What is the price of saving a life?
How much is it worth to a person to avoid monthly blood transfusions for decades? How much is it worth to partially restore someone’s eyesight? When it comes to health care, who should pay?
These are the scale of questions that the health care industry is grappling with as it confronts gene therapy, a revolutionary field that comes with a blockbuster price tag.
Insurers, hospitals, drug companies and patients must figure out how to price and pay for therapies that cost hundreds of thousands of dollars — and in the future, potentially millions of dollars — to treat one person.
“My true north is always, if you or a member of your family were a patient, would you want them to have the treatment?” said Michael Sherman, senior vice president and chief medical officer at Harvard Pilgrim Health Care, an insurer based in Wellesley.
Gene therapy is a cutting-edge technology in which a new gene can be introduced into someone’s body to cure a disease.
Only three therapies have received approval from the U.S. Food and Drug Administration for use in the United States, and only a small number of patients are eligible to benefit. But a fourth therapy is expected to be approved this year, and more are in the pipeline. The pharmaceutical trade association PhRMA identified 289 gene and cell therapies in clinical trials or awaiting FDA approval, although some may never make it to market and others may take years.
The problem becomes their price.
The first two gene therapies approved in the U.S., which treat types of cancer, are Kymriah and Yescarta. Yescarta’s list price is $373,000. Kymriah’s list price is either $373,000 or $475,000, depending on the type of cancer. That does not include the cost of the hospitalization and medications for side effects, which could push the cost of treatment to $1 million, insurance officials say.
The third therapy, Luxturna, which treats a retinal disorder, costs $850,000 for both eyes.
A gene replacement therapy for spinal muscular atrophy called AVXS-101 could get FDA approval this year. While Novartis, which owns the therapy, has not yet set a price, experts expect it could cost close to $2 million. Spinal muscular atrophy can cause early death or lifelong disability.
“No one really knows what the future gene therapies are going to cost, but my expectation is you’re going to see a lot of them clustered in the high $1.5 to $2.5 million (range),” Sherman said.
Drug companies defend the high prices as justified, based on the cost of developing these drugs and their value. A one-time treatment with gene therapy could potentially cure a disease that would otherwise cause death or disability that would require regular treatment.
Novartis reviewed a number of factors in setting the price for Kymriah. In an email, Eric Althoff, Novartis global head of media relations, said the process involved looking at “… the medical and clinical value, the value to patients, the healthcare system and society, both in the near-term and long-term.”
Mike Ybarra, vice president of medical affairs and strategic alliances at PhRMA, said a one-time cure for a disease like hemophilia, for example, could eliminate the need for a lifetime of additional tests, medication and treatment.
Manny Johnson, the first patient to undergo a clinical trial for a type of gene therapy to treat sickle cell disease, underwent monthly blood transfusions for years until he received the therapy.
“The key thing to keep in mind is what are we currently spending,” Ybarra said. “What’s the cost of a one-time therapy versus the cost of continuity of care?”
But not all experts agree with the drug companies on what an appropriate price is. The Institute for Clinical and Economic Review provides independent assessments of the value of particular drugs. ICER concluded that in order for Luxturna to be cost-effective for a 15-year-old patient, it should be priced between $153,000 and $217,000.
So far, the impact of gene therapy is limited. Kymriah and Yescarta are recommended only for cancer patients who have not responded to traditional treatments. Luxturna treats a narrow type of eye disorder, which affects 1,000 to 2,000 people in the U.S.
Blue Cross Blue Shield Massachusetts, the state’s largest insurer, covered one patient for Luxturna in 2018. It anticipates getting zero to two patients a year. The insurer anticipated having between 30 and 50 patients use Kymriah or Yescarta, but only received around 15 claims in 2018. (Some of this could be because the technology is so new, only a small number of providers offer it.)
Many of the therapies being developed are for rare diseases. But there is also, for example, research being done on gene therapies to treat hemophilia — which could have much wider applications.
