Costs and Coverage Challenges of CAR-T Therapies

Chimeric Antigen Receptor T-cell (CAR-T) therapy is one of the most groundbreaking innovations in cancer treatment.

Designed to reprogram a patient’s own immune cells to attack cancer, CAR-T has delivered remarkable outcomes for patients with certain blood cancers. However, this promise comes at a steep price, financially and operationally, which is increasingly relevant for employers managing health benefits.

Overview of CAR-T Therapies

CAR-T therapy is a type of cell and gene therapy (CGT), which is a growing field of specialty medications. CAR-T therapy is an advanced cancer treatment that uses a patient’s own immune cells to fight tumors. T cells are collected from the patient, genetically modified in a lab to express a receptor that targets cancer cells, and then infused back into the body. CAR-T therapy involves the participant donating their own blood cells, followed by a three- to six-week waiting period while the CAR-T cells are prepared. The treatment is then administered via an IV. These engineered T cells can recognize and destroy cancer cells more effectively. CAR-T therapy is primarily used to treat certain blood cancers, including leukemia and lymphoma. It’s considered a breakthrough in immunotherapy because it harnesses the body’s immune system for highly tailored treatment. Due to the personalized nature of this treatment, CAR-T therapies are associated with a substantial price tag.

The Cost of CAR-T Therapies

CAR-T therapy is among the most expensive treatments available today. According to the American Cancer Society, the average cost of CAR T cells alone can range from $300,000 to $475,000 due to the complexity of how the cells are collected and manufactured. This doesn’t include the costs of hospital admission, tests, procedures and other expenses, which can drive up the total spend.

The drug acquisition cost alone can be up to $475,000, and when hospitalization, toxicity management and follow-up care are included, total costs often exceed $1 million per patient. These figures significantly exceed typical specialty drug expenses, resulting in concentrated, high-cost claims that can substantially impact employer-sponsored health plans. Consequently, payment models for CAR-T are complex and evolving. These include outcomes-based contracts, installment plans and employer-sponsored access programs. These models are gaining traction as the market works to make CGTs more financially sustainable. New payment models could make it easier to offer CGTs without massive upfront costs.

For smaller employers, the odds of a plan participant using CAR-T remain low. However, even a single claim can significantly impact the overall spending of group health insurance.

For self-funded employers, a single CAR-T case can disrupt annual health budgets. Over time, even fully insured plans may experience ripple effects in premium increases as carriers adjust for the high costs of these therapies.

While Medicare and many group and private insurance plans do cover some of the costs of CAR-T therapy, they usually don’t cover the full amount. The amount of coverage varies between plans and the state of residence.

CAR-T Market Trends

The CAR-T market is expanding at an extraordinary pace. According to the market research firm Astute Analytica, the global CAR-T therapy market is projected to grow from $2.7 billion in 2025 to over $27.5 billion by 2033, reflecting a robust compound annual growth rate of 26.2%. The surge in demand is fueled by the success of CAR-T products, such as Yescarta and Kymriah, approved by the U.S. Food and Drug Administration. As of November 2025, there are seven approved CAR-T therapies, and more are likely to be approved in 2026 and beyond. The U.S. market may also be driven by new indications, earlier-line use and next-generation “off-the-shelf” CAR-T products that promise faster treatment and potentially lower costs.

For employers, this means CAR-T will not remain a niche therapy. As approvals expand beyond hematologic cancers into solid tumors, utilization and associated costs are expected to rise.

Employer Considerations

CAR-T therapy introduces a unique set of challenges—financial, operational and logistical—for employer-sponsored health plans. Understanding these issues is crucial for designing effective and sustainable benefits strategies. Here are some key considerations for employers:

• High-cost claims—Total treatment costs often exceed $1 million per patient, creating catastrophic claims that can destabilize annual budgets. To accommodate the growing demand for CAR-T and other high-cost specialty treatments, employers are reviewing stop-loss coverage and thresholds or carve-outs for gene and cell therapies.
• Coverage complexity and administrative burden—Strict prior authorization requirements and limited certified treatment centers add logistical challenges. Travel and lodging for employees are typically not covered under standard medical benefits. Employers may need to implement centers of excellence programs or partner with vendors offering concierge services to manage access and nonmedical costs.
• Employee financial exposure and experience—Even with coverage, employees face significant out-of-pocket costs for deductibles, coinsurance and noncovered expenses like travel, lodging and caregiver support. Employers can consider offering travel stipends, expanded employee assistance program services and financial counseling to combat stress and absenteeism.
• Market growth—The CAR-T market is projected to grow over the next decade, with expansion into solid tumors increasing utilization. Employers must anticipate an increase in claim frequency and explore alternative payment models, such as outcomes-based contracts or bundled pricing. While specialty treatments such as CAR-T are currently rare, the general category of CGT is growing rapidly and may become unavoidable to address in the future.
• Vendor and contracting strategy—Traditional fee-for-service models are ill-suited for therapies with unpredictable costs and variable outcomes. Employers may turn to partnerships with pharmacy benefit managers, specialty networks and third-party administrators that offer risk-sharing arrangements and predictable pricing structures.

Conclusion

CAR-T therapies represent both a medical breakthrough and a financial challenge. Employers who proactively address coverage, cost management and vendor partnerships will be better positioned to support employees while maintaining sustainable health benefit programs.

Contact us for more information about CGTs.