Gene therapy tackles disease at its genetic cause by replacing malfunctioning genes. This is no easy feat, requiring the development of technologies that can slip past well-honed cellular defenses without disrupting the normal activities of the cell. Nonetheless, improvements in viruses created for this purpose, manufacturing, and complementary technologies along with greater understanding of disease-causing genetic mutations have led to some remarkable successes in the clinic. Now, approximately 2,000 clinical trials have been completed or are underway, with evidence that dramatic cures may be possible for a variety of diseases with a single dose[1].
Is it finally time for gene therapy to come on down! to Contestant’s Row? As a result of the clinical successes, a number of observers in the world of healthcare have declared a definitive comeback for the entire field of gene therapy in the last several years[2][3][4]. The number of pipeline candidates suggests that, ready or not, at least one gene therapy is expected to be approved in the US in the next several years.
While patients may be, our healthcare system in many respects is not ready for gene therapy. One of the aspects in which this is apparent relates to pricing. Many in the investment world easily foresee prices in the $1-2 million range. Despite the potential for curative therapies for otherwise devastating diseases such as spinal muscular atrophy, hemophilia, degenerative eye diseases, and other rare immune and inherited metabolic disorders, this may be a challenging price tag for the US system to handle.
Making the conversation more sensitive has been the increasing congressional alarm at industry pricing practices, highlighted by a series of hearings. Concern was evident in the recent EpiPen-demonium, but there are many other instances in the recent past. Valeant Pharmaceuticals and Gilead Sciences executives have both been on the congressional firing line for their pricing practices. In the latter case, Gilead had set its price for Sovaldi, a treatment for hepatitis C, at $84,000. Given that there are millions of people with hepatitis C, this suggested, and became, tens of billions in additional drug spending for payers. With this environmental backdrop it is easy to envision that when several drugs with price tags in the millions start to appear in the marketplace aimed at mortally ill patients with no alternatives, the question of drug pricing ethics will rise again.
While at first blush this type of pricing can be hard to stomach, multiple cost effectiveness studies using mathematical models that have long been employed by health systems in Europe have shown therapies such as Sovaldi to be cost effective given the outright cure it provides in almost all cases. Likewise, for many diseases targeted by gene therapy, there is evidence to show that in absence of potentially curative therapies, the healthcare system may already pay $3-400,000 per year, per patient. Assuming these therapies are truly curative, it would take only a few years for these to hit a breakeven point, before bringing overall savings in the longer term.
The high price tag coupled with the one time dosage make it difficult to keep perspective on the long term benefits to the healthcare system. But there are ways that the US system could make the cost more palatable. For instance, payments could be made over time, corresponding to a demonstration that these therapies are actually working – by way of cancers in remission or protein levels, among others. In this manner, it would not be expected that the $2 million dollar check would get written all at once. Instead, among the proposed models for paying for gene therapies is an annuity structure, where a fixed amount is paid incrementally over time, should the therapy demonstrate that it continues to work.
This potential, sensible approach is harder to employ in the US which has a multi-payer system. In European countries, the government is primarily the sole payer, making the long-term logistics of an annuity system more feasible – one payer is responsible for writing those annuity checks over time. In the US, a typical rule of thumb among the payer world is for a particular patient to be covered by a particular payer for only 3-5 years. Why should Payer B continue writing checks for a therapy Payer A first signed-off on? Further, long term outcomes and effects for these therapies are still unknown – if any one of these therapies look more or less effective at 10, 20 and 30 years on – should Payers B, C, D, etc. continue to pay the same fixed amount, or should more or less be paid depending on the magnitude and durability of the therapy, good or bad?
Others purport that sponsors should have some skin in the game and contribute to a risk-sharing agreement, where they will be responsible to foot some of the costs in the event of suboptimal responses. Ultimately the goal is to find a payment structure that will both incentivize sponsors to continue drug development in this space and for investors to continue supporting those sponsors. If not for the aforementioned expectation of gene therapy pricing in the $1-2 million range, investors would be more reticent to maintain, if not ramp up the level of investment in the space, given the multitude of developmental and regulatory uncertainties these therapies still face. Should we fail as a healthcare system to adequately prepare the necessary policy and infrastructure to make these therapies available to the relevant populations, we jeopardize future investment in this extremely promising field.
It is possible that new legislation is needed to create a paradigm that makes all of the above possible, including new payment methodologies and structures through the Centers for Medicare & Medicaid Services, from which private payers could then borrow and follow suit. We would be remiss to not acknowledge the other excellent discussion points raised on this topic by Orkin and Reilly[5].
While the US still awaits its first gene therapy product, the game is on in Europe where the first two gene therapy players have made it down to Contestant’s Row. These are Glybera, approved in Europe in 2012 to treat the ultra-rare disease known as lipoprotein lipase deficiency, in which patients cannot properly process fat, and Strimvelis, approved earlier this year in Europe for adenosine deaminase deficiency, which leaves children stricken with this genetic condition unable to fight against infection. Thus far, Glybera’s $1 million dollar price tag has been paid but once in the roughly four years since its approval, and with great difficulty, according to a report from earlier this year[6]. The German physician who prescribed the therapy described preparing a stack of documentation to convince the German health administrators to pay for the therapy. Meanwhile, Strimvelis received a price tag earlier this year of €594,000 (roughly $660,000) and will only be administered at the Italian research institute where it was developed. The Italian Medicines Agency, which will pay for the therapy, stipulated a risk-sharing agreement with GlaxoSmithKline, the drug’s sponsor, based on clinical outcomes and that the therapy’s performance will be monitored over time. All of this comes despite estimates of only about 15 people per year to be affected across all of Europe[7].
Unfortunately the lack of use of our first two “successful” examples of gene therapy approvals shed light on the clear imbalance between the dozens of potential gene therapy candidates currently being studied, and the massive infrastructural bottlenecks that have allowed for either only a single patient to be treated, or a single center to even possibly think about treating the small universe of appropriate patients. Without the proper structures put in place, at present, it would be seemingly impossible to conceive of treating the relatively small number of patients afflicted with any one of these rare diseases when faced with these issues of pricing and payment. Such an impasse jeopardizes the feasibility of investors to continue to support the development of this promising field.
[1]http://www.nature.com/articles/mtm201634
[2]http://www.wired.com/2013/08/the-fall-and-rise-of-gene-therapy-2/
[3]http://www.forbes.com/sites/matthewherper/2014/03/26/once-seen-as-too-scary-editing-peoples-genes-with-viruses-makes-a-618-million-comeback/#5a93d4935ac9
[4]https://www.washingtonpost.com/business/economy/gene-therapies-offer-dramatic-promise-but-shocking-costs/2015/11/11/01f11cf0-824b-11e5-9afb-0c971f713d0c_story.html
[5]http://science.sciencemag.org/content/352/6289/1059
[6]https://www.technologyreview.com/s/601165/the-worlds-most-expensive-medicine-is-a-bust/
[7]https://www.statnews.com/2016/08/03/gene-therapy-price-gsk/