Is the $850,000 price tag for a blindness-curing gene therapy a sign of future medical costs?
January 11, 2018
Source: New Atlas
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In August 2017 the FDA approved the first gene therapy for public use in the United States. Called Kymriah, the drug was targeted at a very specific form of blood and bone marrow cancer. The therapy was controversially priced at US$475,000 per treatment. A few months later the FDA approved another gene therapy, this time for a rare inherited retinal disease, the drug is called Luxturna. Spark Therapeutics, the company producing Luxturna, has just revealed the new therapy will cost $850,000.
Gene therapies are an undeniably exciting new frontier for medicine. From Kymriah's genetically modified, cancer-hunting immune cells, to Luxturna's vision-restoring healthy gene replacement, these therapies are fundamentally unlike 20th-century medicines which generally require ongoing drug treatment. Gene therapies can be one-off doses that in effect, cure a specific disease.
In a pharmaceutical industry controlled by dollars this presents a tricky problem for the companies that spend years, and millions, in developing these treatments. It isn't hard to understand why these drugs are hitting the market with sky-high prices, but it is also undeniably problematic when a life-saving medication arrives with a price-tag that is out of reach to many.
Spark Therapeutics, perhaps aware of the problematic PR that could come its way after announcing the nearly $1 million dollar price tag, also delivered a press release outlining a series of new payment models that could establish a novel precedent for how we deal with the financial reality behind these breakthroughs, one-off gene therapy treatments.
Firstly Spark suggested a rebate system based on the efficacy of the treatment. So this means the company will pay rebates to certain health insurers if the treatment is not wholly effective. These "outcome-based" rebates have not been specifically detailed but they do seem to have two thresholds, a short-term measure (30-90 days) and a long-term measure (30 months).
As well as outcome-based pricing models, Spark is working with the US Centers for Medicare and Medicaid Services (CMS) to establish multi-year payment plans to help make the cost more accessible to private-paying patients.
These new prospective models are situated inside a greater debate that is currently occurring as more of these breakthrough gene therapies become real. Stuart Orkin is chairman of pediatric oncology at Dana-Farber Cancer Institute and co-author of a study published in 2016 on this very topic. Orkin is pragmatic about the economic reality faced by the pharmaceutical industry and suggests these challenges need to be promptly discussed.
"It takes a long time to develop new genetic therapies, and it's a huge investment," explains Orkin. "Once the FDA approves these therapies, they're going to have to be paid for. The sustainability of the whole industry depends on some kind of compensation in which companies realize a profit."
Realistically it is easy to justify a one-off, million dollar price tag for a curative treatment when otherwise managing that same chronic illness would cost hundreds of thousands of dollars a year. Hemophilia treatments for example can currently cost up to $300,000 per year, for the lifespan of a patient, so a single dose of a cure priced at $1 million dollars doesn't seem entirely unreasonable.
Of course it also doesn't seem unreasonable to imagine a future where life-saving medical innovations are only available to the super-rich. With the burgeoning field of gene therapy finally taking hold of medicine, this is something that certainly needs to be managed.
Steve Miller, CEO of Express Scripts, is partnering with Spark Therapeutics to help make Luxturna more accessible to insurers and individuals. Miller suggests many more innovations could be on the way to work out how we, as a society, will pay for these new and expensive treatments. Speaking to CNBC Miller openly says, "We've got to figure this out, because — let's be frank — there are going to be more of these drugs coming to the marketplace for even bigger populations."
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