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.”
Drugs That Trick Older People’s Bodies to Behave Younger Might Boost the Effectiveness of a COVID-19 Vaccine
In our April 23rd editorial for this magazine, we argued that addressing the COVID-19 pandemic requires that we both fight the SARS-CoV-2 virus and fortify the human hosts who are most vulnerable to it.
Two recent phase 2 studies in older adults have suggested that a new category of drugs called rapalogues can in some cases increase the immunization capacity of older adults.
Because people over 70 account for more than 80 percent of reported COVID-19 deaths globally, this means we must do everything possible to protect our elders.
A range of recent studies have suggested that systemic knobs might metaphorically be turned to slow the cellular aging process, making us better able to fight off the many diseases correlated with aging. These types of systemic changes might be used to stem the specific decline in immunity caused by aging and to increases the biological capacity of elderly people to effectively fight viral infection.
But while helping make older people more resilient in the face of a viral infection is critical, that's not the only way geroscience can help in our fight against this deadly pandemic.
As we move toward hopefully developing one or more COVID-19 vaccines, researchers must more fully appreciate the ways in which traditional vaccines can be less effective in older people than in younger ones.
Repeated studies have shown that the flu vaccine, for example, has lower efficacy in older people than in younger ones. Older people tend to develop fewer antibodies after being vaccinated because a subset of their white blood cells, called T cells, have become less responsive over time. Some inflammatory peptides that increase with aging are also preventing the action of those T cells.
This is why there's a distinct possibility that a future COVD-19 vaccine, particularly one utilizing the traditional attenuated virus approach, could be less effective in older people than in younger ones.
Given the extreme urgency of developing vaccines that work well for everyone, we need to make sure that researchers are exploring all of the ways our elders can be best protected. While generating a vaccine that works equally well for people of all ages would be ideal, we can't count on that.
One way to bridge this gap might be to trick the bodies of older people into behaving as if they are younger just at the moment what a vaccine is delivered by giving them pre-immunization boosters.
Two recent phase 2 studies in older adults have suggested that a new category of drugs called rapalogues can in some cases increase the immunization capacity of older adults. Use of the drug for a short time period before flu shot immunization increased the antibody production for the flu and resulted in a 52 percent decrease in the occurrence of severe diseases needing medical help or hospitalization. This short-term pre-immunization intervention can also decrease the severity of serious respiratory tract infections, the deadliest manifestations of COVID-19, by similar magnitude. These patients also had almost half the incidence of the non-COVID-19 coronaviruses associated with the common cold.
The fact that those people were protected by treatment before hospitalization suggests metformin may have a role in boosting the vaccination of older people.
An inexpensive generic drug called metformin similarly targets the decline in immunity and inflammation (and extends health span and lifespan) in animals and has been used for decades to protect against the flu. A recent paper from a hospital in Wuhan, China showed that mortality of elderly COVID-19 diabetic patients on metformin was 25 percent less than that of patients with diabetes but not on metformin.
Another study from the U.S. showed that COVID-19 patients on metformin had a 20 percent decrease in mortality and lower inflammation. The fact that those people were protected by treatment before hospitalization suggests metformin may have a role in boosting the vaccination of older people.
We don't yet know whether rapalogues or metformin could be used as COVID-19 immunization boosters, not least because we don't have those vaccines. But we can and should make sure that all vaccine trials including older subjects also consider offering a subset of those subjects appropriate doses of rapalogues or metformin to explore whether doing so can boost the efficacy of a given vaccine.
If we weren't in the middle of the worst pandemic in a century, we would have more time to test our vaccines slowly and sequentially. In the context of the current crisis, however, testing whether immunization boosters might increase the efficacy of potential COVID-19 vaccines for older adults is at the very least a hypothesis worth exploring.
How We Can Return to Normal Life in the COVID-19 Era
I was asked recently when life might return to normal. The question is simple but the answer is complex, with many knowns, lots of known unknowns, and some unknown unknowns. But I'll give it my best shot.
To get the fatality rate down to flu-like levels would require that we cut Covid-19 fatalities down by a factor of 5.
Since I'm human (and thus want my life back), I might be biased toward optimism.
Here's one way to think about it: Is there another infection that causes sickness and death at levels that we tolerate? The answer, of course, is 'yes': influenza.
According to the Centers for Disease Control, from 2010 to 2019, an average of 30 million Americans had the flu each year, leading to an annual average of 37,000 deaths. This works out to an infection-fatality rate, or IFR, of 0.12 percent. We've tolerated that level of illness death from influenza for a century.
Before going on, let's get one thing out of the way: Back in March, Covid-19 wasn't, as some maintained, "like the flu," and it still isn't. Since then, the U.S. has had 3.9 million confirmed Covid-19 cases and 140,000 deaths, for an IFR of 3.6 percent. Taking all the cases — including asymptomatic patients and those with minimal symptoms who were never tested for Covid-19 — into account, the real IFR is probably 0.6 percent, or roughly 5 times that of the flu.
Nonetheless, even a partly effective vaccine, combined with moderately effective medications, could bring Covid-19 numbers down to a tolerable, flu-like, threshold. It's a goal that seems within our reach.
