Strategies for navigating growth in transplant, cell and gene therapies

OPTUM WEBINAR RECORDING 4/30/26

Mary Ann Borer: 3, 2, 1.

Mary Ann Borer: So now, let's get started with today's program, Successful Strategies for Navigating Growth in Transplant Cell and Gene Therapies, sponsored by Optum. Our speakers today are all from Optum. They are Dr. Lisa Latts.

Mary Ann Borer: Chief Medical Officer, Whole Health Solutions, Michael O'Day, Vice President of Product Management, Optum Transplant Solutions, and Marjorie Chen, Senior Director of Product. Welcome, all of you.

Lisa Latts: Thank you so much.

Lisa Latts: And, thank you, Mary Ann. I'll get us started. So, before we get into the substance of the conversation, I would like to ground you in who Optum Health Solutions is, and why we're here today. And to do that, I want to start with a simple idea.

Lisa Latts: Healthcare today is not lacking in capability, it's lacking in coordination.

Lisa Latts: Especially for people with complex or specialty needs. The system can feel fragmented, they're navigating multiple conditions, they have multiple doctors, they have a series of decisions to make, and it all can feel incredibly fragmented.

Lisa Latts: That shows up in a couple ways. First, inconsistent experiences for members, which is why, if you're negotiating anything in the healthcare system today, it can feel incredibly difficult. And then, unnecessary cost.

Lisa Latts: What we do at Optum Health Solutions is bring that system back together.

Lisa Latts: We focus on the moments that matter. Specialty care, complex conditions, high-impact journeys like oncology, maternity, and chronic disease, where the clinical and financial stakes are the highest.

Lisa Latts: And then instead of approaching these in isolation, we take a fully integrated approach to the member experience.

Lisa Latts: We guide people more effectively into the system, so they are not navigating it alone. It means bringing insight so that the care provided is appropriate and evidence-based. It means surrounding members with ongoing support, particularly when they're dealing with complex needs.

Lisa Latts: And at the same time, we are aligning that broader ecosystem around them, ensuring that we have high-performing networks that have value-based care, and that the care delivered and what is paid for are both accurate and efficient.

Lisa Latts: So when you step back, our role is not just to manage programs, it's to orchestrate that full care experience

Lisa Latts: Across conditions, across providers, across the financial model, in a way that improves outcomes and addresses the cost pressure that our clients are facing.

Lisa Latts: That's the lens I'd like you to keep in mind as we walk through the rest of the presentation today.

Lisa Latts: So, if the model is right, then you have this area of fragmentation.

Lisa Latts: And you apply it to one of the most complex areas, you quickly arrive at transplant and cell and gene therapies.

Lisa Latts: These are not typical care journeys. They're high cost, high risk, and deeply complex, requiring coordination across multiple providers, sites of care, and different points in time.

Lisa Latts: Success is not just the procedure itself, but it's everything that happens before, during, and after. And this is where the system tends to break down.

Lisa Latts: Managing these conditions requires much deeper integration, not just across clinical care, but across decision making, patient support, and how care is accessed in the first place.

Lisa Latts: So our approach is to bring these together in a much more intentional way.

Lisa Latts: At the core is combining three things.

Lisa Latts: Strong clinical guidance, so that the right decisions are made.

Lisa Latts: Active care management, so patients are supported throughout this journey. And then access to high-quality centers that are best equipped to deliver these highly specialized treatments.

Lisa Latts: When these elements are connected, rather than operating independently, we start to see a very different outcome. Better clinical results, a more supported member experience, and significantly more control over cost.

Lisa Latts: So, if the model we described is right, the question that we often get is, do centers of excellence really matter, or is it okay just to go to my local system, or go to my local hospital? Because it can be really challenging to travel, or to go somewhere else across the country.

Lisa Latts: Unfortunately, the answer is yes, it really does matter. When you look across transplants specifically, you see a very consistent pattern. Where a procedure is performed has a meaningful effect on outcomes.

Lisa Latts: These are not small differences. Across kidney, liver, heart, lung transplants, patients at high-performing centers of excellence consistently have higher survival rates, both for the patient and for the graft, compared to those delivered outside those care environments.

Lisa Latts: The gap is important because, as I mentioned in the previous slides, it's not just the surgery itself, but also the full ecosystem around it.

Lisa Latts: The experience of the team, the protocols they follow, how they manage complications, and how they support patients before and after the procedure.

Lisa Latts: So when we talk about integrating centers of excellence into the model, this is why.

Lisa Latts: So we're going to move now into some of the specific programs, and what you will see is how we are operationalizing this, and what you need to think about as you're thinking about programs that you want to offer to your own patients, clients, and members.

Lisa Latts: So, I'm going to turn it over to Mike for transplant.

