Breakthrough therapies are breaking patients' banks. Key changes could improve access, experts say.
CSL Behring’s new gene therapy for hemophilia, Hemgenix, costs $3.5 million for one treatment, but helps the body create substances that allow blood to clot. It appears to be a cure, eliminating the need for other treatments for many years at least.
Likewise, Novartis’s Kymriah mobilizes the body’s immune system to fight B-cell lymphoma, but at a cost $475,000. For patients who respond, it seems to offer years of life without the cancer progressing.
These single-treatment therapies are at the forefront of a new, bold era of medicine. Unfortunately, they also come with new, bold prices that leave insurers and patients wondering whether they can afford treatment and, if they can, whether the high costs are worthwhile.
“Most pharmaceutical leaders are there to improve and save people’s lives,” says Jeremy Levin, chairman and CEO of Ovid Therapeutics, and immediate past chairman of the Biotechnology Innovation Organization. If the therapeutics they develop are too expensive for payers to authorize, patients aren’t helped.
“The right to receive care and the right of pharmaceuticals developers to profit should never be at odds,” Levin stresses. And yet, sometimes they are.
Leigh Turner, executive director of the bioethics program, University of California, Irvine, notes this same tension between drug developers that are “seeking to maximize profits by charging as much as the market will bear for cell and gene therapy products and other medical interventions, and payers trying to control costs while also attempting to provide access to medical products with promising safety and efficacy profiles.”
Why Payers Balk
Health insurers can become skittish around extremely high prices, yet these therapies often accompany significant overall savings. For perspective, the estimated annual treatment cost for hemophilia exceeds $300,000. With Hemgenix, payers would break even after about 12 years.
But, in 12 years, will the patient still have that insurer? Therein lies the rub. U.S. payers, are used to a “pay-as-you-go” model, in which the lifetime costs of therapies typically are shared by multiple payers over many years, as patients change jobs. Single treatment therapeutics eliminate that cost-sharing ability.
"As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket,” says Patricia Goldsmith, the CEO of CancerCare.
“There is a phenomenally complex, bureaucratic reimbursement system that has grown, layer upon layer, during several decades,” Levin says. As medicine has innovated, payment systems haven’t kept up.
Therefore, biopharma companies begin working with insurance companies and their pharmacy benefit managers (PBMs), which act on an insurer’s behalf to decide which drugs to cover and by how much, early in the drug approval process. Their goal is to make sophisticated new drugs available while still earning a return on their investment.
New Payment Models
Pay-for-performance is one increasingly popular strategy, Turner says. “These models typically link payments to evidence generation and clinically significant outcomes.”
A biotech company called bluebird bio, for example, offers value-based pricing for Zynteglo, a $2.8 million possible cure for the rare blood disorder known as beta thalassaemia. It generally eliminates patients’ need for blood transfusions. The company is so sure it works that it will refund 80 percent of the cost of the therapy if patients need blood transfusions related to that condition within five years of being treated with Zynteglo.
In his February 2023 State of the Union speech, President Biden proposed three pilot programs to reduce drug costs. One of them, the Cell and Gene Therapy Access Model calls on the federal Centers for Medicare & Medicaid Services to establish outcomes-based agreements with manufacturers for certain cell and gene therapies.
A mortgage-style payment system is another, albeit rare, approach. Amortized payments spread the cost of treatments over decades, and let people change employers without losing their healthcare benefits.
Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
The new payment models that are being discussed aren’t solutions to high prices, says Bill Kramer, senior advisor for health policy at Purchaser Business Group on Health (PBGH), a nonprofit that seeks to lower health care costs. He points out that innovative pricing models, although well-intended, may distract from the real problem of high prices. They are attempts to “soften the blow. The best thing would be to charge a reasonable price to begin with,” he says.
Instead, he proposes making better use of research on cost and clinical effectiveness. The Institute for Clinical and Economic Review (ICER) conducts such research in the U.S., determining whether the benefits of specific drugs justify their proposed prices. ICER is an independent non-profit research institute. Its reports typically assess the degrees of improvement new therapies offer and suggest prices that would reflect that. “Publicizing that data is very important,” Kramer says. “Their results aren’t used to the extent they could and should be.” Pharmaceutical companies tend to price their therapies higher than ICER’s recommendations.
Drug Development Costs Soar
Drug developers have long pointed to the onerous costs of drug development as a reason for high prices.
