Solving for Patient Access: Quantile Health’s Financial Innovation for Cell and Gene Therapy
By Sidra Ahmed and Jimmy Teng
At Munich Re Ventures, we’ve put a lot of thought into how best to finance access to Cell and Gene Therapies (CGTs), as well as the challenges that our healthcare system — including payers, pharmaceutical companies, and employers — must collaborate on. We believe the first step forward in facilitating widespread access to CGTs is a new underwriting model for these transformative, yet expensive, therapies.
Today, not only do CGTs come with expensive price tags, but underwriting them through traditional insurance and reinsurance models adds to the complexity and cost of coverage. With the expectation of 10–20 new therapies being approved each year, this problem is only expected to worsen over time. Some payers have already lasered out CGTs from their policies (ie. removing coverage from an insurance policy to be covered under a higher specific deductible), thereby restricting access to these life-saving therapies.
As the self-insured employer population increases in the US, employers are now responsible for 65% of US employees’ medical claims. Fundamentally, self-insured employers manage risk by retaining what they consider predictable risks and transferring away unpredictable risks. Risk transfer is usually accomplished with reinsurance, and in most cases through stop-loss insurance — a mechanism used by self-insured plans to mitigate against catastrophic and unpredictable financial losses.
Stop loss has served as an effective tool in transferring risk to cover organ transplants and other expensive procedures; however, in the case of CGTs, as risks are fluid and still evolving, new models of risk transfer should be considered as well. The reason behind this boils down to what we’ve described previously as growing frequency intersecting with high severity.
An accelerating pipeline of CGTs moving through the FDA approval process creates risks that require new approaches in underwriting. It is hard to efficiently price risks that change at the pace of biomedical innovation, particularly when covering diseases that are more common, and therapies that are expensive and less proven.
When we first met Yutong Sun last year, she brought a solution so simple, and yet so elegant, to the CGT financing conundrum. Why not work directly with the manufacturers to underwrite the utilization risk? Her company, Quantile Health, offers a subscription payment platform for manufacturers to offer therapies directly to payers. Through the platform, payers are covered for any number of therapies needed and won’t have to worry about coverage, portability, and efficacy. Pharmaceutical companies can expand access by providing the guarantee at little to no incremental cost — a win-win for both parties.
In our discussions with Yutong’s co-founder, Peter Hancock (former CEO of AIG), we were compelled by his guiding principle of placing risk from high-cost to low-cost environments. In this case, Quantile is placing risk at the lowest cost environment with the manufacturer. As we explored whether pharma and payers would be open to such a solution, we heard a resounding yes — and indeed, that the solution was not only feasible but vital. Payers were interested in covering these therapies at a reasonable cost, and manufacturers were eager to share risk if it meant expanding access. We believe that as Quantile Health continues to build out their innovative infrastructure for payments, value-based agreements, and underwriting, they are poised to topple the first domino of widespread CGT accessibility.
We are privileged and excited to be partnering with Yutong and her co-founders, Peter Hancock and Andrew Lo. By leading Quantile Health’s Seed round alongside First Round Capital and Correlation Ventures, we embrace their mission to make transformative medicine accessible to every patient. From CGT collaborators and stakeholders, we have heard loud and clear that now is the time to build. We’re excited for the Quantile Health team to grow and their partnerships to expand — all as they work towards this ambitious, but critical, undertaking.
If the topic of Cell and Gene Therapy utilization is top of mind for you or your organization, please don’t hesitate to reach out for an introduction to the Quantile Health team.
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Munich Re Ventures (MRV) is the venture capital arm of Munich Re Group, one of the world’s leading providers of reinsurance, primary insurance, and insurance-related risk solutions. With more than $1 billion in assets under management, Munich Re Ventures invests in the most innovative start-ups transforming the future of risk and risk transfer. MRV’s experienced investors are financially-driven while focused on the strategic interests of Munich Re and the broader insurance industry. MRV works closely with Munich Re Group businesses across the globe to fund and partner with the best emerging companies developing new technologies and business models — and risks — for tomorrow’s world.