Mike O'Day: Thank you, Dr. Latts. So I'd like to start with, giving a perspective around transplant utilization and cost. So, this is an important foundational thing to understand because it has implications to payers as they try to manage the financial risk of transplantation. SoÉ

Mike O'Day: So let's start big picture utilization. So, the numbers on this slide represent, transplants per 100,000, within different populations. So, this isÉ this is based on, some of Optum's data. These numbers are intended to be, just directional. Obviously, we see some variation around these numbers, but the key point on the slide is that

Mike O'Day: Utilization can vary pretty significantly based on the population, based on, you know, the line of business, and so forth, soÉ

Mike O'Day: So starting with commercial utilization. So, you know, we put this in there as a range between 15 and 20, and the reason for that,

Mike O'Day: If you look at Milliman, for example, Milliman, the actuarial and data company that tracks these numbers, you know, they peg that at about 19 per 100,000 for a commercial population.

Mike O'Day: We, we certainly see that in some of the data that we look at, but we do see, sometimes 14, 15 is not unreasonable for some commercial populations in certain parts of the country.

Mike O'Day: And then if you get into, say, exchange populations, which tend to sometimes have higher acuity within the population, as well as some adverse selection around transplantation.

Mike O'Day: we see utilization, higher in the 20, 24, 25 range. So, these are ballpark numbers, but that gives you a perspective on commercial transplantation.

Mike O'Day: From a Medicare perspective, think of that as roughly one and a half times commercial. This tends to be a sort of higher utilizing population. It's an older population.

Mike O'Day: high prevalence of ESRD, leading to kidney transplantation, also higher prevalence of some cancers that are treated with, with BMT. So, we tend to see utilization, 37 per 100,000 is, is kind of reasonable in this, in, in, in, in,

Mike O'Day: Medicare populations.

Mike O'Day: From a Medicaid perspective, this one's a little bit more of a wild card, as you probably know, thatÉ

Mike O'Day: states have multiple ways of organizing, Medicaid programs, so we do see a lot of variation around this number. This is intended to represent sort of your, what I'll call traditional Medicaid, so, you know, low-income qualifiers for Medicaid. Tends to run in the 9 to 10 range for utilization. If you get into the more complex populations for Medicaid.

Mike O'Day: the age-blind and disabled, for example. We can see numbers, you know, upwards of 30, 40, 50 transplants per 100,000 in some of those more complex, populations.

Mike O'Day: And then, some of the dual eligible populations, again, due to some of the clinical complexity and so forth, very high utilization in the 50 range, or roughly 2.5 times

Mike O'Day: Commercial in those much more complex populations.

Mike O'Day: So that's a little about utilization. Let's talk a little bit about how that translates into cost. So what we're displaying here on this slide is Milliman data. Milliman publishes a report roughly every 3 years,

Mike O'Day: the, U.S. Organ and Tissue Transplant Cost Estimate Report, and that's what this data is from.

Mike O'Day: So you'll see on the left-hand side of the slide there, the 19.04 transplants per 100,000 from the previous slide, that's how theyÉ where they pegged the commercial utilization.

Mike O'Day: And if you multiply that by, the $892,000, which is where, they are showing, weighted average bill charges for, for a transplant, that's itÉ now that's an average across.

Mike O'Day: All transplant types, so there's certainly some variation within transplant types, butÉ

Mike O'Day: Weighted average bill charges of $892,000 per transplant.

Mike O'Day: And you multiply those together, and you get an exposure of about $17 million for a, 100, life, group. So, some pretty significant, exposure for, for payers in this space.

Mike O'Day: If you look at the fact that 17 million in exposure is coming from only 19 out of the 100,000 members within that population, soÉ

Mike O'Day: And then someÉ some changes in those numbers, so even slight changes in utilization and cost can pretty significantly swing the overall exposure.

Mike O'Day: I do want to call your attention to just the middle of the screen there, in reference to those weighted average bill charges, soÉ

Mike O'Day: You can see over the years, through the various Millman reports, some pretty significant, trend on that, that cost. So, double-digit increases, through the years, over the various reports, that, that Millman, has produced.

Mike O'Day: Similarly, on the utilization side, if you look on the right-hand side, it's showingÉ that's, showing the change in utilization from the last Millman report. You'll see a 6.8% increase in utilization.

Mike O'Day: So, so we're seeing some increases in utilization and cost. Those, there are a number of factors that are, that are driving, that utilization and cost, and in the next several slides, I'll walk you through, some of what some of those factors are.

Mike O'Day: So, there's a number of factors that, again, are driving that change in utilization and cost. It isn't a single factor, it's really sort of a cumulative effect of.

