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.
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.
Parent is asking how it can be ethical to place such a large price tag on a lifesaving therapy if the materials themselves are cheap. It's one thing for AMD or Intel to recoup engineering costs with outlandish per-chip costs as compared to the cost of manufacturing itself. However, serious ethical questions about profit margins and recouping R&D appear once someone's life is directly tied to usage.
That being said, obviously we have to fund development somehow.
This is a great comment, but I have to say my comment was rather rushed. I was implying more that the idea of trade secrets on life-saving treatment was unethical. The question of funding is an important discussion, but I was trying to discuss the trade secret details and I didn't really get my point across in the comment.
That honestly hadn't occurred to me; I'm much more familiar with fields where most of the important details end up patented. I generally view all forms of intellectual property (patents, trade secrets, copyrights) as nothing more than mechanisms by which to exact funding.
I suppose a trade secret would prevent circumventing IP law by heading to a more permissive jurisdiction and is potentially indefinite. But then again, if anyone ever successfully reverse engineered it (or it leaked) my understanding is you can't patent it in retrospect? So it seems like a huge risk to me.
From an ethical standpoint, I'm not seeing where it would be any worse than a patent (one that's actually enforced). Unless you're concerned about the possibility of the knowledge becoming lost to humanity? Or something else?
An aside: I wouldn't be optimistic about the usefulness of trade secrets on their own in the biomedical sciences. It can certainly be tedious to reverse engineer something, but my impression is that it's generally the IP laws that stop your potential competition.
It's ethical, because as a society we need to look at the long term rather than any specific treatment. It's better for us if private investors invest money into lifesaving treatments, because it means that more of them will be available earlier to people. If investors go and invest in something else then nobody's getting the benefit of the medicine.
Let's say we have a disease that kills 1000 people per year. Let's look at a 40 year period.
1. No cure is researched or found in 40 years. Total death count: 40,000.
2. For the first 10 years no cure is found. After 10 years a company comes along and creates a lifesaving cure, however it's expensive - only 500 people per year can afford it. The patent on it lasts 20 years. After 20 years another company creates a generic version of it that 990 people can afford. In the first 10 years 10,000 people die, in the following 20 years another 10,000 people die, in the last 10 years 100 people die. Total death count: 20,100.
3. No cure is found in the first 20 years, then a government funded research team finds a cure. A company picks it up and creates a generic, where 99% people can afford it. In the first 20 years 20,000 people die. In the latter 20 years 200 people die. Total death count: 20,200.
Being early matters in medicine. It's always easy to look at an expensive treatment and say that this should be much cheaper, but we usually don't consider that forcing investors out of healthcare means that less research will be done. This means fewer treatments and a longer time before a treatment is found.
The problem isn't that a government funded research team is slower, it's that the private research team is in addition to the government research team. There are an uncountable number of illnesses and conditions that treatments could help with, but we have only so many resources to throw at these problems. Additional resources will allow us to find treatments for problems that we couldn't afford to research otherwise.
If the government invests $100 billion into medical research and private companies invest another $100 billion then we're probably getting more medical research done than if only the government invested $100 billion into medical research, and the private companies spent the $100 billion on making movies.
I mean if we're only looking at made up numbers anyway isn't the 3rd scenario preferable? Almost the same number of people died, but there was no 20 year long period where people were paying extortionate rates for a medicine, and it took 30 years before the diseases was effectively cured, as opposed to the 20 years it took before a government funded cure came along.
You might even argue that the money saved by not having a patent could be used to save even more lives.
I like your comment, it explains a lot. It seems that the system was built the way, that makes a drug research to grow a pie, while in an ideal world where everyone is happy and everything is fair, drug research would shrink the pie: it is the goal of medicine to eliminate all diseases. It means, that all that system is working on self-destruction, but we allow them to get excessive profits now, to make it work.
There is only one detail I cannot understand. Why competition doesn't work? Why some new investors (who are not invested in drugs yet) do not invest in the research of new drug that heals all the diseases, to sell this drug for $1 -- they would destroy existing system, but they would get all the market at once. (Or in a smaller scale they might make a drug that treats some disease once and for all, and shrink not the pie overall, but some part of it).
Competition does work. You can see that by looking at the average profit margins for drug companies: they aren't particularly high. The problem is that drug development is just really hard and expensive. All the low hanging fruit has already been picked.