“It would be game changing to treat hemophilia,” said Katherine Dallow, vice president of clinical programs for Blue Cross Blue Shield Massachusetts. “But at the prices it’s being manufactured at, it will be a bank breaking effort societally.”
Blue Cross Blue Shield officials say they decide whether to cover treatment based on whether it improves patient outcomes. So far, the insurer covers all three gene therapies on the market, and it anticipates covering AVXS-101.
But, Dallow said, “The issue around affordability is the million dollar question, and it’s becoming the billion dollar question.”
Insurers point out that the long-term effectiveness of these treatments has not yet been tested. It is also potentially problematic if a patient switches insurance, leaving one insurer to have paid for the treatment while another reaps the benefits.
“We need some sort of framework for thinking about what is a fair price and how do we solve the budget impact problem,” Sherman said. “We don’t have an unlimited amount of money to spend on health care. At some point, the budget impact is important.”
One method being discussed is “value-based payments.” These are agreements, which can be structured in different ways, where the drug company only gets a portion of its payment if certain clinical milestones are not met.
For example, Harvard Pilgrim reached an agreement with the maker of Luxturna where the drug company rebates money to the insurer if certain outcomes are not achieved by 90 days and by 2.5 years.
Novartis is offering a value-based agreement to treatment centers that use Kymriah on pediatric leukemia patients, in which Novartis only charges for the drug if the patient responds within a month. If the patient does not respond, the drug is free.
However, there are regulatory barriers to these types of arrangements.
Thomas Barker, a health care attorney at Foley Hoag, said federal rules require drug companies to sell their drugs to Medicaid at the lowest price available. Drug companies are reluctant to enter into arrangements that would lower the Medicaid price — for example, by requiring only a small percentage of the payment up front.
Barker said companies involved in gene therapy are trying to convince Medicaid officials to allow value-based payments. But, he said, “I don’t think the political officials at (the Centers for Medicare and Medicaid Services) at the moment have the wherewithal or the ability or desire to enter into those type of arrangements right now.”
The high cost of gene therapy also has implications for public health insurance programs, which are paid for by taxpayers.
Massachusetts became one of the first states to address the issue through its Medicaid program when it received federal approval to create a list of “carve-out” drugs, including Kymriah and Yescarta, beginning in March 2018.
Typically, MassHealth reimburses hospitals a certain amount for each inpatient stay. But because of how rare, new and expensive gene therapies are, these payments would not cover the hospital’s costs, and could throw off future calculations of the rates. So instead, MassHealth pays the hospital separately for the cost of these drugs.
MassHealth has so far approved five of seven requests it has gotten to cover these drugs.
Sherman said as more high-cost therapies come on the market, taxpayers will have to pay more to cover Medicaid costs. Employers and employees will have to pay more to cover the costs of commercial insurance.
“Ultimately, this is going to be a problem for all of us,” he said.
- COVID Is Killing State-Level Efforts to Make Health Care a Right
- Americans can celebrate victory in the right to know health care costs
- Non-judicious use of therapies for Covid-19 leads to virus mutations: ICMR chief
- 'Did the stress of lockdown trigger my stroke?' DR MARTIN SCURR answers your health questions
- Health Ministry names Covid-19 fight success as most outstanding event in 2020
- Biotechnology e-Symposium in Delhi: Impacts on human health in 21st Century
- COVID-19 doesn't care about New York or New Delhi
- Delays over pricing holds back India’s vaccine rollout
- Campaign to recall city leaders over Westminster’s water price hikes heads to court
- Covid retail therapy! London's Regent Street is rammed as shoppers flood back to high streets on first weekend after lockdown was eased in '£1.5bn lifeline' for struggling stores
Gene therapy: Revolutionary health care with a blockbuster price tag have 1491 words, post on www.masslive.com at January 27, 2019. This is cached page on Europe Breaking News. If you want remove this page, please contact us.