Mike O'Day: sort of, you know, past epidemiology, present clinical and policy advancements, as well as future shaping technologies. And I've listed some of these here, but I'm going to go into detail on each of these in the subsequent slides.

Mike O'Day: So, something that is,

Mike O'Day: has been very, very consequential in the space, although, perhaps not immediately intuitive, is the opioid epidemic and how that has really driven increases in organ availability and subsequent organ transplant utilization.

Mike O'Day: So, if you take a step back and look, go back to 2010, roughly, at that point, roughly 1 in every 25 donated organs were a result of a drug overdose.

Mike O'Day: As the opioid epidemic took hold in the United States, that number dramatically increased, and sort of at the peak of the epidemic, 2022, 2023, that number had risen to 1 in 6.

Mike O'Day: organs that, came from a deceased donor were as a result of a drug overdose. So that's a pretty significant uptick.

Mike O'Day: You know, so more, more, more organs, available, more transplants resulting, and we saw increases through those years in transplantation, particularly in, you know, kidney, heart, liver transplantation. We saw, we saw increases through those years.

Mike O'Day: The interesting, the interesting thing here is that studies have shown that, the, results of both graft and, and,

Mike O'Day: patient survival from patients who receive a donated organ from an overdose death. The outcomes are very similar.

Mike O'Day: To non-overdose, donors, and, and so, it's, it's been, very, very impactful on, with, with, the, just the amount of organs that are available through, through donation from, from organ transplantation, or from, overdose death.

Mike O'Day: So, back to the previous slide, if you would, please. So one of the, so that's, the, the, overdose

Mike O'Day: deaths have primarily impacted solid organ transplantation, but I'd like to talk now about stem cell transplantation and some of the impacts that we've seen there as a result of some clinical advancements over the last few years. If you could go to slide 11, please, that would be great.

Mike O'Day: So, For those of you that maybe don't have a clinical background, maybe just a little quick

Mike O'Day: intro in terms of, of, of bone marrow or stem cell transplantation. So, there are basically two types of bone marrow transplants that are standard of care for certain types of cancers, and those are.

Mike O'Day: Autologous bone marrow transplants, or auto-transplants for short. Those are where, you use the patient's own cells, they are extracted from the body, and then,

Mike O'Day: re-infused after ablation treatment to try to attack the cancer. And then, an allogeneic bone marrow transplant is the second type of transplant. That's where

Mike O'Day: You're using cells from another donor, either a blood relative of the patient or an unrelated patient.

Mike O'Day: So the rest of this slide, I'll talk primarily about the allogeneic, stem cell transplants and some changes there, soÉ

Mike O'Day: What'sÉ what's changed clinically there, over the past number of years is that, there's really sort of three major clinical shifts, and I'm gonnaÉ I'll talk about two of them together, andÉ and thenÉ and then the third one. So, first is, donor matching barriers are falling.

Mike O'Day: And part of the reason those barriers are falling has to do with, improvements in

Mike O'Day: Treatment of complications, so graft versus host disease is a common complication with an alloÉ

Mike O'Day: genetic bone marrow transplant. And, so again, the science has evolved to make those treatments, much more effective. And what that's done is essentially expanded the donor pool.

Mike O'Day: So, as they're able to treat some of these complications, they are,

Mike O'Day: Able to, take people who would normally would, have, would not be a suitable donor for an unrelated match, for example.

Mike O'Day: AndÉ and they're finding that, studies are showing that, some of these, some of the transplants with unrelated donors or mismatched donors are actually producing sort of equal results, to a related donor, and so that's really expanded that, that donor pool.

Mike O'Day: And then the third thing that I would point to is the conditioning regimens for a bone marrow transplant. So, again, part of the process is to extract the cells.

Mike O'Day: Then provide, a conditioning or ablative therapy, to the patient, essentially treating them with, you know, with chemotherapy toÉ

Mike O'Day: To either, you know, knock out or weaken the cancer cells, and then re-infuse the cells back into the body so that they can then do their job to fight the cancer.

Mike O'Day: ThoseÉ those conditioning regimens have become much less toxic. Sort of historically, older and sicker patients had

Mike O'Day: trouble, sort of, handling that conditioning regimen, and as those have become less toxic, that has also expanded, again, the pool of individuals who can receive a bone marrow transplant.

Mike O'Day: Organ allocation policy,

Mike O'Day: Is that something that, has really gotten a lot of press over the last, last couple years, and, currently, is undergoing some pretty significant changes that are important to, to transplantation.

Mike O'Day: So I'llÉ I'll point to,

Mike O'Day: Sort of three overarching policy shifts that are currently going on.