Another important factor is that it's not just a matter of funding but a matter of motivation. So for instance imagine we just do away with market economics and decide 'Okay, from now on the government will distribute $x billion per year to fund research and development of new drugs. In exchange, prices will also be government controlled to ensure equitable access for all to life saving treatment.'
This sounds great. We'd like to imagine that the companies would now expend all their energy towards developing new treatments, even ones that might not have been economically feasible before (think: the 'problem' of cure vs treat), and everybody would live happily ever after. Unfortunately, there's another way of looking at this. You just changed the company's goal away from market success and onto playing a game of min-maxing on government funding.
We have countless analogs to draw from here. Anytime a complex industry starts getting involved with government funding suddenly the entire game changes. It's not about producing anything, but instead about doing exactly what's necessary to keep, and maximize, the amount of funding received. And sure we'd like to imagine you could just create a million rules and regulations to try to ensure that this means exactly 'producing new amazing treatments' but actually doing that is not really practical. And, that's also ignoring the fact that these systems also rapidly lend themselves towards corruption:
'Well I tell you what Senator Pharmaceutical Commission Chair, we've been looking at building a new pharmaceutical research facility. And [your state] is looking right top notch. And you know what, voters will love those jobs we'll bring, and it'll even be a tax windfall in the longrun. The only thing that's stopping us from this is resources. Just something to keep in mind when you go draw up that next fiscal allotment. And ya know, you also might want to consider retirement. Once you leave office - we'd be mighty grateful for some of those great insights you have. We're always looking for consultants with the right sort of experience, if you know what I mean.'
It's interesting to speculate on the "It costs $1 to press the button and $10K for knowing which button to press" kinds of problems. I mean, if you spend several hundred thousand on a medical degree, it is ethical to ignore someone dying if they can't pay you? Personally, I think it is -- nobody should be forced to do something just because they know how. However, I can totally understand the other point of view. Do the clinics who refuse patients who can't pay watch those people suffer and die? Of course not. It would be horrible if they had to. Would you ever choose to expose yourself to the information that could save people lives if in exchange you would have to choose between watching people suffer or go into bankruptcy as you fail to repay your loans that gave you the information in the first place.
It sucks. I'm with some others who say that we should try to improve our society so that nobody would have to make such a choice.
In the US, hospitals are legally required to treat patients in serious condition regardless of ability to pay. The hospital has to at least get the patient stabilized before discharge. Hospitals receive some government funding for that, and then they try to make up the rest of the cost by raising prices for insured patients.
Clinics aren't subject to the same requirement and can legally turn indigent patients away.
Playing devil's advocate: there may be an argument that such care would not have been developed without the free-market monetary incentive. (Maybe not; maybe it would have been developed thanks to some government-funded grant. The point is: it's worth understanding what's possible and impossible in our current system.)
I work for a government driven genome research company in the UK, there are many others like this across Europe. Gov funding isn't such a problem in Europe where healthcare is a government issue.
Hmmmm: The food that you ate last night might saved a life or two in Africa. Or given a child the nutrition it needs. You could have done just fine with half of what you ate...
In a market-oriented society, it's unethical to put in place rules that divert capital and talent way from the development of lifesaving medical care. (And the half-ass refrain of accepting a market economy generally, but making an exception for medical care as being "too important to leave to the market" makes no sense. Unless you tamp down on the flow of capital to other industries, designating some areas as "too important" to leave to the market will simply cause capital to flee to, e.g. dating websites, leaving the "too important" industries as ghettos.)
The ethical thing to do is constructing a system that maximizes the amount of lifesaving medical care at minimum cost. Doing that requires acknowledging market forces. Scientists and engineers aren't any more altruistic than anyone else. These days the incoming classes at investment banks are full of physics, biology, and chemistry majors that could easily have gotten a PhD and went to go work for NIH. In the healthcare space, there is at least the potential for making a lot of money by doing a startup with the hopes of getting acquired by one of the big pharma companies. If you take that option away--if developing lifesaving medical care is a field that nets you at best a GS-scale government job--talent and capital are going to go develop dating apps instead.
Still does not stop someone from trying since they now know what to look for. Also genetic synthesis has gotten cheaper and so has sequencing.
Moreover a lot techniques for gene therapy are already in the literature. Moreover you have to document what it's doing or what your doing for approval (in-case of a procedure).
gene therapy isn't something you can just whip up in a random lab and apply to people without there being dire consequences (heck, that happens even in top research institutions).
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.
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.
Tell that to the guy that tried to create HIV resistance babies in China. He had a decent lab yet both babies he created didn't have ccr5 hit: the crispr missed target.
