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.”
No, the New COVID Vaccine Is Not "Morally Compromised"
The approval of the Johnson & Johnson COVID-19 vaccine has been heralded as a major advance. A single-dose vaccine that is highly efficacious at removing the ability of the virus to cause severe disease, hospitalization, and death (even in the face of variants) is nothing less than pathbreaking. Anyone who is offered this vaccine should take it. However, one group advises its adherents to preferentially request the Moderna or Pfizer vaccines instead in the quest for morally "irreproachable" vaccines.
Is this group concerned about lower numerical efficacy in clinical trials? No, it seems that they have deemed the J&J vaccine "morally compromised". The group is the U.S. Conference of Catholic Bishops and if something is "morally compromised" it is surely not the vaccine. (Notably Pope Francis has not taken such a stance).
At issue is a cell line used to manufacture the vaccine. Specifically, a cell line used to grow the adenovirus vector used in the vaccine. The purpose of the vector is to carry a genetic snippet of the coronavirus spike protein into the body, like a Trojan Horse ferrying in an enemy combatant, in order to safely trigger an immune response without any chance of causing COVID-19 itself.
It is my hope that the country's 50 million Catholics do not heed the U.S. Conference of Bishops' potentially deadly advice and instead obtain whichever vaccine is available to them as soon as possible.
The cell line of the vector, known as PER.C6, was derived from a fetus that was aborted in 1985. This cell line is prolific in biotechnology, as are other fetal-derived cell lines such as HEK-293 (human embryonic kidney), used in the manufacture of the Astra Zeneca COVID-19 vaccine. Indeed, fetal cell lines are used in the manufacture of critical vaccines directed against pathogens such as hepatitis A, rubella, rabies, chickenpox, and shingles and were used to test the Moderna and Pfizer COVID-19 vaccines (which, accordingly, the U.S. Conference of Bishops deem to only raise moral "concerns").
As such, fetal cell lines from abortions are a common and critical component of biotechnology that we all rely on to improve our health. Such cell lines have been used to help find treatments for cancer, Ebola, and many other diseases.
Dr. Andrea Gambotto, a vaccine scientist at the University of Pittsburgh School of Medicine, explained to Science magazine last year why fetal cells are so important to vaccine development: "Cultured [nonhuman] animal cells can produce the same proteins, but they would be decorated with different sugar molecules, which—in the case of vaccines—runs the risk of failing to evoke a robust and specific immune response." Thus, the fetal cells' human origins are key to their effectiveness.
So why the opposition to this life-saving technology, especially in the midst of the deadliest pandemic in over a century? How could such a technology be "morally compromised" when morality, as I understand it, is a code of values to guide human life on Earth with the purpose of enhancing well-being?
By any measure, the J&J vaccine accomplishes that, since human life, not embryonic or fetal life, is the standard of value. An embryo or fetus in the earlier stages of development, while harboring the potential to grow into a human being, is not the moral equivalent of a person. Thus, creating life-saving medical technology using cells that would have otherwise been destroyed is not in conflict with a proper moral code. To me, it is nihilistic to oppose these vaccines on the grounds cited by the U.S. Conference of Bishops.
Reason, the rational faculty, is the human means of knowledge. It is what one should wield when approaching a scientific or health issue. Appeals from clerics, devoid of any need to tether their principles to this world, should not have any bearing on one's medical decision-making.
In the Dark Ages, the Catholic Church opposed all forms of scientific inquiry, even castigating science and curiosity as the "lust of the eyes": One early Middle Ages church father reveled in his rejection of reality and evidence, proudly declaring, "I believe because it is absurd." This organization, which tyrannized scientists such as Galileo and murdered the Italian cosmologist Bruno, today has shown itself to still harbor anti-science sentiments in its ranks.
It is my hope that the country's 50 million Catholics do not heed the U.S. Conference of Bishops' potentially deadly advice and instead obtain whichever vaccine is available to them as soon as possible. When judged using the correct standard of value, vaccines using fetal cell lines in their development are an unequivocal good -- while those who attempt to undermine them deserve a different category altogether.