Mike O'Day: So one is, trying to establish better governance and system modernization within the organizations that,

Mike O'Day: That, that are responsible for the organ allocation. So, the UNOS, the United Network for Organ Sharing, and, and OPTN, theÉ

Mike O'Day: Organ Procurement and Transplant Network are the two, organizations that are sort of collectively responsible for policy and allocation of organs.

Mike O'Day: And there is a drive to really driveÉ put more accountability and transparency into those organizations to try to improve the allocation of organs. And it's really a shift from

Mike O'Day: Just doingÉ just handling the organ allocation to now figuring out ways to

Mike O'Day: more efficiently allocate those organs. SoÉ

Mike O'Day: Again, a little background here. The U.S. today, discards significantly more organs than the rest of the world. Just as an example, kidney transplantation, the U.S. discards roughly 25% of those kidneys that come from

Mike O'Day: From donors, so one in every four kidneys is, is really going to waste.

Mike O'Day: And you combine that with the fact that, there's a significant shortage of organs. There are 13 people that die on the waitlist every day, waiting for an organ.

Mike O'Day: And that's really driven a shift into a much better focus on efficient use of organs.

Mike O'Day: The, the, the other, the second, sort of policy change that's, that's currently going on is,

Mike O'Day: A shift away from sort of a geographic-based model and trying to put more prioritization on medical urgency in terms of the allocation.

Mike O'Day: And so, a lot of the models and methodologies that are being used, or have historically been used for allocation purposes, are being examined, readjusted, and so forth to try to prioritize medical urgency.

Mike O'Day: And then the final policy shift, again, is related to the, again, the efficient use of the organs, and that's really a drive to focus, on reducing organ discard rates that I mentioned.

Mike O'Day: So looking at, using what we call extended criteria donors, soÉ

Mike O'Day: An example would be somebody who may have had liver disease. Some of those liver diseases can be treated very effectively now.

Mike O'Day: with medications, and those livers, which in the past would have been not considered suitable candidates for, for donation, now could potentially be a liver transplant candidate, soÉ

Mike O'Day: So those are some of the changes from a policy perspective that are going on that are, that are driving increases in transplant utilization.

Mike O'Day: So, a moment ago, we talked about some of the clinical advancements that are driving BMT utilization. This is, sort of the corollary on the cost side.

Mike O'Day: So we're seeing some advancements in pharmaceuticals that are really changing the economics of transplantation.

Mike O'Day: So, on this slide, I've included, some of theÉ some of the pharmaceÉ pharmaceuticals that we see in a transplant setting.

Mike O'Day: And you can see that the cost ranges vary pretty significantly, but I'll call out a few of these.

Mike O'Day: So, toward the top of the screen, some of these are not necessarily new pharmaceuticals, but ones that we see quite frequently. So, IVIG, rituximab, those are ones we do see relatively frequently, and in the grand scheme of things, they're relatively

Mike O'Day: cheap compared to some of the ones that you see on here, so in the $15,000 to sort of $50,000 range. As you move down the list, this is where we're starting to really see the impacts on, on cost. I'll call out,

Mike O'Day: your,

Mike O'Day: Rioncil, for example, is one of the new cell therapies, and this is something that Marjorie will get into

Mike O'Day: in a few slides here. One of the new cell therapies that comes with a very, very high price tag, you'll see, you know, $350,000 to $450,000 for, treatment associated with that. We're starting to see these show up in transplant cases, and it's having a real impact on cost.

Mike O'Day: Perfusion devices. This is another technology that has entered into the picture over the last few years.

Mike O'Day: So, traditional method of transplantation, you know, very low-tech, styrofoam cooler and ice,

Mike O'Day: you know, worked well initially, but one of the limitations of that is the potential organ damage that can occur with that transplantation method, and soÉ

Mike O'Day: A number of companies have come out over the years with, perfusion devices, so these are, you'll see a picture there of one from Paragonics.

Mike O'Day: This is one of the companies that, makes the perfusion device that will perfuse fluid through the organ as it's being transplanted, and that allows the organ to minimize damage to the organ during transplantation.

Mike O'Day: It, you know, arrives in better condition, results in better outcomes as a result of that. Allows the organ to be transplanted longer distances, and so forth. So, some real advantages to using these devices.

Mike O'Day: But they come with a cost. So, we've estimated, based on some of the data that we've seen, that these devices are adding between $20,000 and $90,000 to the organ acquisition cost, when, in transplantation.

Mike O'Day: And those numbers are kind of borne out in some of the data that we see in some of the Medicare D4 cost reports from some of the facilities. So on the right-hand side of the slide here, we're showing

Mike O'Day: What we've seen in terms of increases in organ acquisition costs from some of these facilities, and you see a pretty steady uptick, starting in about 2022 as these, these devices came on the market, and this is just only going to continue to increase as

Mike O'Day: The uptick of, of these, devices, continues.