That's a bit of an understatement. The difference between doing CRISPR on a cell and a petri dish and doing it in a human is huge. That's why no one has done it yet.
I don't think if the question is whether large bills can be handled by distributing $1M payments over N years. The question is, should this really be costing $1M? I understand if there is a billion dollar investment by big pharma that benefits 1000 people and so there is no other way but to charge $1M. However, it appears that fundamental techniques are all same and it gets reused for hundreds or thousands different treatments. So with cost spread, the cost to patient shouldn't be $1M. If big pharma has life saving treatment and they thought they got people by their balls to pay up any ransom amount then its just wrong.
For many of these diseases, yes there are only a a few thousand patients in the world.
And although gene therapy might be a fundamental technique, creating a gene therapy for a different disease is really hard because human biology is really hard.
You assume the cost of new therapies is workable simply because it’s more efficient than existing.
In reality many existing therapies are all pushing the system into debt and unworkable (for example it overcharges the healthy in order to subsidize the ill).
The reality is $2 million price tag may be acceptable to a multi-millionaire but unworkable for a 40 year old who makes $50K/yr.
After certain age and cost level, the math just doesn’t work out. It’s tough, but once you realize you don’t have the natural right to free or subsidized healthcare, it’s easier to accept.
But due to insurance churn, you don’t want to be footing the bill for your competitor down the road. As an insurance manager, your unit of analysis is not healthcare system or society, but your quarterly bottom line.
Or for insurance companies to form an association that comes up with policies that would benefit all of them if they all did them, and then requires all member companies to implement them. Not sure exactly what carrot or stick they could use to ensure that any remaining insurance companies have an incentive to join the association rather than trying to free-ride off what they're doing, but one might be able to come up with something.
The page does not list enforcement mechanisms for cartels, and in fact says: "In general, cartel agreements are economically unstable in that there is an incentive for members to cheat by selling at below the agreed price or selling more than the production quotas set by the cartel (see also game theory). This has caused many cartels that attempt to set product prices to be unsuccessful in the long term. Empirical studies of 20th century cartels have determined that the mean duration of discovered cartels is from 5 to 8 years."
Come to think of it, the general idea is "If you, as an insurance company, foot the bill for these treatments with long-term benefits for your clients, this will cost $X, but save you $Y and other nearby insurance companies $Z in the future. Therefore, we the association will pay you $z < $Z to do it, and by assumption $Y+$Z > $X, so there should exist values of $z that make this profitable for both parties (anything between $X-$Y and $Z)." The carrot is the payment of $z.
In terms of whether this association could become a price-fixing cartel... It's probably easier to verify compliance when compliance consists of performing a positive behavior (i.e. paying healthcare providers to do certain treatments; whatever the details of the payment, the important thing is whether the treatment was performed) instead of a negative behavior (i.e. not selling extra product at a lower price on the side). It doesn't seem obvious that this would make price-fixing much easier than it currently is.
It’s Called “reinsurance” and it’s already implemented in many states for cases such as these (million dollar payouts) since post-ACA an insurer could go bankrupt on a single customer with a pre-existing condition.
That's what I previously understood to be the case, but the post I replied to suggested something different -- that states were getting in on the reinsurance game. That's what I object to.
Theoretically, it would be possible for states to do this responsibly in a manner that benefited everyone, but if I weigh the extent to which our system allows interested parties to pay for legislation against the extent to which the public is likely to make reinsurance rates a ballot issue, I can't help but put the probability of a responsible implementation at about 1-2% and the probability of "privatize the gains and socialize the losses" at 98-99%.
It's not possible a single insurer to go bankrupt due to a single expensive customer. State insurance commissioners wouldn't allow such a financially fragile insurance company to sell policies in the first place.
> Sounds like a great argument for Medicare for All, the NHS, or other nationalized systems.
There's a good chance that NICE won't be willing to fund these treatments at all. Which is in no way a criticism of them (QALY is the just the most sensible semi-objective thing to base these decisions on) - but is worth highlighting when you say "free healthcare for all".
It's only free for the healthcare considered to be good enough value for money.
At the end of the day, that's what the calculus comes down to. Many of these gene therapies are for rare diseases, but creating them is still extremely expensive. At some point, the cost of dedicating those societal resources to saving those lives is too high.
