is some openings but it is not going to work if you consider that, I think it was referred earlier, there are about 900 in total development and most like, we will have 30, 35 of them approved by 2020, 2022 maximum.

So that will impose different jurisdiction sto come up with some new solutions and again, there is a misalignment between the knowledge that we have technically and scientifically that can be done and the way this innovative therapies can be sustained economically.

[0:11:50.4] DW: So is it right to say that this is a larger, more unique situation than we’ve had — because we have faced high cost drugs in the past. Is this more challenging?

[0:12:01.6] LP: It is more challenging and we – I have to remind all of our listeners that even with HEP C we’re not able actually to face the eradication model. So the eradication model when the new drugs for HEP C came they had 99% response. While the one before that had 60 at best and when the drug company had a clear advantage and there was a clear superiority, they put a price tag that was considered too high, the payers were not ready for that.

It would have collapsed all the systems. So what is happening is that we cannot use anymore the models, what we call the management entry agreements in which for instance we set up a payment by result. For a gene, the gene is integrated in the genome, you can give it a reasonable amount of time but if it is producing the protein most likely the effect is going to be permanent and so that changes completely the way we deal with this.

So one hypothesis that we are working on and several other stakeholders are working on is the ability to show avoidable costs. If I am able to certify that by doing this treatment, you will avoid cost down the line, then I can pay a percentage of those avoided cost and it is going to be a win-win situation.

[0:13:27.4] DW: Okay.

[0:13:27.7] LP: But this of course will change the entire structure of the payments model, you understand this.

[0:13:32.3] DW: Ned, I know you have been doing something about this from our perspective, what are your comments?

[0:13:36.8] NP: Yeah and what Dr. Pani said hit the nail on the head there in the sense that payers are not ready and I think in the Canadian context it is even more acute and there has been very little dialogue around how we are going to approach this. There’s been very little idealization around what are the potential models and yet the first therapy is already on the market. Cures in general are very difficult for payers, right? Because payers are used to predictable models that look at claims coming in.

They look at some trends, trend factors and applying those types of pricing and other models to that. When you have a cure, it breaks down all of that because now all of a sudden you have to absorb a one-time $600,000, or a million dollars in some cases, and you know we are seeing for SMA therapies Novartis is proposing a $2 million price tag for us as a follow up to a product which is on that market right now. So you know, how are we going to absorb that is the big question and what new models are they going to implement.

So the fundamental question we are facing is how do we pay for cures and I don’t know that anybody around the world has quite frankly solved that. You know, Dr. Pani brought up some of the Italian experience. I think we are very much looking at that and what you have done there in terms of deferred payment models, pay for performance and all of those aspects but that is even more challenging in the Canadian context. We have such a fragmentation of payers.

We’ve got 21 different insurers, we’ve got by some estimates a 100 different drug plans in this country and so how do we coordinate data, how do we coordinate the passage of patients between payers for something that you are paying one time and yet different payers are going to touch that patient across their lifespan. So all of those questions are still up in the air and something that we are trying to think through we need to get to as an industry.

[0:15:14.6] DW: Is it right to say, and forgive this vernacular, that pharma is willing to deal on this?

[0:15:19.3] NP: I think so. I mean I think that in the states, we have seen the willingness of Novartis for example to certainly engage in outcome-based agreements. You know I think there is a recognition even from pharma that business as usual simply cannot be in place here, right?

So new models will be necessary and everyone recognizes that the question is how quickly can we come up with those and what are those going to look like. And I also think that this is, in many ways, referring to the Canadian market at least, that the public and private payers need to get together more closely and figure this out because this will require some kind of closer collaboration than we have ever had before.

[0:15:50.4] LP: Yeah, I totally agree. I was considering when Ned said about 100 different pays. It is impossible with this fragmentation. One of the advantages that the Italian agency could have done what they have done saving a lot of money is because it is also the regulator is also the payer and the director general sits. The only person that sits in the two committee, the scientific committee and the payment and reimbursement to committee.

So being aware of the procedure on the regulatory side and then negotiating the economical part and being the single buyer for the national health system made things easier. I totally agree with what was said by Ned and the payers in Canada they need to perform a sort of forum, a consortium or something in which some of these issues are angled at the same level. But let me ask you a question, what happens if, because I am not aware, if a Canadian patient move from one plan to another plan. Is the second plan bound to the contract that the first payer did or not?

[0:16:57.6] NP: That is really the key question because at the moment, the claims simply transfer from one payer to another but if there is no claim, there is nothing to easily transfer. This is where the future will have to revolve around some form of coordination of payment to long term payment that is outside of the claims system and that is where we need parallel systems to accommodate this now.

[0:17:18.8] DW: And even the industry drug pool that we’re quite proud of and have been participative in for the last five or six years now was specifically built for reoccurring, high cost claims and did not contemplate situations like this.

Okay Dr. Pani I was going to ask you what is your advice was to us in Canada. I think you just said it very clearly that we have to start this dialogue and bring people together and again, you are suggesting that we don’t have a lot of time to do this.

[0:17:47.0] LP: I think at most we have one year. Two years at most and this is actually a very – if you really want to nail it in because it is a very small table. You need patient representatives, you need health care providers, you need of course the industry association, the one who produces the therapy, the regulators and the payers. There are only five people that are invited in this table. Nobody else.

And then all of these recommendation go to the government level. To the political level because that’s what their choices are but they should base on the science and of course on the value for outcome. That is going to be the future. In one year and a half, two years, this is going to be difficult to handle otherwise.

[0:18:31.1] DW: Okay Ned, what do you think our next steps are?

[0:18:33.0] NP: I think from an industry perspective we have certainly begun some dialogues at the CLHIA level. We are going to have to move that even faster. I think the sense of urgency is perhaps not here for some folks because they are overlooking the CAR-T therapies because in our Canadian contest of course, we do have provincial cancer agencies, which are mostly responsible for paying for cancer drugs and most people are saying that is fine, you’ll be handled by them.

But you know, as we know very soon behind are some of the therapies which are not oncology and so the question will be raised very quickly. So it should be a warning and certainly as an opportunity for us to start to get together and solve this sooner rather than later.

[0:19:09.8] DW: Okay. I want to thank you both for laying out this issue so clearly for our listeners. We do have a companion written piece in our Inside Story that will be coming out in June along with this and I thank you both for your contributions today. Thank you Dr. Pani.

[0:19:26.5] LP: Thank you for having me.

[0:19:28.2] NP: Thank you.


[0:19:33.0] SM: Thank you to our listeners for tuning into another episode of And Now For Something Completely Indifferent, a Canadian Health Benefits Industry Podcast. To be sure to get future episodes, please subscribe to this podcast wherever you get your podcasts or visit our website at to download.

As a reminder, we talk about these issues consistently in our publications, which are available on our website as well as on social media, so be sure to follow the conversation. Specifically for this episode, you can check our June-July issue of the inside story.

Thanks for listening and we’ll talk again soon.