Mike O'Day: So, taking a little bit of a look ahead here,

Mike O'Day: And talk about xenotransplantation. So, if you have followed the transplantation space, you've probably heard of xenotransplantation. There have been a number of, sort of, high-profile articles that have been in the news, of late.

Mike O'Day: But just in case you haven't heard of xenotransplantation, this is essentially grafting or transplanting organs or tissues between members of different species, and in this particular case, we're primarily talking about,

Mike O'Day: pigs, pig organs, as, as it, as it happens, pig organs, biologically, genetically, and, and so forth, tend to be.

Mike O'Day: A pretty good, option in terms of, xenotransplantation.

Mike O'Day: The organ size is very similar to human organs, and then they can very easily be genetically modified to help reduce some of the complications with the transplantation, and so that's why pigs have been a target of this science.

Mike O'Day: If you look at the timeline, so 2021, some of the initialÉ

Mike O'Day: you know, first pig-to-human transplants, kidney transplants occurred. Those occurred in,

Mike O'Day: deceased, or brain-dead, recipients. However, they, they were able to keep these, these organs, functioning very well, within,

Mike O'Day: within those, those recipients, for quite some time. So, those, those were the first, you know, forays into, into xenotransplantation. It's evolved pretty quickly, and within 5 years, it's really evolved from.

Mike O'Day: a proof of concept to, recently the most, an FDA-approved clinical trial in early 2025.

Mike O'Day: I mentioned the, the, the genetic modification, one of the, one of the other, advancements in, in some of the, some of the, the, the, pig-to-human transplants, that have occurred.

Mike O'Day: They've been able to, again, genetically modify, the pig organs to essentially knock out the gene that's responsible for organ rejection, and, and that's resulted in sort of more success with, with this particular type of,

Mike O'Day: Type of, of, transplantation.

Lisa Latts: Thanks so much, Mike. We're going to switch gears now to cell and gene therapies. Before I hand it over to Marjorie to go into detail, I thought we would do, again, a little foundation. So, many of you probably don't know what we mean when we say cell and gene therapy, and Marjorie is going to explain that.

Lisa Latts: But even if you don't know what it is, I am sure you've seen this in the news. So there have beenÉ

Lisa Latts: many, many, headlines about these gene and cell therapies that we're going to talk about. They areÉ

Lisa Latts: groundbreaking. They are treating, for the first time, diseases that were untreatable, that resulted in death, resulted in severe morbidity.

Lisa Latts: And for the first time, we are seeing hope for adults who hadÉ adults and children who had some of these conditions. Unfortunately, these conditions, as you probably would expect, come at a cost.

Lisa Latts: So, these cures, and many of them are cures, are literally million-dollar or more multi-million dollar cures. And so, some of those things we're going to have to grapple with

Lisa Latts: as a healthcare system, as a society, is how do we value a life? How do we value

Lisa Latts: An individual who has one of these conditions, and then provide these costs, these treatments, which are so costly, but literally life-saving, and reduce morbidity as well as mortality.

Lisa Latts: We've also seen incredible expansions in the CAR-T space, which we'll also talk about, which are

Lisa Latts: Literally revolutionizing how we think about cancer, how we think about treatment for some of our oncologic diseases as well, and we're seeing long-term survival and long-term cures

Lisa Latts: for cancers that were previously not survivable, and had very, very low long-term survival rates. So, just wanted to give you a little framing as we think about these diseases, and with that, I'm going to turn it over to Marjorie, who's going to take you into some detail.

Marjorie Chen: Alright, thank you, Dr. Latts.

Marjorie Chen: So what is cell and gene therapy? This can be broken down into certain key terms. So, cell therapy is the transfer of cells into a patient with the goal of improving a disease.

Marjorie Chen: For example, Mike mentioned Ryoncil as a cell therapy. Stem cell transplants are also considered cell therapy. Gene therapy is the introduction, removal, or change in genetic material in the cells of a patient to treat an inherited or developed disease.

Marjorie Chen: Typically, genetic material, such as a working copy of a gene, is then transferred into the target cell, using a vector or delivery mechanism. So an example is Zolgensma for spinal muscular atrophy.

Marjorie Chen: Which delivers a functional copy of a spinal motor neuron gene, so the body can produce the protein patients are missing.

Marjorie Chen: And then we have gene-based cellular immunotherapy. So some therapies can be considered both cell and gene therapies. In this case, a good example is a CAR-T cell therapy, which involves insertion of genetic material into immune cells to then enable them to attack malignant cancer cells.

Marjorie Chen: And then there's two primary approaches to cell and gene therapies, so in vivo and ex vivo. In vivo therapy delivers genetic material, directly into the patient's body.