That's a hard thing to admit, so people look for a way around it. But at the end of the day somebody has to pay. If you tell the drug companies that the products are too expensive, and ask them to accept lower returns than comparable high-tech, high-risk, talent and capital-intensive industries, you're asking those companies and their shareholders to pay. (Or you're asking them to cross-subsidize those treatments with money from treatments that have a much larger number of patients.) People love that idea because it makes it seem like you're getting cheaper treatments for "free" but all you're doing is hiding the costs. There is a cost, it's now just hidden and unaccounted for. If you told Apple they could only charge $250 for an iPhone, what do you think would happen?
Let the drug companies charge what they want to charge, and let government-funded healthcare programs decide what they're willing to pay to save a particular life. That's the most transparent and ethical thing to do.
From a more general pricing perspective: how should you price your product versus the status quo? Is it really appealing if it's only 10% cheaper? For my SaaS I was aiming more at 50% cheaper. Am I leaving money on the table?
Yeah I really don't get enabling the outrageously expensive carrying of genetic diseases such as SMA, especially at a time where prenatal screening can be done.
The expectation I have is that these sky high prices will drive a boom not unlike the computer electronics boom of the 60's. When money of this amount is at stake, people are willing to do almost anything to get in on the action.
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.
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.
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
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
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.
I wouldn't say it has zero influence. Their assessments definitely impact the public perception of pricing in the US, so companies pay attention. But yes, it's not like NICE in the UK where the decisions have a direct impact on how much insurers pay for drugs.
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.
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.
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).
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.
I’m not that well versed in gene therapy, but for pharmaceuticals the calculus is as follows: It takes billions of dollars and decades for a new drug to be put on the market. In addition to the cost, there’s the risk of the FDA not approving it. Once approved, the drug can essentially be produced for free. The government gives the company the right to charge whatever they want for a set number of years until the patent expires (including much of the research time). After that period, competition is allowed in.
It seems clear to me that costs and profits need to come from somewhere. But I wonder if there is a better system than just making each pill super expensive for a long period of time.
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.
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
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.
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.
Vaccines are actually super unprofitable for Pharma companies, so this isn't a great model to emulate (although I agree with the general metaphor of gene therapy -> vaccines)
Pricing it like a vaccine entirely ignores the number of patients treated. Unlike vaccines, you'd never give gene therapy to most of the population. It all likelihood, you give gene therapy to a few thousand patients.
Hard to even break even if you're charging $100 and treating 2000 patients.
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?
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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[ 4.7 ms ] story [ 154 ms ] threadThey 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.
That being said, obviously we have to fund development somehow.
I suppose a trade secret would prevent circumventing IP law by heading to a more permissive jurisdiction and is potentially indefinite. But then again, if anyone ever successfully reverse engineered it (or it leaked) my understanding is you can't patent it in retrospect? So it seems like a huge risk to me.
From an ethical standpoint, I'm not seeing where it would be any worse than a patent (one that's actually enforced). Unless you're concerned about the possibility of the knowledge becoming lost to humanity? Or something else?
An aside: I wouldn't be optimistic about the usefulness of trade secrets on their own in the biomedical sciences. It can certainly be tedious to reverse engineer something, but my impression is that it's generally the IP laws that stop your potential competition.
Let's say we have a disease that kills 1000 people per year. Let's look at a 40 year period.
1. No cure is researched or found in 40 years. Total death count: 40,000.
2. For the first 10 years no cure is found. After 10 years a company comes along and creates a lifesaving cure, however it's expensive - only 500 people per year can afford it. The patent on it lasts 20 years. After 20 years another company creates a generic version of it that 990 people can afford. In the first 10 years 10,000 people die, in the following 20 years another 10,000 people die, in the last 10 years 100 people die. Total death count: 20,100.
3. No cure is found in the first 20 years, then a government funded research team finds a cure. A company picks it up and creates a generic, where 99% people can afford it. In the first 20 years 20,000 people die. In the latter 20 years 200 people die. Total death count: 20,200.
Being early matters in medicine. It's always easy to look at an expensive treatment and say that this should be much cheaper, but we usually don't consider that forcing investors out of healthcare means that less research will be done. This means fewer treatments and a longer time before a treatment is found.
4. Nobody makes any attempt to create a treatment, but after only six months a miracle occurs. Nobody dies and everybody is cured for no reason.
Not saying that there isn't any, but where is the evidence that a government funded research team would be slower than the privately funded one?
If the government invests $100 billion into medical research and private companies invest another $100 billion then we're probably getting more medical research done than if only the government invested $100 billion into medical research, and the private companies spent the $100 billion on making movies.
You might even argue that the money saved by not having a patent could be used to save even more lives.