Chronic mask-wearing and physical distancing are not my idea of normal, nor, I would venture to guess, would most other Americans consider these desirable states in which to live. We need both now to achieve some semblance of normalcy, but they're decidedly not normal life. My notion of normal: daily life with no or minimal mask wearing, open restaurants and bars, ballparks with fans, and theaters with audiences.
My projection for when we might get there: perhaps a year from now.
To get the fatality rate down to flu-like levels would require that we cut Covid-19 fatalities down by a factor of 5, via some combination of fewer symptomatic cases and a lower chance that a symptomatic patient will go on to die. How might that happen?
First, we have to make some impact on young people – getting them to follow the public health directives at higher rates than they are currently. The main reason we need to push younger people to stay safe is that they can spread Covid-19 to vulnerable people (those who are older, with underlying health problems). But, once the most vulnerable are protected (through the deployment of some combination of effective medications and a vaccine), the fact that some young people aren't acting safely – or maybe won't take a vaccine themselves – wouldn't cause so much concern. The key is whether the people at highest risk for bad outcomes are protected.
Then there's the vaccine. The first principle: We don't need a 100 percent-effective vaccine injected into 320 million deltoid muscles (in the U.S. alone). Thank God, since it's fanciful to believe that we can have a vaccine that's 100 percent effective, universally available by next summer, and that each and every American agrees to be vaccinated.
How are we doing in our vaccine journey? We've been having some banner days lately, with recent optimistic reports from several of the vaccine companies. In one report, the leading candidate vaccine, the one effort being led by Oxford University, led to both antibodies and a cellular immune response, a very helpful belt-and-suspenders approach that increases the probability of long-lasting immunity. This good news comes on the heels of the positive news regarding the American vaccine being made by Moderna earlier in July.
While every article about vaccines sounds the obligatory cautionary notes, to date we've checked every box on the path to a safe and effective vaccine. We might not get there, but most experts are now predicting an FDA-approvable vaccine (more than 50 percent effective with no show-stopping side effects) by early 2021.
It is true that we don't know how long immunity will last, but that can be a problem to solve later. In this area, time is our friend. If we can get to an effective vaccine that lasts for a year or two, over time we should be able to discover strategies (more vaccine boosters, new and better medications) to address the possibility of waning immunity.
All things considered, I'm going to put my nickel down on the following optimistic scenario: we'll have one, and likely several, vaccines that have been proven to be more than 50 percent effective and safe by January, 2021.
If only that were the finish line.
Once we vaccinate a large fraction of high-risk patients, having a moderate number of unvaccinated people running around won't pose as much threat.
The investments in manufacturing and distribution should pay off, but it's still inconceivable that we'll be able to get vaccines to 300 million people in three to six months. For the 2009 Swine Flu, we managed to vaccinate about 1 in 4 Americans over six months.
So we'll need to prioritize. First in line will likely be the 55 million Americans over 65, and the six to eight million patient-facing healthcare workers. (How to sort priorities among people under 65 with "chronic diseases" will be a toughie.) Vaccinating 80-100 million vulnerable people, plus clinicians, might be achievable by mid-21.
If we can protect vulnerable people with an effective vaccine (with the less vulnerable waiting their turn over a subsequent 6-12 month period), that may be enough to do the trick. (Of course, vulnerable people may also be least likely to develop immunity in response to a vaccine. That could be an Achilles' heel – time will tell.)
Why might that be enough? Once we vaccinate a large fraction of high-risk patients, having a moderate number of unvaccinated people running around won't pose as much threat. Since they're at lower risk, they have a lower chance of getting sick and dying than those who received the vaccine first.
We're likely to have better meds by then, too. Since March, we've discovered two moderately effective medications for Covid-19 — remdesivir and dexamethasone. It seems likely that we'll find others by next summer, perhaps even a treatment that prevents patients from getting ill in the first place. There are many such therapies, ranging from zinc to convalescent plasma, currently being studied.
Moreover, we know that hospitals that are not overrun with Covid-19 have lower mortality rates. If we've gotten a fairly effective vaccine into most high-risk people, the hospitals are unlikely to be overwhelmed – another factor that may help lower the mortality rate to flu-like levels.
All of these factors – vaccination of most vulnerable people, one or two additional effective medications, hospitals and ICU's that aren't overwhelmed – could easily combine to bring the toll of Covid-19 down to something that resembles that of the flu. Then, we should be able to return to normal life.
Whatever the reason, if enough people refuse the vaccine, all bets are off.
What do I worry about? There's the growing anti-vaxxer movement, for one. On top of that, it seems that many Americans worry that a vaccine discovered in record speed won't be safe, or that the FDA approval process will have been corrupted by political influences. Whatever the reason, if enough people refuse the vaccine, all bets are off.
Assuming only high-risk people do get vaccinated, there will still be cases of Covid-19, maybe even mini-outbreaks, well into 2021 and likely 2022. Obviously, that's not ideal, and we should hope for a vaccine that results in the complete eradication of Covid-19. But the point is that, even with flu-like levels of illness and death, we should still be able to achieve "normal."
Hope is not a strategy, as the saying goes. But it is hope, which is more than we've had for a while.