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.”
Friday Five Podcast: New drug may slow the rate of Alzheimer's disease
The Friday Five covers important stories in health and science research that you may have missed - usually over the previous week, but today's episode is a lookback on important studies over the month of September.
Most recently, on September 27, pharmaceuticals Biogen and Eisai announced that a clinical trial showed their drug, lecanemab, can slow the rate of Alzheimer's disease. There are plenty of controversies and troubling ethical issues in science – and we get into many of them in our online magazine – but this news roundup focuses on scientific creativity and progress to give you a therapeutic dose of inspiration headed into the weekend and the new month.
Listen on Apple | Listen on Spotify | Listen on Stitcher | Listen on Amazon | Listen on Google
This Friday Five episode covers the following studies published and announced over the past month:
- A new drug is shown to slow the rate of Alzheimer's disease
- The need for speed if you want to reduce your risk of dementia
- How to refreeze the north and south poles
- Ancient wisdom about Neti pots could pay off for Covid
- Two women, one man and a baby
Could epigenetic reprogramming reverse aging?
Ten thousand years ago, the average human spent a maximum of 30 years on Earth. Despite the glory of Ancient Greece and the Roman Empire, most of their inhabitants didn’t surpass the age of 35. Between the 1500s and 1800, life expectancy (at least in Europe) fluctuated between 30 and 40 years.
Public health advancements like control of infectious diseases, better diet and clean sanitation, as well as social improvements have made it possible for human lifespans to double since 1800. Although lifespan differs widely today from country to country according to socioeconomic health, the average has soared to 73.2 years.
But this may turn out to be on the low side if epigenetic rejuvenation fulfills its great promise: to reverse aging, perhaps even completely. Epigenetic rejuvenation, or partial reprogramming, is the process by which a set of therapies are trying to manipulate epigenetics – how various changes can affect our genes – and the Yamanaka factors. These Yamanaka factors are a group of proteins that can convert any cell of the body into pluripotent stem cells, a group of cells that can turn into brand new cells, such as those of the brain or skin. At least in theory, it could be a recipe for self-renewal.
“Partial reprogramming tries to knock a few years off of people’s biological age, while preserving their original cell identity and function,” says Yuri Deigin, cofounder and director of YouthBio Therapeutics, a longevity startup utilizing partial reprogramming to develop gene therapies aimed at the renewal of epigenetic profiles. YouthBio plans to experiment with injecting these gene therapies into target organs. Once the cargo is delivered, a specific small molecule will trigger gene expression and rejuvenate those organs.
“Our ultimate mission is to find the minimal number of tissues we would need to target to achieve significant systemic rejuvenation,” Deigin says. Initially, YouthBio will apply these therapies to treat age-related conditions. Down the road, though, their goal is for everyone to get younger. “We want to use them for prophylaxis, which is rejuvenation that would lower disease risk,” Deigin says.
Epigenetics has swept the realm of biology off its feet over the last decade. We now know that we can switch genes on and off by tweaking the chemical status quo of the DNA’s local environment. "Epigenetics is a fascinating and important phenomenon in biology,’’ says Henry Greely, a bioethicist at Stanford Law School. Greely is quick to stress that this kind of modulation (turning genes on and off and not the entire DNA) happens all the time. “When you eat and your blood sugar goes up, the gene in the beta cells of your pancreas that makes insulin is turned on or up. Almost all medications are going to have effects on epigenetics, but so will things like exercise, food, and sunshine.”
Can intentional control over epigenetic mechanisms lead to novel and useful therapies? “It is a very plausible scenario,” Greely says, though a great deal of basic research into epigenetics is required before it becomes a well-trodden way to stay healthy or treat disease. Whether these therapies could cause older cells to become younger in ways that have observable effects is “far from clear,” he says. “Historically, betting on someone’s new ‘fountain of youth’ has been a losing strategy.”
