Medical

Is the $850,000 price tag for a blindness-curing gene therapy a sign of future medical costs?

Is the $850,000 price tag for ...
Each single dose of Luxturna, a gene therapy treating an inherited vision disorder, is set to cost $425,000
Each single dose of Luxturna, a gene therapy treating an inherited vision disorder, is set to cost $425,000
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Each single dose of Luxturna, a gene therapy treating an inherited vision disorder, is set to cost $425,000
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Each single dose of Luxturna, a gene therapy treating an inherited vision disorder, is set to cost $425,000

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 breakthrough, 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."

Source: Spark Therapeutics

12 comments
michael_dowling
Maybe it's time to think about establishing a government funded new drug development organization. Otherwise,these new treatments will only be available to the 1%ers. I doubt my insurance would cover me for an $850,000 treatment.
MarylandUSA
The same treatment will likely cost under $200,000 in Canada and even less than that in far-flung countries. We need a way to help Americans get treated there without having the drugmaker or the FDA cry "Foul!"
Wolf0579
There are too many people, and the 1%er's know it. With all of the medical breakthroughs happening now and in the future, a way must be found to keep the lower classes from overpopulationg the planet. Restricting medical care by keeping the price high is one way of keeping the numbers of the poor to manageable levels.
antiguajohn98
pharmaceutical companies spend three to five times as much on Advertising than they do on Research.
Jonas Salk who developed the first polio vaccine was told he could become extremely rich if you painted it the vaccine, he replied that he did not do this to become rich but to help Humanity, he found the concept of getting rich off people's misery disgusting.
Unfortunately today many people have been convinced did making money and getting rich is more important than helping our fellow humans they should be ashamed.
Also much of the basic research in medical science is done by taxpayers sponsored government Laboratories and universities then once it hits a certain stage is sold off a very little money to private companies
Scientia Non Domus, (Knowledge has No Home)
antiguajohn
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MarylandUSA
I didn't believe you, antiguajohn98 ("pharmaceutical companies spend three to five times as much on Advertising than they do on Research."). But you were right: https://www.washingtonpost.com/news/wonk/wp/2015/02/11/big-pharmaceutical-companies-are-spending-far-more-on-marketing-than-research/?utm_term=.18066f9a7107
matt43
"hey look, we cured a blind man!" - Company X "Yeah, but it cost a million dollars, what a rip off!" - Liberals
Seriously people, if it does what it claims, why are you complaining? Do you think people who own stock in these companies thought "you know what, I'll invest my life savings and retirement account into a company that will give away their product for FREE"?
They risk money to make money. They do good for people (curing blindness, seriously?) so they can make their profit margins for their investors (read: granny and her 401k) and people complain that it's expensive?!?!
piperTom
While the example of Jonas Salk is uplifting, it is not economically sustainable. The more so, since he could not have done it under today's regulatory scheme. He simply did have the billion dollars that our "modern" FDA requires for testing a new treatment.
We are invited to "imagine a future where life-saving medical innovations are only available to the super-rich." Yeah, about that... in unregulated technology, something two years old is OLD. Something 5 years old is, not only old, it is also CHEAP. So there: the regulatory scheme and the patent system are the cause of expensive and restrictive technology. If you want the technology of medicine to follow the type of path that other technology does -- change the laws!
physics314
Thank you FDA for keeping medical monopolies safe and profitable?
FabianLamaestra
Great, I can see again, but now I am in dept prison for the next 40 years. F-that.
Bob Stuart
We need to get corporations out of the health business and replace them with co-ops. The treatment I want has been withheld for years to maximize profit.