LA JOLLA, Calif. – Stem cells offer promising new treatments, but panelists at a session during the annual Stem Cell Meeting on the Mesa warned the audience that the treatments' unique features pose challenges to gaining reimbursement.

"There is no special treatment for cell therapy," said Matthew Durdy, chief business officer at Cell Therapy Catapult, a London-based not-for-profit tasked with promoting the cell therapy industry in the UK.

Like other treatments, cell therapies undergo a rigorous analysis at individual health insurance agencies and single-payer systems in Europe to determine whether the treatment is medically necessary. First and foremost, there must be strong scientific evidence that the product is clinically superior to the current standard of care.

"The burden of proof for your technologies is probably higher than for most of the other technologies," Stephen Crawford, medical senior director at Cigna Lifesource Transplant Network, told the audience.

That's because, Crawford explained, the insurance industry was "burned" by the use of autologous stem cell transplant to treat breast cancer in the late 1980s. Treatment appeared effective in preliminary data, but turned out to kill more women than it saved. "When we look at a new technology, the question is always, 'Is this autologous transplant in breast cancer all over again?'"

Beyond clinical trial data, the analysis also takes into account peer reviewed papers, opinions of clinicians, and whether competitor insurance companies are covering the treatment.

The analysis noted the opinions of professional medical societies, but panelists added that their weight on the decision to cover treatments has diminished. "Professional medical and scientific societies exist to serve their members," Crawford said. "They tend to recommend things that will generate revenue for their membership."

As has become the case for all treatments over the last few years, FDA and EMA approval is necessary for reimbursement, but it's no longer sufficient.

When it comes down to it, regulators and payers have different goals that don't always overlap. "The FDA and other regulators have absolutely no intention of buying your product," Durdy summed up the difference for the audience.

Cell therapies have an added issue because they often produce large clinical effects in areas of high unmet need, which can result in early approvals by marketing authorities. While the limited data may be sufficient for approval, there may not be enough long-term experience to justify paying for the treatment.

While cost is a factor in making coverage decisions, panelists stressed that efficacy and safety are always factored in first and should be companies' top priority.

"Cost is absolutely the last thing we look at. If you're inferior to the standard of care, and you cost $1.23, I don't care. You're inferior to the standard of care and cost doesn't matter," Nicholas Anderson, medical technology analyst at Salt Lake City-based Intermountain Health Care Inc., told the audience.

But, of course, cost is eventually factored into the reimbursement decision, especially for single-payer systems in Europe where cost tends to be given consideration relative to the added value the new treatment provides compared to the current standard of care.

"The bar is getting higher," explained Stephen O'Malley, vice president, practice head U.S. payer engagement at value strategy consulting firm Pricespective. "When a new technology gets approved, it has to come at the expense of something else."

Many cell therapies run into an added problem if they're one-time treatments that replace existing therapies that are given over a lifetime. While their high cost may still be a good long-term deal, pushing costs that are spread over decades into a single payment is problematic for U.S.-based insurers where patients often switch insurers.

Single-payer systems can take a longer-term view since they'll be covering the same patient in the future. But the single-payer systems are still limited by their budgets in any given year.

The solution will require some financial engineering, possibly with an initial payment followed by a yearly maintenance fee if patients continue to respond to the treatment. While the framework is simple, determining the actual payments and requirements for getting the payments is hard, especially without long-term efficacy data.

"In the absence of data, the manufacturer is always going to have to take the risk," Durdy said, recommending companies keep their cost of goods low to allow for wiggle room on the size of the initial payment from payers.