The era of multimillion-dollar gene therapies has arrived, offering patients with debilitating diseases a glimmer of hope — but also posing major affordability challenges.
Why it matters: While the expected number of patients likely to receive the treatments is relatively small, it’s unclear how small employers, state Medicaid programs, and the rest of the health care system will suddenly bear such high costs.
Driving the news: The FDA recently approved two gene therapies, doubling the number on the market for diseases other than cancer.
- Bluebird bio’s Zynteglo is for a blood disorder called beta thalassemia, which is usually treated with regular transfusions in the most severe cases. Marketed as a one-time, custom-designed injection targeting the underlying genetic causes of the condition, Zynteglo costs $2.8 million.
- Zynteglo was the most expensive drug on the market for a few weeks, until the FDA approved Bluebird’s Skysona for a rare neurological disorder called cerebral adrenoleukodystrophy. Skysona had a list price of $3 million.
- Bluebird estimates that there are 1,300-1,500 people in the US who are eligible for Zynteglo. CVS estimates there are only 700 potential US candidates for Skysona.
Where it says: The two previously approved non-oncology gene therapies entered the market with prices of US$850,000 and US$2.1 million, respectively.
- CAR-Ts, or gene therapies, to treat cancer come with their own affordability issues.
- The average gene therapy will likely cost at least $1.5 million, said Colin Young, director of pipeline research for drug development at Tufts Medical Center’s NEWDIGS initiative.
- Including oncology drugs, gene therapies could end up costing the US about $30 billion a year, Young said. Total spending on prescription drugs in the United States was $348.4 billion in 2020, according to CMS.
- “At the macro level, it’s not a big problem,” Young said. “It’s still quite a problem at the micro scale because if you’re a self-insured company and someone suddenly needs $3 million in gene therapy, it could wipe out the money you have for the rest of your employees.”
The big picture: Though only a handful have been approved, the drug development pipeline is full of gene therapies, and the FDA estimates it could approve between 10 and 20 annually by 2025.
- Even experts and groups who are generally critical of high drug prices say the costs could be justified if they provide a lifelong cure that saves the healthcare system big bucks in the long run.
- When the modern healthcare system emerged, “there was no expectation then of a potentially permanent, potentially curable class of therapeutics like gene therapies,” said David Barrett, CEO of the American Society of Gene and Cell Therapy.
- “This creates some problems when attempting to integrate a transformative class of therapeutics into a system designed to address an almost more transactional approach to prescription drugs, where benefit is tied to the delivery of therapy.”
What you say: “As much as these are challenges in terms of payment…unlike other drugs, you can understand the costs a little better here,” said Sergio Santiviago, vice president of drug policy at America’s Health Insurance Plans, which is a common criticism of drug pricing
Between the lines: Payers and pharmaceutical companies are both open to non-traditional payment models to cover risk when treatments don’t work.
- Bluebird is offering to reimburse up to 80% of Zynteglo’s cost for two years if patients continue to require blood transfusions, per BioPharma Dive. Another popular idea is to pay for the therapies over a longer period of time, like a mortgage.
- But “our healthcare system is highly fragmented, and that means people buy and unbuy insurance and have different types of insurance at different times in their lives,” said Rachel Sachs, a law professor at Washington University.
- She noted that payers may not have an incentive to provide access to therapy that requires a one-time referral but provides benefits over years or a lifetime “because they are not the ones to benefit.”
There are other legal and practical ones barriers which vary depending on the insurance market.
- State Medicaid programs probably need to be careful about which patients they consider eligible for the drugs, Santiviago said, because “if some states have a concentration of these people, it could wreck their budget within a year.”
The Intrigue: Because gene therapies are so new, the world is only in the early stages of collecting data on their durability.
- If their effectiveness diminishes or disappears over time, then they are not as valuable and the high price is not as justified.
- And not all gene therapies are created equal. Some use technology that is more likely to permanently cure a patient than others, Young said.
- Shelf life issues can present regulatory challenges for the FDA, and it has in the past urged manufacturers to collect more data before the agency approves a product.
What we observe: The gene therapies approved so far are intended for very small patient populations. But two treatments for sickle cell disease could hit the market as early as next year.
- According to CVS, there are an estimated 58,000 potential patient candidates in the United States. A large proportion of these are covered by Medicaid, as the disease often keeps people from working.
- A study published in last year JAMA Pediatrics found that if $1.85 million in sickle cell gene therapy was administered annually to just 7% of eligible patients, the average annual budget impact per state Medicaid program included in the study included, would be nearly $30 million.
The bottom line: The question of how to deal with an influx of gene therapy has evolved from abstract to imminent.
- “There are 2,000 gene therapies in the pipeline for the foreseeable future, and it has the potential to transform the way we treat disease,” Barrett said.
- “To me, it would be unacceptable that scientists, physicians and patients who volunteer to participate in these clinical trials should have their efforts wasted if payers and policy makers could not find a way to cover and adequately reimburse these transformative treatments. “