Gene Therapy Was Hailed as a Revolution – Then Came the Bill
bloomberg.com
bloomberg.com
They kind of gloss over it when talking about Zolgensma, but the current treatment, Spinraza, costs ~$750K in the first year and $375K every year after. So even by year 2, you've already spent one million and you pay that indefinitely.
So if Zolgensma shows 5 years of efficacy and Zolgensma costs $2M, it's already 10% cheaper than current costs.
Yes of course, paying it in a lump sum is challenging, but these companies are all exploring alternative payment methods; either paying installments ($500K per year for 4 years) or performance based models (you pay me $500K, every year, until the drug stops working).
Gene therapy will certainly require a new payment plan, but it's not something the system can't handle.
That being said, obviously we have to fund development somehow.
I suppose a trade secret would prevent circumventing IP law by heading to a more permissive jurisdiction and is potentially indefinite. But then again, if anyone ever successfully reverse engineered it (or it leaked) my understanding is you can't patent it in retrospect? So it seems like a huge risk to me.
From an ethical standpoint, I'm not seeing where it would be any worse than a patent (one that's actually enforced). Unless you're concerned about the possibility of the knowledge becoming lost to humanity? Or something else?
An aside: I wouldn't be optimistic about the usefulness of trade secrets on their own in the biomedical sciences. It can certainly be tedious to reverse engineer something, but my impression is that it's generally the IP laws that stop your potential competition.
Let's say we have a disease that kills 1000 people per year. Let's look at a 40 year period.
1. No cure is researched or found in 40 years. Total death count: 40,000.
2. For the first 10 years no cure is found. After 10 years a company comes along and creates a lifesaving cure, however it's expensive - only 500 people per year can afford it. The patent on it lasts 20 years. After 20 years another company creates a generic version of it that 990 people can afford. In the first 10 years 10,000 people die, in the following 20 years another 10,000 people die, in the last 10 years 100 people die. Total death count: 20,100.
3. No cure is found in the first 20 years, then a government funded research team finds a cure. A company picks it up and creates a generic, where 99% people can afford it. In the first 20 years 20,000 people die. In the latter 20 years 200 people die. Total death count: 20,200.
Being early matters in medicine. It's always easy to look at an expensive treatment and say that this should be much cheaper, but we usually don't consider that forcing investors out of healthcare means that less research will be done. This means fewer treatments and a longer time before a treatment is found.
4. Nobody makes any attempt to create a treatment, but after only six months a miracle occurs. Nobody dies and everybody is cured for no reason.
Not saying that there isn't any, but where is the evidence that a government funded research team would be slower than the privately funded one?
If the government invests $100 billion into medical research and private companies invest another $100 billion then we're probably getting more medical research done than if only the government invested $100 billion into medical research, and the private companies spent the $100 billion on making movies.
You might even argue that the money saved by not having a patent could be used to save even more lives.
There is only one detail I cannot understand. Why competition doesn't work? Why some new investors (who are not invested in drugs yet) do not invest in the research of new drug that heals all the diseases, to sell this drug for $1 -- they would destroy existing system, but they would get all the market at once. (Or in a smaller scale they might make a drug that treats some disease once and for all, and shrink not the pie overall, but some part of it).
This sounds great. We'd like to imagine that the companies would now expend all their energy towards developing new treatments, even ones that might not have been economically feasible before (think: the 'problem' of cure vs treat), and everybody would live happily ever after. Unfortunately, there's another way of looking at this. You just changed the company's goal away from market success and onto playing a game of min-maxing on government funding.
We have countless analogs to draw from here. Anytime a complex industry starts getting involved with government funding suddenly the entire game changes. It's not about producing anything, but instead about doing exactly what's necessary to keep, and maximize, the amount of funding received. And sure we'd like to imagine you could just create a million rules and regulations to try to ensure that this means exactly 'producing new amazing treatments' but actually doing that is not really practical. And, that's also ignoring the fact that these systems also rapidly lend themselves towards corruption:
'Well I tell you what Senator Pharmaceutical Commission Chair, we've been looking at building a new pharmaceutical research facility. And [your state] is looking right top notch. And you know what, voters will love those jobs we'll bring, and it'll even be a tax windfall in the longrun. The only thing that's stopping us from this is resources. Just something to keep in mind when you go draw up that next fiscal allotment. And ya know, you also might want to consider retirement. Once you leave office - we'd be mighty grateful for some of those great insights you have. We're always looking for consultants with the right sort of experience, if you know what I mean.'
It sucks. I'm with some others who say that we should try to improve our society so that nobody would have to make such a choice.
Clinics aren't subject to the same requirement and can legally turn indigent patients away.
The ethical thing to do is constructing a system that maximizes the amount of lifesaving medical care at minimum cost. Doing that requires acknowledging market forces. Scientists and engineers aren't any more altruistic than anyone else. These days the incoming classes at investment banks are full of physics, biology, and chemistry majors that could easily have gotten a PhD and went to go work for NIH. In the healthcare space, there is at least the potential for making a lot of money by doing a startup with the hopes of getting acquired by one of the big pharma companies. If you take that option away--if developing lifesaving medical care is a field that nets you at best a GS-scale government job--talent and capital are going to go develop dating apps instead.
