
Gene Therapy Was Hailed as a Revolution – Then Came the Bill - pseudolus
https://www.bloomberg.com/news/articles/2019-04-07/gene-therapy-was-hailed-as-a-revolution-then-came-the-bill
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refurb
What this article misses is that even with a price tag of more than $1M, many
of these therapies will _save the system money_.

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.

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anfilt
At that point it's probably just cheaper to get a plane ticket to a country
that does not patent or enforce a patent for the treatment.

~~~
refurb
Unlike small molecules, gene therapy isn't something that somebody can just
whip up in a lab. Similar to biologics, there are often some trade secrets
involved in the manufacturing that require a lot of time and money to figure
out.

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codeulike
CRISPR's not that hard, this guy did it in his garage. Delivering it to cells
is a bit harder, but not that hard unless you're talking brain cells, then the
blood-brain barrier causes trouble.

[https://www.theguardian.com/science/2017/dec/24/josiah-
zayne...](https://www.theguardian.com/science/2017/dec/24/josiah-zayner-diy-
gene-editing-therapy-crispr-interview)

~~~
dekhn
anybody with a decent level of biochemical knowledge can do these things in a
garage (I built a biolab in my garage and work at a lab that does CRISPR).
However, the person you cited is clueless and is just kind of injecting things
into his body without any really thought to efficacy or safety.

There is a big difference between injecting reagents into a single human, and
doing actual medicine.

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aaavl2821
As mentioned in the article, a prominent cost-effectiveness research group,
ICER, suggests that the treatment may be cost effective at prices of up to
$1.5M, but with a different set of the assumptions, the cost-effectiveness
threshold could be as low as $310K.

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_...](https://icer-review.org/wp-
content/uploads/2018/07/ICER_SMA_Final_Evidence_Report_040319.pdf)

~~~
celinehh94
Quick interesting note on this front - ICER is a US non-profit, but has
basically zero influence in the actual pricing of drugs. It's actually illegal
to value drugs this way in the US

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celinehh94
Sorry - should say use the valuation of the drug to determine patient access
to it in the US. AKA, ICER could determine that drug 1 is massively un-cost-
effective in comparison to drug 2, but you cannot restrict access to drug 1
due to this information. Most other countries tie drug price somewhat to
health gain delivered by said drug.

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awongh
One thing that I'd like to know is if the profit _margin_ is the same for one
of these one time treatments as a repeat treatment.

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.

~~~
bluGill
Lower than you might think. Not only do you need to account for all the costs
of developing that treatment, you also need to account for the costs to
looking at a treatment that after some amount of study turns out not to work.
This latter can be very expensive, and worse is an unknown cost, sometimes you
are lucky and a few treatments work out, while other times you hit an unlucky
streak and try a bunch of treatments that don't work out.

~~~
awongh
i theorize it isn’t lower than i think because the article hints that
companies not selling the product at what the market will bear, and instead
would rather price it to a specific margin. to me this is a special industry
in that, if your gamble of profitability doesn’t pay off for something that
already has sunk cost, don’t take it off the market, just sell it for whatever
price the market will bear. that’s your moral responsibility.... not sure what
the argument against that would be

~~~
bluGill
I've read your reply 3 times, I can't figure out what you mean.

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dalbasal
Are these price tags inherent in the treatment itself, or is this a "bleeding
edge prices" issue that will ultimately subside with time and patient volume?

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Gatsky
I'm ashamed when I see how much they are trying to charge. Glybera was a gene
therapy that nobody used basically because it cost too much. This is a clear
example that a company will never reduce the price of such a therapy. The
actions of Mylan and the scumbag Shkreli also highlights the thought processes
of pharma companies. As such, we shouldn't waste our time. The government
should be allowed to negotiate pricing. I don't believe this will suppress
research into rare conditions. There has in fact been an explosion of
therapies for rare conditions in the last 10 years.

~~~
refurb
One of the reasons Glybera failed is that it just wasn't that good of a drug.
It did reduce the symptoms of the disease, but they had zero evidence it
actually reduce medical costs associated with it (hospitalization, etc).

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Aser
The cost will come down. 20 years ago, the cost of sequencing one person's
genome was over $100 million. Today it's $1000.

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snarf21
Not disagreeing with you but can you get a full genome for $1K? I assumed that
was only partial.

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bluGill
Do you need a full genome? If a person has symptoms the doctor doesn't need a
full genome sequence, just enough to verify that it is the/a sequence the
treatment can fix. The cheaper the better, accuracy is important but but
quantity outside the sequence in question is not useful.

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cf
Not to be too snarky but to the question in the article, “The question for
health systems: how much are one-time therapies worth?”, you mean like
vaccines? Presumably, it should cost a similar amount.

~~~
dalbasal
Good analogy.

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.

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ryanmarsh
I think advancements in DNA sequencing (ie nano pore) are going to change the
landscape. Once it costs $50 to do a proper sequencing (not the messy bullshit
23andMe does), along with the analytical tools needed to isolate problematic
sequences, patients and caregivers are going to be clamoring for targeted
treatments. Big pharma will see the money and deliver.

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bonniemuffin
I totally disagree. I don't think the cost of sequencing is the bottleneck
here, and it doesn't need to come down to $50. Even at $1k for a full genome
sequence (which I think is in the range of a good high-quality sequence these
days), it's totally feasible for anyone with a disease to get themselves
sequenced.

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.

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devoply
In capitalism no one sheds any tears if you can't make a business work. If you
won't someone else will. Probably in China or India. They'll happily read all
your papers, develop a copy-cat cure and sell it for 100k maybe even 10k in
the name of Humanism. No one will shed a tear for all the profit investors
lost out on.

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refurb
Are you arguing that Chinese or Indian drug companies don't make a profit? If
so, that wouldn't be accurate at all.

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DubiousPusher
This article is way way too early.