Marjorie Chen: Either systemically, through infusion, or locally to a specific organ, and then where the gene works inside the cell to produce a functional protein. Ex vivo takes place outside the body, so, this is where a patient's cells are collected, genetically modified in a lab, and then reinfused back into a patient. So both approaches aim to correct disease at the genetic level.

Marjorie Chen: But they differ significantly in treatment process, infrastructure needs, and costs.

Marjorie Chen: And so really understanding these differences is critical because they drive clinical complexity, site-of-care decisions, and financial impact for health plans.

Marjorie Chen: The cell and gene therapies are among the most, innovative advances in medicine, offering potentially curative treatments for serious conditions.

Marjorie Chen: But these therapies, you know, they have that potential to transform lives, like Dr. Latts mentioned before, but they do impose a substantial financial burden on health plans.

Marjorie Chen: And cell and gene therapies are among the highest cost treatments globally.

Marjorie Chen: So then access does come at that high price tag, right? So cell and gene therapy drugs cost, or the WAC price alone ranges from about half a million dollars to over $4 million, and that $4.25 million gene therapy is considered the most expensive drug in the world today.

Marjorie Chen: In addition, there's provider markup on drug costs and associated medical costs that are also related to that episode of care. And then.

Marjorie Chen: This space is also rapidly growing, expanding from just, you know, 3 biologics, treatments back in 2017 to more than 30 by the end of 2025, many more in the pipeline of 20-plus that we expect to see in the next couple years.

Marjorie Chen: And then the patient journey itself is also very complex, requiring specialized sites, personalized care, and significant coordination.

Marjorie Chen: And here you can see the robust pipeline for these therapies.

Marjorie Chen: So there's really just tremendous activity in this space.

Marjorie Chen: You can see there's hundreds of active clinical trials at each stage, and then funneling down to a little bit less in Phase 3. So we, we track all of these, monitor these in the pipeline to just be able to anticipate what's getting closer to FDA approval, and what is going to come down to us.

Marjorie Chen: The cell and gene therapy market is reaching a clear inflection point, with approvals accelerating and costs rising quickly. So here you can see that, you know, since 2017, FDA approvals have

Marjorie Chen: steadily increased, moving from that first wave of CAR-T therapies into that broader era of gene therapy.

Marjorie Chen: I mean, in looking aheadÉ

Marjorie Chen: The pipeline continues to expand, driven by technology advances, strong investment, and continued regulatory approvals.

Marjorie Chen: But really, at the same time, the treatment pathways and COST do vary widely, so making these therapies difficult to manage with traditional, approaches.

Marjorie Chen: So the rapid growth in this space increases both utilization and financial exposure to health plans. And so, really, as the market continues to scale rapidly.

Marjorie Chen: Plans do need comprehensive end-to-end solutions to manage complexity and cost and risk here.

Marjorie Chen: And this slide shows the FDA-approved ex vivo therapies in more detail. So on the left, you can see cellular immunotherapies, which includes the CAR-Ts, the tumor-infiltrating lymphocytes, and the T-cell receptors.

Marjorie Chen: The CAR-Ts treat blood cancers, leukemia, lymphoma, myeloma, and then the TILs and TCRs treat some solid-stage tumors, like metastatic melanoma and synovial sarcoma. The biologic price for these therapies is right around that half a million dollar mark, you know, ranging from $462,000 to $781,000.

Marjorie Chen: The table on the right shows the ex vivo gene therapies

Marjorie Chen: which treat them, the rare genetic conditions, like beta thalassemia, sickle cell disease, and metabolic disorders. The biologic price for the gene therapies are much higher, and they range from $2.2 million to $4.25 million per treatment, and so essentially they're 3 to 9 times more expensive than the cellular therapies. So, the gene therapies, I would say, tend to,

Marjorie Chen: you know, treat the more ultra-rare conditions with the cellular therapies, treat moreÉ some of the more common cancers. They both, though, create that significant financial exposure.

Marjorie Chen: AndÉ I'm sorry, couldn't you go to the slide? Yep, there we go, thank you. So really, in action, the contractingÉ this contracting strategy significantly reduces volatility.

Marjorie Chen: Seen across bill charges to provide greater financial predictability, less risk, and more consistent outcomes for plans managing cell and gene therapy exposure.

Marjorie Chen: It shows the bill charges, and the bill charges for CAR T, they vary widely, with half of the cases ranging from $1.4 million to $2.8 million.

Marjorie Chen: And then, after applying our contracting approach, and then to the table to the right.

Marjorie Chen: The paid charges for CAR-T are far more predictable, with the middle 50% of the cases falling between $575,000 and $766,000. So that means, you know, we're reducing that variability from that $1.36 million range or swing in bill charges to less than $200,000 in paid charges. So really.