Moreover a lot techniques for gene therapy are already in the literature. Moreover you have to document what it's doing or what your doing for approval (in-case of a procedure).
https://www.theguardian.com/science/2017/dec/24/josiah-zayne...
There is a big difference between injecting reagents into a single human, and doing actual medicine.
That's a bit of an understatement. The difference between doing CRISPR on a cell and a petri dish and doing it in a human is huge. That's why no one has done it yet.
And although gene therapy might be a fundamental technique, creating a gene therapy for a different disease is really hard because human biology is really hard.
Come to think of it, the general idea is "If you, as an insurance company, foot the bill for these treatments with long-term benefits for your clients, this will cost $X, but save you $Y and other nearby insurance companies $Z in the future. Therefore, we the association will pay you $z < $Z to do it, and by assumption $Y+$Z > $X, so there should exist values of $z that make this profitable for both parties (anything between $X-$Y and $Z)." The carrot is the payment of $z.
In terms of whether this association could become a price-fixing cartel... It's probably easier to verify compliance when compliance consists of performing a positive behavior (i.e. paying healthcare providers to do certain treatments; whatever the details of the payment, the important thing is whether the treatment was performed) instead of a negative behavior (i.e. not selling extra product at a lower price on the side). It doesn't seem obvious that this would make price-fixing much easier than it currently is.
Theoretically, it would be possible for states to do this responsibly in a manner that benefited everyone, but if I weigh the extent to which our system allows interested parties to pay for legislation against the extent to which the public is likely to make reinsurance rates a ballot issue, I can't help but put the probability of a responsible implementation at about 1-2% and the probability of "privatize the gains and socialize the losses" at 98-99%.
There's a good chance that NICE won't be willing to fund these treatments at all. Which is in no way a criticism of them (QALY is the just the most sensible semi-objective thing to base these decisions on) - but is worth highlighting when you say "free healthcare for all".
It's only free for the healthcare considered to be good enough value for money.
That's a hard thing to admit, so people look for a way around it. But at the end of the day somebody has to pay. If you tell the drug companies that the products are too expensive, and ask them to accept lower returns than comparable high-tech, high-risk, talent and capital-intensive industries, you're asking those companies and their shareholders to pay. (Or you're asking them to cross-subsidize those treatments with money from treatments that have a much larger number of patients.) People love that idea because it makes it seem like you're getting cheaper treatments for "free" but all you're doing is hiding the costs. There is a cost, it's now just hidden and unaccounted for. If you told Apple they could only charge $250 for an iPhone, what do you think would happen?
Let the drug companies charge what they want to charge, and let government-funded healthcare programs decide what they're willing to pay to save a particular life. That's the most transparent and ethical thing to do.
Other studies suggest CAR-T drugs are cost-effective at current prices, but they are not widely covered by payers. In these cases, it is less clear whether drug companies or payers are to blame for access to treatment
The article also does not mention what the gene therapy in question actually does. In small studies, it has essentially cured a disease that would otherwise kill babies before they are two. It's a pretty amazing product. And there are many companies hot on their heels, some of which are developing small molecule drugs -- much cheaper to develop and manufacture than gene therapy -- that actually seem to be potentially nearly as effective
The detailed ICER review is a good read if you're looking to understand how drugs are valued: https://icer-review.org/wp-content/uploads/2018/07/ICER_SMA_...
If we assume that these things must be produced within a market system, it seems like the real moral question isn't what the dollar amount is, (since it logically follows that the cost to produce it must increase with the total revenue it's going to produce) but it would seem troublesome to say that we only produce treatments that have %20 profit because our shareholders expect blah blah, etc. etc.
If they already have the treatment and don't want to sell it because they can't price it profitably enough that seems pretty wrong to me. Not sure what the solution is though. I see how all the incentives could be aligned this way. And the article seems to hint that this is already the case.
It seems clear to me that costs and profits need to come from somewhere. But I wonder if there is a better system than just making each pill super expensive for a long period of time.
To the article's point, there is currently a dynamic where long term/chronic prescriptions such as anti-depression drugs "win out" relative to antibiotics & vaccines, which have the same pricing issue. It's mitigated by the large out-of-patent portfolio and (especially for vaccines) the large potential volume, but the problem is there.
To some extent, this is a problem economist don't like. The pricing system shouldn't matter too much. If X has Y value and A cost, those (alongside competition, which should be driving price to A)... If the value/efficacy is identical, those are supposed to be the main determinates of price.
Non-academic pricers understand that these pricing paradigms are big determinates though, in practice. Membership vs pay-as-you-go. Software & updates vs SAAS. These change demand & pricing dynamics enormously.
A one-time pill, with measured effectiveness against depression on par with one-a-day alternatives is very unlikely to make as much money, in practice... blackboard reasoning be damned.
Hard to even break even if you're charging $100 and treating 2000 patients.
The hard part is interpreting which part of the sequence is causing the problem, and developing targeted therapies to treat it. Sequencing any patient's genome has already been totally feasible for a few years now, but we still don't understand how to make the information actionable once we have it.
It wouldn't affect much the cost of producing therapies that are tailored to individual genomes.