The Access Gap: Why Australia Must Rethink Reimbursement for Cell and Gene Therapies

Advances in cell and gene therapies are reshaping the future of medicine. Treatments such as CAR T therapies are delivering unprecedented outcomes for patients with previously untreatable diseases. Yet the systems designed to evaluate, fund and deliver healthcare have not evolved at the same pace.

For Australia, this creates a difficult tension. While the country maintains strong regulatory standards and health technology assessment processes, patients are often waiting years for therapies already available elsewhere.

According to Warwick Shaw, Market Access Lead for Cell and Gene Therapies at Johnson & Johnson and a contributor to the Medicines Australia Rare Diseases Working Group, the challenge is no longer scientific. It is structural.

“The therapies are here. The science works. The question now is how quickly we can build systems that allow Australian patients to access them,” he says.

A System Designed for a Different Era

Australia’s reimbursement pathways were developed primarily for traditional pharmaceuticals produced in large batches and delivered through established prescribing systems.

Cell and gene therapies operate very differently.

Many of the therapies emerging from the current development pipeline are personalised treatments. CAR T therapies, for example, involve extracting a patient’s immune cells, genetically modifying them in specialised facilities, and reinfusing them to target cancer cells.

This process introduces complexities that conventional funding systems were never designed to handle.

Key differences include:

• Individualised manufacturing rather than batch production

• Highly specialised clinical delivery environments

• Complex logistics and chain-of-identity requirements

• Treatment costs that can exceed $200,000 per patient

Under Australia’s National Health Reform Agreement, therapies exceeding this cost threshold and lacking an existing diagnostic reference group are classified as highly specialised therapies.

These therapies follow a different pathway from standard pharmaceuticals.

Rather than the Pharmaceutical Benefits Advisory Committee, they are typically assessed by the Medical Services Advisory Committee (MSAC) and funded jointly by the Commonwealth and state governments.

That shared funding model is where many of the system’s challenges begin.

The Complexity of Highly Specialised Therapy Funding

Unlike most medicines in Australia, highly specialised therapies are funded through a hybrid structure.

Under the current framework:

• The Commonwealth funds 50 per cent of therapy costs

• State and territory governments fund the remaining 50 per cent

• Delivery is restricted to public hospitals

• Implementation decisions are made at the state level

This structure reflects the historical origins of early therapies such as paediatric blood treatments. However, as Shaw notes, the model is becoming increasingly strained as the volume of cell and gene therapies grows.

“It is unusual that states are being asked to fund therapies directly,” he explains. “Their traditional role is delivering hospital services, not paying for medicines.”

The result is a complex approval and implementation process that requires alignment between multiple levels of government.

State health departments are invited to provide input during MSAC assessments, particularly on implementation issues such as hospital capacity, clinical infrastructure and workforce requirements.

While technically advisory, this feedback carries significant practical weight.

“If the implementation pathway is unclear, that often becomes a key reason for delays or rejections,” Shaw notes.

When Innovation Outpaces Access

The consequences of this complexity are increasingly visible.

Global development of cell and gene therapies is accelerating rapidly, with thousands of clinical studies currently underway.

Yet Australian access remains comparatively slow.

Analysis by the Medicines Australia Rare Diseases Working Group highlights a significant lag:

• On average, therapies are approved by the TGA about 1.4 years after US regulators

• Reimbursement decisions follow roughly 1.5 years later

• Total delay to patient access can reach three to four years

For patients with aggressive diseases, these timelines are critical.

“In many cases these therapies are last-line treatments,” Shaw says. “Patients simply do not have time to wait years.”

Access Inequity Across the Country

Even after reimbursement approval, access remains uneven across Australia.

CAR T therapies, for example, are currently delivered at a limited number of treatment centres. Some jurisdictions still have no access at all.

This creates significant geographic disparities.

Analysis of early access data shows:

• More than half of patients travel over 100 kilometres for treatment

• Nearly one in five travel interstate to receive therapy

• Many must remain near treatment centres for weeks following infusion

For patients who are already seriously ill, this level of displacement places additional emotional and financial strain on families.

“It means leaving home, leaving support networks and staying in unfamiliar cities while undergoing intensive treatment,” Shaw explains.

Managing Uncertainty Through Outcomes-Based Payments

One of the most innovative responses to the uncertainty surrounding these therapies has been the introduction of outcomes-based reimbursement agreements.

Rather than paying the full cost upfront, governments and manufacturers may structure payments around patient outcomes.

These arrangements typically include:

• Initial payment upon successful infusion

• Additional payments linked to clinical milestones

• Performance metrics based on remission or survival outcomes

Such agreements allow early access while managing financial risk for the healthcare system.

“If the therapy delivers the outcomes seen in clinical trials, payment follows,” Shaw says. “If not, the risk is shared.”

This model has already been used for several CAR T therapies in Australia and is increasingly viewed as a viable pathway for other high-cost precision treatments.

Rethinking the National Framework

A series of reviews across the Australian healthcare system have begun to examine how reimbursement pathways must evolve to accommodate advanced therapies.

One major focus is the Health Technology Assessment Review, which includes recommendations aimed at accelerating access and improving implementation.

Among the proposed changes:

• National implementation plans within three months of pricing agreements

• Patient access within six months of regulatory approval

• Greater consistency across states and territories

• Improved integration of real-world evidence

For Shaw and many in the sector, however, the most important reform may be simpler.

Move the funding of highly specialised therapies fully to the Commonwealth.

Removing therapy costs from state budgets could allow states to focus on their core strengths: delivering hospital services and ensuring treatment infrastructure is available.

Practical Takeaways for the Life Sciences Sector

The experience of cell and gene therapies offers broader lessons for policymakers, industry and healthcare leaders.

1. Implementation matters as much as clinical evidence

Health technology assessments increasingly evaluate delivery infrastructure, not just efficacy.

2. Federated funding models can slow innovation

Multi-jurisdictional funding arrangements introduce complexity that may delay patient access.

3. Outcomes-based reimbursement is becoming essentia

lRisk-sharing agreements may become the default model for high-cost therapies.

4. Workforce and infrastructure planning must start earlier

Clinical capacity, accreditation and site readiness need to be built alongside regulatory submissions.

5. Equity of access remains a national challenge

Geographic disparities highlight the need for coordinated national implementation frameworks.

Looking Ahead

Australia’s life sciences sector stands at a turning point.

Breakthrough therapies that once seemed theoretical are now entering clinical practice. The challenge is ensuring the systems designed to govern healthcare evolve quickly enough to support them.

For Shaw, the goal is not simply faster approvals. It is building a system capable of delivering advanced therapies safely, equitably and sustainably.

“These therapies are transforming what medicine can do,” he says.

“The question for Australia now is whether our healthcare system can transform just as quickly.”

If it can, the next generation of treatments may not only change the course of disease, but redefine what timely access to innovation looks like for Australian patients.