Marjorie Chen: justÉ

Marjorie Chen: you know, providing that predictability, that plans are looking for. All right, and now I'll hand it back over to Dr. Latts to close us out.

Lisa Latts: Thank you, Marjorie. So, what we were hoping to do here today is give you a little bit of a grounding in these areas that are life-changing, very complex.

Lisa Latts: and very expensive. And a little bit about the Optum Health Solutions approach to how we address these challenges, both to the healthcare system and how we help patients maximize outcomes and value for the employer and for the payer.

Lisa Latts: With that, Mary Ann, I'll turn it back to you, and we can open it up for questions.

Mary Ann Borer: Fantastic. Thank you so much to all of our speakers for a wonderful discussion. And I do want to remind our audience that you can continue to submit questions via the Q&A window in your media player. So here's our first question.

Mary Ann Borer: What strategies and considerations should payers be thinking about in terms of managing the costs and complexities posed by transplantation and cell and gene therapies? Mike, you want to start with that one?

Mike O'Day: Yeah, sure, I can, I can, start us off.

Mike O'Day: So, we've seen, with, with payers, sort of,

Mike O'Day: One of three strategies, or a combination of those strategies, that, that are effective.

Mike O'Day: So the first thing I would point to is, aroundÉ around the network. So, you know, these are very, as we've talked about, very complex cases. They, can occur over a long period of time.

Mike O'Day: it's a long episode of treatment, and obviously the costs can be very high. And so, you do not want to be paying, you know, bill charges, percentage of bill charges on, some of these treatments and so forth. And so, it's important that you get access to

Mike O'Day: A network, an effective network that has, you know, case rate pricing that can really help you control the costs of, you know, of some of these therapies and conditions.

Mike O'Day: So, so that's the first thing, would be the network. You know, a second strategy that we see, utilized sometimes in combination with the network is, just, you know, standard reinsurance or stop loss, right? I mean, that, that, that certainly can be effective in terms of limiting the upside risk of,

Mike O'Day: Some of these, the volatility that occurs with some of these, these innocents.

Mike O'Day: But there are challenges with that strategy.

Mike O'Day: you know, oftentimes there are, lasers that are involved in which an individual may be carved out of that risk, and so therefore that would fall back to the plan. As well as, you know, there are oftentimes deductibles. As I mentioned, these are long episodes of care. They'll oftentimes

Mike O'Day: Sort of span various treaty years, and so there could be dual deductibles involved in that sort of, sort of strategy.

Mike O'Day: So, so a third, approach, is sort of a full risk transfer, so, looking to, organizations to help offload that risk, or carve out that risk from the health plan.

Mike O'Day: That can also be an effective strategy that's available, particularly in the transplantation space, and is coming in some of the cell and gene therapy space as well.

Mary Ann Borer: Fantastic. Marjorie, Dr. Latts, anything to add?

Marjorie Chen: I think Mike covered it. He did a great job going through that.

Mary Ann Borer: Here's our second question. What changes have you seen, or do you expect to see in the future in solid organ and bone marrow transplantation utilization as a result of the current emergence of these cell and gene therapies?

Mike O'Day: I can, I could start that one, and then I would welcome, thoughts from, from Dr. Latts and Marjorie, but,

Mike O'Day: So, one of the things, as, as CAR-T, for example, enters the picture, has entered the picture, we've seen CAR-T move from

Mike O'Day: what used to be a third, fourth, fifth-line treatment, up in the continuum to closer to a second-line treatment, and actually, in some cases, first-line treatment. And so what that's doing is, it's not necessarily reducing reducing the number of bone marrow transplants that are occurring, but it is

Mike O'Day: causing a shift in terms of the mix of bone marrow transplants. So, in some cases, we're actually seeing decreases in

Mike O'Day: the auto BMT transplants that I mentioned, and a slight increase in the allo transplants, just again, as a result of the change in dynamics, with some cases, CAR-T being an option, other cases, you know, the BMT, it's just changing that mix a little bit.

Lisa Latts: Yeah, and I would just add that as we get more data on long-term survival and see

Lisa Latts: consistent improvement in outcomes. You know, as Mike said, it's going to continuously change what gets moved up to first, second, and third line, so that outcomes are maximized, and youÉ and you do what's more cost-efficient, even if

Lisa Latts: The more expensive treatment is first line, because we know that it's going to last longer, and you're going to have a better outcome and better survival. But it may mean more upfront cost.