A 2020 study found the average cost to bring a drug to market exceeded $1.1 billion, while other studies have estimated overall costs as high as $2.6 billion. The development timeframe is about 10 years. That’s because modern therapeutics target precise mechanisms to create better outcomes, but also have high failure rates. Only about 14 percent of all drugs that enter clinical trials are approved by the FDA. Pharma companies, therefore, have an exigent need to earn a profit.
Skewed Incentives Increase Costs
Pricing isn’t solely at the discretion of pharma companies, though. “What patients end up paying has much more to do with their PBMs than the actual price of the drug,” Patricia Goldsmith, CEO, CancerCare, says. Transparency is vital.
PBMs control patients’ access to therapies at three levels, through price negotiations, pricing tiers and pharmacy management.
When negotiating with drug manufacturers, Goldsmith says, “PBMs exchange a preferred spot on a formulary (the insurer’s or healthcare provider’s list of acceptable drugs) for cash-base rebates.” Unfortunately, 25 percent of the time, those rebates are not passed to insurers, according to the PBGH report.
Then, PBMs use pricing tiers to steer patients and physicians to certain drugs. For example, Kramer says, “Sometimes PBMs put a high-cost brand name drug in a preferred tier and a lower-cost competitor in a less preferred, higher-cost tier.” As the PBGH report elaborates, “(PBMs) are incentivized to include the highest-priced drugs…since both manufacturing rebates, as well as the administrative fees they charge…are calculated as a percentage of the drug’s price.
Finally, by steering patients to certain pharmacies, PBMs coordinate patients’ access to treatments, control patients’ out-of-pocket costs and receive management fees from the pharmacies.
Therefore, Goldsmith says, “As long as formularies are based on profits to middlemen…Americans’ healthcare costs will continue to skyrocket.”
Transparency into drug pricing will help curb costs, as will new payment strategies. What will make the most impact, however, may well be the development of a new reimbursement system designed to handle dramatic, breakthrough drugs. As Kramer says, “We need a better system to identify drugs that offer dramatic improvements in clinical care.”
Is a Successful HIV Vaccine Finally on the Horizon?
Few vaccines have been as complicated—and filled with false starts and crushed hopes—as the development of an HIV vaccine.
While antivirals help HIV-positive patients live longer and reduce viral transmission to virtually nil, these medications must be taken for life, and preventative medications like pre-exposure prophylaxis, known as PrEP, need to be taken every day to be effective. Vaccines, even if they need boosters, would make prevention much easier.
In August, Moderna began human trials for two HIV vaccine candidates based on messenger RNA.
As they have with the Covid-19 pandemic, mRNA vaccines could change the game. The technology could be applied for gene editing therapy, cancer, other infectious diseases—even a universal influenza vaccine.
In the past, three other mRNA vaccines completed phase-2 trials without success. But the easily customizable platforms mean the vaccines can be tweaked better to target HIV as researchers learn more.
Ever since HIV was discovered as the virus causing AIDS, researchers have been searching for a vaccine. But the decades-long journey has so far been fruitless; while some vaccine candidates showed promise in early trials, none of them have worked well among later-stage clinical trials.
There are two main reasons for this: HIV evolves incredibly quickly, and the structure of the virus makes it very difficult to neutralize with antibodies.
"We in HIV medicine have been desperate to find a vaccine that has effectiveness, but this goal has been elusive so far."
"You know the panic that goes on when a new coronavirus variant surfaces?" asked John Moore, professor of microbiology and immunology at Weill Cornell Medicine who has researched HIV vaccines for 25 years. "With HIV, that kind of variation [happens] pretty much every day in everybody who's infected. It's just orders of magnitude more variable a virus."
Vaccines like these usually work by imitating the outer layer of a virus to teach cells how to recognize and fight off the real thing off before it enters the cell. "If you can prevent landing, you can essentially keep the virus out of the cell," said Larry Corey, the former president and director of the Fred Hutchinson Cancer Research Center who helped run a recent trial of a Johnson & Johnson HIV vaccine candidate, which failed its first efficacy trial.
Like the coronavirus, HIV also has a spike protein with a receptor-binding domain—what Moore calls "the notorious RBD"—that could be neutralized with antibodies. But while that target sticks out like a sore thumb in a virus like SARS-CoV-2, in HIV it's buried under a dense shield. That's not the only target for neutralizing the virus, but all of the targets evolve rapidly and are difficult to reach.
"We understand these targets. We know where they are. But it's still proving incredibly difficult to raise antibodies against them by vaccination," Moore said.
In fact, mRNA vaccines for HIV have been under development for years. The Covid vaccines were built on decades of that research. But it's not as simple as building on this momentum, because of how much more complicated HIV is than SARS-CoV-2, researchers said.
