Life-saving gene therapies are within patients’ grasp, but for most, financially out of reach, creating a quandary for insurers and healthcare executives.
This summer the US Food and Drug Administration approved the first gene therapy treatment, Kymriah, made by Novartis. It is highly effective for a rare form of leukaemia. It also exemplifies a major obstacle in commercialising gene therapies: It costs $475,000. Hundreds of these types of treatments, which work by modifying cellular DNA, are in various stages of clinical trials and testing. But as with Kymriah, their costs are expected to be sky-high – between $700,000 and $900,000 in the case of a drug for preventing blindness from a rare genetic disease, for example. The situation has raised the concerns of many, including not only patients and their families, but researchers, insurers, healthcare executives and economists.
Pharmaceutical executives contend that it is fair for the price of a treatment to be commensurate with its value to the patient. There are other factors in the equation as well. First, these therapies target extremely rare diseases; thus the market for them is miniscule, offering few opportunities for companies to recoup their investment, make a profit, and fund future research. In addition, most should be needed only once. “The reason why it’s a peculiar situation is not only because a lot of these gene therapy products are targeting small populations,” said Matt Kapusta, Chief Executive of UniQure. “It is a one-time administration with potentially curative impact for the patient.”
Several pharmaceutical companies have formed a consortium with academics to look into ways to enable insurers to pay for these treatments. “We recognize that most payers in the US are not currently set up to support one-time therapies that generate long-term transformative benefits,” said Elizabeth Pingpank, a spokeswoman for Bluebird Bio, which develops gene therapies.
Healthcare executives are scrambling to develop new payment models, and are willing to work with concerned parties. As the New York Times reports, “When Kymriah was approved, officials at Novartis said they would take the unusual step of taking into account how well it worked in a particular patient.” For example, the company said it is working with federal government agencies on an approach for children and young adults in which there would be no charge if the patient does not respond to treatment within a month. Prices could also vary based on their effectiveness.
Drug makers often cite the need to fund research and development as a primary price rationale, but some dispute this claim. Dr Peter B. Bach, Director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York argues that development costs are mitigated by economic incentives for orphan drugs, which treat rare medical conditions, including a 50 percent tax credit on R&D costs, among others.
Researchers also assert that opportunities for profits are not limited to the one-time treatment, and that certain aspects of gene therapy development contribute to lower development costs. According to Dr James Wilson, Director of the Gene Therapy Program at the University of Pennsylvania, once a company develops a delivery system, such as a modified virus, that system can be used repeatedly to create many other treatments. Wilson also pointed out that clinical trials for gene therapies are very small, which should also bring down development costs.