The road to de-differentiation, the process by which cells return to an earlier state, is not paved with roses; de-differentiate too much and you may cause pathology and even death.
In 2003 researchers finished sequencing the roughly 3 billion letters of DNA that make up the human genome. The human genome sequencing was hailed as a vast step ahead in our understanding of how genetics contribute to diseases like cancer or to developmental disorders. But for Josephine Johnston, director of research and research scholar at the Hastings Center, the hype has not lived up to its initial promise. “Other than some quite effective tests to diagnose certain genetic conditions, there isn't a radical intervention that reverses things yet,” Johnston says. For her, this is a testament to the complexity of biology or at least to our tendency to keep underestimating it. And when it comes to epigenetics specifically, Johnston believes there are some hard questions we need to answer before we can safely administer relevant therapies to the population.
“You'd need to do longitudinal studies. You can't do a study and look at someone and say they’re safe only six months later,” Johnston says. You can’t know long-term side effects this way, and how will companies position their therapies on the market? Are we talking about interventions that target health problems, or life enhancements? “If you describe something as a medical intervention, it is more likely to be socially acceptable, to attract funding from governments and ensure medical insurance, and to become a legitimate part of medicine,” she says.
Johnston’s greatest concerns are of the philosophical and ethical nature. If we’re able to use epigenetic reprogramming to double the human lifespan, how much of the planet’s resources will we take up during this long journey? She believes we have a moral obligation to make room for future generations. “We should also be honest about who's actually going to afford such interventions; they would be extraordinarily expensive and only available to certain people, and those are the people who would get to live longer, healthier lives, and the rest of us wouldn't.”
That said, Johnston agrees there is a place for epigenetic reprogramming. It could help people with diseases that are caused by epigenetic problems such as Fragile X syndrome, Prader-Willi syndrome and various cancers.
Zinaida Good, a postdoctoral fellow at Stanford Cancer Institute, says these problems are still far in the future. Any change will be incremental. “Thinking realistically, there’s not going to be a very large increase in lifespan anytime soon,” she says. “I would not expect something completely drastic to be invented in the next 5 to 10 years. ”
Good won’t get any such treatment for herself until it’s shown to be effective and safe. Nature has programmed our bodies to resist hacking, she says, in ways that could undermine any initial benefits to longevity. A preprint that is not yet peer-reviewed reports cellular reprogramming may lead to premature death due to liver and intestinal problems, and using the Yamanaka factors may have the potential to cause cancer, at least in animal studies.
“Side effects are an open research question that all partial reprogramming companies and labs are trying to address,” says Deigin. The road to de-differentiation, the process by which cells return to an earlier state, is not paved with roses; de-differentiate too much and you may cause pathology and even death. Deigin is exploring other, less risky approaches. “One way is to look for novel factors tailored toward rejuvenation rather than de-differentiation.” Unlike Yamanaka factors, such novel factors would never involve taking a given cell to a state in which it could turn cancerous, according to Deigin.
An example of a novel factor that could lower the risk of cancer is artificially introducing mRNA molecules, or molecules carrying the genetic information necessary to make proteins, by using electricity to penetrate the cell instead of a virus. There is also chemical-based reprogramming, in which chemicals are applied to convert regular cells into pluripotent cells. This approach is currently effective only for mice though.
“The search for novel factors tailored toward rejuvenation without de-differentiation is an ongoing research and development effort by several longevity companies, including ours,” says Deigin.
He isn't disclosing the details of his own company’s underlying approach to lowering the risk, but he’s hopeful that something will eventually end up working in humans. Yet another challenge is that, partly because of the uncertainties, the FDA hasn’t seen fit to approve a single longevity therapy. But with the longevity market projected to soar to $600 billion by 2025, Deigin says naysayers are clinging irrationally to the status quo. “Thankfully, scientific progress is moved forward by those who bet for something while disregarding the skeptics - who, in the end, are usually proven wrong.”