"They haven't succeeded because they were not designed appropriately and haven't been able to induce what is necessary for them to induce," Moore said. "The mRNA technology will enable you to produce a lot of antibodies to the HIV envelope, but if they're the wrong antibodies that doesn't solve the problem."
Part of the problem is that the HIV vaccines have to perform better than our own immune systems. Many vaccines are created by imitating how our bodies overcome an infection, but that doesn't happen with HIV. Once you have the virus, you can't fight it off on your own.
"The human immune system actually does not know how to innately cure HIV," Corey said. "We needed to improve upon the human immune system to make it quicker… with Covid. But we have to actually be better than the human immune system" with HIV.
But in the past few years, there have been impressive leaps in understanding how an HIV vaccine might work. Scientists have known for decades that neutralizing antibodies are key for a vaccine. But in 2010 or so, they were able to mimic the HIV spike and understand how antibodies need to disable the virus. "It helps us understand the nature of the problem, but doesn't instantly solve the problem," Moore said. "Without neutralizing antibodies, you don't have a chance."
Because the vaccines need to induce broadly neutralizing antibodies, and because it's very difficult to neutralize the highly variable HIV, any vaccine will likely be a series of shots that teach the immune system to be on the lookout for a variety of potential attacks.
"Each dose is going to have to have a different purpose," Corey said. "And we hope by the end of the third or fourth dose, we will achieve the level of neutralization that we want."
That's not ideal, because each individual component has to be made and tested—and four shots make the vaccine harder to administer.
"You wouldn't even be going down that route, if there was a better alternative," Moore said. "But there isn't a better alternative."
The mRNA platform is exciting because it is easily customizable, which is especially important in fighting against a shapeshifting, complicated virus. And the mRNA platform has shown itself, in the Covid pandemic, to be safe and quick to make. Effective Covid vaccines were comparatively easy to develop, since the coronavirus is easier to battle than HIV. But companies like Moderna are capitalizing on their success to launch other mRNA therapeutics and vaccines, including the HIV trial.
"You can make the vaccine in two months, three months, in a research lab, and not a year—and the cost of that is really less," Corey said. "It gives us a chance to try many more options, if we've got a good response."
In a trial on macaque monkeys, the Moderna vaccine reduced the chances of infection by 85 percent. "The mRNA platform represents a very promising approach for the development of an HIV vaccine in the future," said Dr. Peng Zhang, who is helping lead the trial at the National Institute of Allergy and Infectious Diseases.
Moderna's trial in humans represents "a very exciting possibility for the prevention of HIV infection," Dr. Monica Gandhi, director of the UCSF-Gladstone Center for AIDS Research, said in an email. "We in HIV medicine have been desperate to find a vaccine that has effectiveness, but this goal has been elusive so far."
If a successful HIV vaccine is developed, the series of shots could include an mRNA shot that primes the immune system, followed by protein subunits that generate the necessary antibodies, Moore said.
"I think it's the only thing that's worth doing," he said. "Without something complicated like that, you have no chance of inducing broadly neutralizing antibodies."
"I can't guarantee you that's going to work," Moore added. "It may completely fail. But at least it's got some science behind it."
New Podcast: The Lead Scientist for the NASA Mission to Venus
The "Making Sense of Science" podcast features interviews with leading medical and scientific experts about the latest developments and the big ethical and societal questions they raise. This monthly podcast is hosted by journalist Kira Peikoff, founding editor of the award-winning science outlet Leaps.org.
This month, our guest is JPL's Dr. Suzanne Smrekar, who will be pushing the boundaries of knowledge about the planet Venus during the upcoming VERITAS mission set to launch in 2028. Why did Earth's twin planet develop so differently than our own? Could Venus ever have hosted life? What is the bigger purpose for humanity in studying the solar system -- is it purely scientific, or is it also a matter of art and philosophy? Hear Dr. Smrekar discuss all this and more on the latest episode.
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Kira Peikoff was the editor-in-chief of Leaps.org from 2017 to 2021. As a journalist, her work has appeared in The New York Times, Newsweek, Nautilus, Popular Mechanics, The New York Academy of Sciences, and other outlets. She is also the author of four suspense novels that explore controversial issues arising from scientific innovation: Living Proof, No Time to Die, Die Again Tomorrow, and Mother Knows Best. Peikoff holds a B.A. in Journalism from New York University and an M.S. in Bioethics from Columbia University. She lives in New Jersey with her husband and two young sons. Follow her on Twitter @KiraPeikoff.