CAR-T has changed cancer treatment—but it is also exposing the limits of today's healthcare payment systems. Why can a therapy be cost-effective yet still threaten insurance budgets? Explore how CAR-T is reshaping reimbursement, health economics, and the future of Cell & Gene Therapy.
CAR-T has already demonstrated that it can provide long-term remission—and even the possibility of a cure—for some patients with blood cancers who previously had few or no effective treatment options.
However, once CAR-T entered routine clinical practice, it quickly became clear that its widespread adoption was limited by more than manufacturing capacity, supply chains, or hospital infrastructure. There was another, far more practical question:
Who is going to pay for a treatment that costs hundreds of thousands of dollars?
At first glance, this may seem like a simple issue of expensive drugs. In reality, what is being challenged is the healthcare payment system itself.
Most traditional medicines share a common business model: patients continue taking the drug, and insurers continue paying over time.
For chronic diseases such as hypertension, diabetes, and autoimmune disorders, patients often require treatment for years—or even for life. Healthcare spending is therefore spread over many years or even decades. At the same time, large patient populations allow pharmaceutical companies to achieve economies of scale, reducing manufacturing costs per unit and keeping prices relatively affordable.
however, CAR-T is fundamentally different.
Because CAR-T uses a patient's own T cells, every patient requires a dedicated GMP manufacturing process. Each production run is made for just one patient—a classic One Patient, One Batch model.
ShaoChi CHENG
As a result, manufacturing costs that would normally be distributed across hundreds of thousands or even millions of doses must now be absorbed by a single patient.
In other words, the high price of CAR-T is not simply the result of pharmaceutical pricing strategy—it reflects the economics of personalized manufacturing.
The real question is therefore not simply whether CAR-T is expensive, but whether today's healthcare payment systems are designed to support therapies built on this entirely different cost structure.
Many people assume that a high-priced therapy is automatically "not cost-effective."
In health economics, however, these are two very different concepts.
A therapy can be highly cost-effective, meaning it delivers substantial health benefits relative to its cost, while still creating enormous budget impact because a large amount of money must be paid within a short period.
For example, if many eligible patients receive CAR-T in the same year, the treatment may reduce future healthcare costs over the long term. Nevertheless, payers still have to absorb hundreds of millions of dollars in reimbursement costs within a single budget cycle.
The question payers face is therefore not:
"Is this treatment worth it?"
Instead, it becomes:
"Can this year's budget support so many patients receiving treatment at the same time?"
This is why Budget Impact Analysis (BIA) has become an increasingly important component of Health Technology Assessment (HTA), alongside traditional cost-effectiveness analysis.
In 2023, Taiwan officially included CAR-T therapy under its National Health Insurance (NHI) reimbursement program, marking an important milestone for the country's cell therapy development.
Taiwan currently adopts a temporary reimbursement model followed by ongoing reassessment. Eligible patients can receive treatment while hospitals continue collecting real-world data (RWD). The National Health Insurance Administration then evaluates long-term effectiveness, safety, and real-world clinical experience to determine whether CAR-T should become part of routine reimbursement and whether reimbursement criteria should be revised.
This approach aims to balance two important objectives:
As more cell and gene therapies enter the market, Taiwan may also consider dedicated funding mechanisms or other innovative payment models to reduce pressure on the existing healthcare budget.
When a single treatment costs hundreds of thousands of dollars, the traditional "pay upon treatment" model begins to show its limitations.
Over the past decade, governments, commercial insurers, and pharmaceutical companies have increasingly adopted various Risk-sharing Agreements to balance support for medical innovation with the long-term sustainability of healthcare financing.
Common approaches include:
Although these models differ across countries, they all pursue the same objective: reducing the financial risk borne by payers while allowing effective innovative therapies to reach patients more quickly.
The reimbursement challenges facing CAR-T are remarkably similar to those encountered by many gene therapies.
Both offer potentially transformative—or even curative—clinical benefits while carrying exceptionally high upfront costs. As a result, they challenge insurance systems that were originally built around a continuous treatment, continuous payment model.
CAR-T is therefore not an exception—it represents the broader transformation taking place across the Cell & Gene Therapy (CGT) industry.
As more one-time therapies enter the market, developing payment systems that balance patient access, innovation, and financial sustainability will become one of the defining challenges for healthcare systems worldwide.
CAR-T is transforming more than cancer treatment—it is reshaping the way healthcare is paid for.
Traditionally, pharmaceutical companies sold a box of medicine, hospitals delivered a treatment, and insurers reimbursed a prescription.
In the era of cell and gene therapy, however, what payers are truly purchasing is the patient's future health outcomes over the coming years.
The commercialization of CAR-T is therefore no longer just about launching a new therapy. It represents a system-wide transformation involving manufacturing, hospital operations, healthcare reimbursement, health economics, and risk-sharing mechanisms.
As more cell therapies, gene therapies, and other one-time curative treatments become available, the key question will no longer be whether science can deliver better therapies.
Instead, success will depend on whether healthcare systems can build payment models that simultaneously improve patient access, encourage innovation, and remain financially sustainable.
In other words, the next competitive advantage will not belong only to companies that develop better therapies—it will also belong to those that build business models capable of bringing innovative treatments into routine clinical practice while sustaining them for the long term.