Marjorie Chen: Right. Yeah, and I agree with what others have already shared. And in this space is, you know, offering solutions that previously there were either none, or stem cell transplant was the only way to go, so it is, you know, mixing things up here. And I think we'll continue to see that as

Marjorie Chen: more of these therapies do come out and get approved with CAR-T, especially in the coming years, expanding beyond the leukemias and blood cancers to even autoimmune. So I think this will be interesting to continue to watch and track here.

Mary Ann Borer: Right, and here's our next question. What should executives be considering now to ensureÉ sorry, I forgot that again. Here's our next question. What should executives be considering now to ensure equitable access and consistent patient experiences as advanced therapies continue to expand?

Lisa Latts: I can, I can start with this one. So, so, great question.

Lisa Latts: We know that these therapies are not equitably distributed across populations, across racial and ethnic minorities, across disadvantaged populations equally. Some of that is a reflection of the payer system.

Lisa Latts: But it's also a reflection of trust and, and,

Lisa Latts: level of engagement and encounters with the healthcare system, and so I think this is where things like second opinions and access to specialists in various communities, you know, people who look like me kind of things can really help as you look at what helps to ensure that individuals who need care have access to the best care for their

Lisa Latts: In the most in the environment that's most likely to lead to the best outcome.

Lisa Latts: So that's where some of the kind of programs that we are looking at, or that others have, that really ensure equitable access to information, travel benefits, for example, second opinions, things like that, can be hugely beneficial.

Lisa Latts: Mike, Marjorie, anything toÉ

Marjorie Chen: No, I second that. I think that care coordination and that travel and lodging benefit, like, especially to reach areas that may be underserved populations to allow and support kind of that ability to access that care, I think those areÉ those are, key things toÉ to implement in benefits.

Mary Ann Borer: So our final questionÉ

Mary Ann Borer: How are payers adapting their benefit designs to accommodate the increasing use of these high-cost therapies, like CAR-T and other cellular treatments?

Marjorie Chen: I canÉ I'll start with that one, and others can chime in. So for cell and gene therapy, so we'reÉ we're seeing payers, you know, moving beyond that traditional pharmacy or medical benefit silos, because this space really

Marjorie Chen: hovers both worlds. We do see some payers that tend to lean more on their experience on the pharma side, and others kind of lean more on the experience on their medical side. But really, the teams are, like, coming together to adapt and, and create benefit designs

Marjorie Chen: for these therapies. We're seeing, payers establishing medical policies for these treatments, prior auth and prior notification processes.

Marjorie Chen: To manage these, like, very high-cost treatments. So, like, in our program, specifically.

Marjorie Chen: We have specialized medical directors and nurses that help focus and have experience in this space and these conditions to help manage these and review these cases. And then, really beyond that,

Marjorie Chen: Some, you know.

Marjorie Chen: may choose, like, such as in our case, to have that dedicated nurse case management. You provide that care coordination, so that patient education, the care navigation or clinical oversight throughout that whole member treatment journey.

Marjorie Chen: Which can help with outcomes and managing costs, soÉ

Marjorie Chen: And then I know Mike has mentioned that importance of network design earlier, and that having either a narrow network or a centers of Excellence network, which is what we've done. And so we've got, you know, with those networks in place, their specialized expertise, they have that infrastructure, negotiated rates.

Marjorie Chen: And,

Marjorie Chen: And then, for us specifically, again, you know, we focus on that entire episode of care, so it's a drug cost and the medical. You see some plans may focus more on the drug costs alone. They also may lean more into, like, the specialty pharmacy side of things. Ours is a little bit more comprehensive here.

Mike O'Day: Yeah, I would just add, Marjorie, sort of around the network design, you know, if you go back to one of the first couple slides that Dr. Latts shared about the importance of the COE, you know, we are seeing, you know, theÉ

Mike O'Day: not all COEs are created equal as well, right? And so, what we're seeing is plans looking at

Mike O'Day: Sort of, you know, preferred or more narrowed networks that are focused on

Mike O'Day: those real high-quality centers that can, really deliver for these very, very complex conditions. So, that's really important to consider that in the benefit design process, too.

Mary Ann Borer: Wonderful. At this time, we do have to wrap up, and thanks again to our speakers for all of your insights.

Lisa Latts: Thank you.

Marjorie Chen: Thank you.

Mike O'Day: Thank you.

Mary Ann Borer: And once again, we do want to thank our sponsor, Optum, for their support of this webinar.

Mary Ann Borer: For our audience, don't forget to take our brief evaluation at the end of today's event and share your thoughts with us.

Mary Ann Borer: As a reminder, you'll receive an email within 24 hours to re-watch the on-demand recording of today's session, and it'll be available in the HIMSS Resource Hub for a limited time, so feel free to come back and watch at any time. Thanks, everyone, and have a terrific rest of your day.

Lisa Latts: Thank you.