Drug matching services offered by genomics companies are emerging that can more accurately prescribe medications for chronically ill patients. The implications for employers who provide health insurance for large employee groups are cause for optimism: Money now misspent on drugs for plan members that aren't helping them will be saved, while those same patients will get healthier once they are on the correct medications.

But not all genetic innovations will have such win-win outcomes for plan sponsors. Researchers are beginning to spin out genetically based therapies that can alter a person's genetic makeup and, in so doing, prevent or cure previously deadly conditions. But these therapies will costs hundreds of thousands of dollars per patient. And the question facing payers is: Who will pay, and how will that who pay it?

Consulting firm Charles River Associates recently posed these questions to representatives of the payer community. What the survey found was that no consensus yet exists about how these vast sums will be met. On the one hand, the therapies can hardly be withheld from those who cannot pay. And, in the cast of employer plans, the payer has at least some obligation to make such therapies available. On the other hand, the current model for paying for highly effective treatments (think: the Hepatitis C drugs) would collapse under the weight of the cancer curative therapy costs.

"High-cost curative therapies introduce many new considerations related to pricing and reimbursement," said Charles River's Matthew Majewski, vice president of the firm, wrote in an article for The Pharma Letter. "Many will have narrow treatment windows and small patient populations that could restrict the opportunity for manufacturers to maximize commercial success. There may be significant costs for hospital procedures and protocols associated with administration of these therapies. In addition, the introduction of many new high-cost therapies in a condensed period could lead to a major spike in overall healthcare costs."

Majewski cited three major payer concerns:

The impact of these therapies on health care costs tend to be "front loaded," with the highest impact felt in the first year following launch.
Costs will typically diminish over time as appropriate patients complete treatment.
Manufacturers may be unable to provide the level of long-term safety and efficacy data needed to position payers to assess the cost effectiveness of a curative therapy over many years. The potential budget impact will likely require entirely new and previously untried payment models.

In other words, employer plan sponsors and brokers should brace themselves for yet another health insurance disruption. In a world where everyone wants to be cured of disease and everyone who participates in the cure wants to get paid, the employer will feel the squeeze.

A likely outcome: the creation of yet another risk pool, this one co-founded by the federal government.

Other options have been floated, including payment to manufacturers only upon successful outcomes, and annuity type payments which prolong the pay period.

But, as Majewski notes, a solution needs to be identified sooner rather than later, because the accelerated pace of new therapy development is tossing off new drugs that people will be demanding. And as we saw with the Hepatitis C "designer" drugs, withholding treatment based on an inability to pay will not be tolerated.

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How much will gene therapy cost employers?

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