Dr. Adalja is focused on emerging infectious disease, pandemic preparedness, and biosecurity. He has served on US government panels tasked with developing guidelines for the treatment of plague, botulism, and anthrax in mass casualty settings and the system of care for infectious disease emergencies, and as an external advisor to the New York City Health and Hospital Emergency Management Highly Infectious Disease training program, as well as on a FEMA working group on nuclear disaster recovery. Dr. Adalja is an Associate Editor of the journal Health Security. He was a coeditor of the volume Global Catastrophic Biological Risks, a contributing author for the Handbook of Bioterrorism and Disaster Medicine, the Emergency Medicine CorePendium, Clinical Microbiology Made Ridiculously Simple, UpToDate's section on biological terrorism, and a NATO volume on bioterrorism. He has also published in such journals as the New England Journal of Medicine, the Journal of Infectious Diseases, Clinical Infectious Diseases, Emerging Infectious Diseases, and the Annals of Emergency Medicine. He is a board-certified physician in internal medicine, emergency medicine, infectious diseases, and critical care medicine. Follow him on Twitter: @AmeshAA
When NASA's Perseverance rover landed successfully on Mars on February 18, 2021, calling it "one giant leap for mankind" – as Neil Armstrong said when he set foot on the moon in 1969 – would have been inaccurate. This year actually marked the fifth time the U.S. space agency has put a remote-controlled robotic exploration vehicle on the Red Planet. And it was a female engineer named Donna Shirley who broke new ground for women in science as the manager of both the Mars Exploration Program and the 30-person team that built Sojourner, the first rover to land on Mars on July 4, 1997.
For Shirley, the Mars Pathfinder mission was the climax of her 32-year career at NASA's Jet Propulsion Laboratory (JPL) in Pasadena, California. The Oklahoma-born scientist, who earned her Master's degree in aerospace engineering from the University of Southern California, saw her profile skyrocket with media appearances from CNN to the New York Times, and her autobiography Managing Martians came out in 1998. Now 79 and living in a Tulsa retirement community, she still embraces her status as a female pioneer.
"Periodically, I'll hear somebody say they got into the space program because of me, and that makes me feel really good," Shirley told Leaps.org. "I look at the mission control area, and there are a lot of women in there. I'm quite pleased I was able to break the glass ceiling."
Her $25-million, 25-pound microrover – powered by solar energy and designed to get rock samples and test soil chemistry for evidence of life – was named after Sojourner Truth, a 19th-century Black abolitionist and women's rights activist. Unlike Mars Pathfinder, Shirley didn't have to travel more than 131 million miles to reach her goal, but her path to scientific fame as a woman sometimes resembled an asteroid field.
As a high-IQ tomboy growing up in Wynnewood, Oklahoma (pop. 2,300), Shirley yearned to escape. She decided to become an engineer at age 10 and took flying lessons at 15. Her extraterrestrial aspirations were fueled by Ray Bradbury's The Martian Chronicles and Arthur C. Clarke's The Sands of Mars. Yet when she entered the University of Oklahoma (OU) in 1958, her freshman academic advisor initially told her: "Girls can't be engineers." She ignored him.
Years later, Shirley would combat such archaic thinking, succeeding at JPL with her creative, collaborative management style. "If you look at the literature, you'll find that teams that are either led by or heavily involved with women do better than strictly male teams," she noted.
However, her career trajectory stalled at OU. Burned out by her course load and distracted by a broken engagement to marry a fellow student, she switched her major to professional writing. After graduation, she applied her aeronautical background as a McDonnell Aircraft technical writer, but her boss, she says, harassed her and she faced gender-based hostility from male co-workers.
Returning to OU, Shirley finished off her engineering degree and became a JPL aerodynamist in 1966 after answering an ad in the St. Louis Post-Dispatch. At first, she was the only female engineer among the research center's 2,000-odd engineers. She wore many hats, from designing planetary atmospheric entry vehicles to picking the launch date of November 4, 1973 for Mariner 10's mission to Venus and Mercury.
By the mid-1980's, she was managing teams that focused on robotics and Mars, delivering creative solutions when NASA budget cuts loomed. In 1989, the same year the Sojourner microrover concept was born, President George H.W. Bush announced his Space Exploration Initiative, including plans for a human mission to Mars by 2019.
That target, of course, wasn't attained, despite huge advances in technology and our understanding of the Martian environment. Today, Shirley believes humans could land on Mars by 2030. She became the founding director of the Science Fiction Museum and Hall of Fame in Seattle in 2004 after leaving NASA, and to this day, she enjoys checking out pop culture portrayals of Mars landings – even if they're not always accurate.
After the novel The Martian was published in 2011, which later was adapted into the hit film starring Matt Damon, Shirley phoned author Andy Weir: "You've got a major mistake in here. It says there's a storm that tries to blow the rocket over. But actually, the Mars atmosphere is so thin, it would never blow a rocket over!"
Fearlessly speaking her mind and seeking the stars helped Donna Shirley make history. However, a 2019 Washington Post story noted: "Women make up only about a third of NASA's workforce. They comprise just 28 percent of senior executive leadership positions and are only 16 percent of senior scientific employees." Whether it's traveling to Mars or trending toward gender equality, we've still got a long way to go.