There is only one detail I cannot understand. Why competition doesn't work? Why some new investors (who are not invested in drugs yet) do not invest in the research of new drug that heals all the diseases, to sell this drug for $1 -- they would destroy existing system, but they would get all the market at once. (Or in a smaller scale they might make a drug that treats some disease once and for all, and shrink not the pie overall, but some part of it).
This sounds great. We'd like to imagine that the companies would now expend all their energy towards developing new treatments, even ones that might not have been economically feasible before (think: the 'problem' of cure vs treat), and everybody would live happily ever after. Unfortunately, there's another way of looking at this. You just changed the company's goal away from market success and onto playing a game of min-maxing on government funding.
We have countless analogs to draw from here. Anytime a complex industry starts getting involved with government funding suddenly the entire game changes. It's not about producing anything, but instead about doing exactly what's necessary to keep, and maximize, the amount of funding received. And sure we'd like to imagine you could just create a million rules and regulations to try to ensure that this means exactly 'producing new amazing treatments' but actually doing that is not really practical. And, that's also ignoring the fact that these systems also rapidly lend themselves towards corruption:
'Well I tell you what Senator Pharmaceutical Commission Chair, we've been looking at building a new pharmaceutical research facility. And [your state] is looking right top notch. And you know what, voters will love those jobs we'll bring, and it'll even be a tax windfall in the longrun. The only thing that's stopping us from this is resources. Just something to keep in mind when you go draw up that next fiscal allotment. And ya know, you also might want to consider retirement. Once you leave office - we'd be mighty grateful for some of those great insights you have. We're always looking for consultants with the right sort of experience, if you know what I mean.'
It sucks. I'm with some others who say that we should try to improve our society so that nobody would have to make such a choice.
Clinics aren't subject to the same requirement and can legally turn indigent patients away.
The ethical thing to do is constructing a system that maximizes the amount of lifesaving medical care at minimum cost. Doing that requires acknowledging market forces. Scientists and engineers aren't any more altruistic than anyone else. These days the incoming classes at investment banks are full of physics, biology, and chemistry majors that could easily have gotten a PhD and went to go work for NIH. In the healthcare space, there is at least the potential for making a lot of money by doing a startup with the hopes of getting acquired by one of the big pharma companies. If you take that option away--if developing lifesaving medical care is a field that nets you at best a GS-scale government job--talent and capital are going to go develop dating apps instead.
Moreover a lot techniques for gene therapy are already in the literature. Moreover you have to document what it's doing or what your doing for approval (in-case of a procedure).
https://www.theguardian.com/science/2017/dec/24/josiah-zayne...
There is a big difference between injecting reagents into a single human, and doing actual medicine.
That's a bit of an understatement. The difference between doing CRISPR on a cell and a petri dish and doing it in a human is huge. That's why no one has done it yet.
And although gene therapy might be a fundamental technique, creating a gene therapy for a different disease is really hard because human biology is really hard.
In reality many existing therapies are all pushing the system into debt and unworkable (for example it overcharges the healthy in order to subsidize the ill).
The reality is $2 million price tag may be acceptable to a multi-millionaire but unworkable for a 40 year old who makes $50K/yr.
After certain age and cost level, the math just doesn’t work out. It’s tough, but once you realize you don’t have the natural right to free or subsidized healthcare, it’s easier to accept.
Come to think of it, the general idea is "If you, as an insurance company, foot the bill for these treatments with long-term benefits for your clients, this will cost $X, but save you $Y and other nearby insurance companies $Z in the future. Therefore, we the association will pay you $z < $Z to do it, and by assumption $Y+$Z > $X, so there should exist values of $z that make this profitable for both parties (anything between $X-$Y and $Z)." The carrot is the payment of $z.
In terms of whether this association could become a price-fixing cartel... It's probably easier to verify compliance when compliance consists of performing a positive behavior (i.e. paying healthcare providers to do certain treatments; whatever the details of the payment, the important thing is whether the treatment was performed) instead of a negative behavior (i.e. not selling extra product at a lower price on the side). It doesn't seem obvious that this would make price-fixing much easier than it currently is.
https://en.m.wikipedia.org/wiki/Reinsurance
Theoretically, it would be possible for states to do this responsibly in a manner that benefited everyone, but if I weigh the extent to which our system allows interested parties to pay for legislation against the extent to which the public is likely to make reinsurance rates a ballot issue, I can't help but put the probability of a responsible implementation at about 1-2% and the probability of "privatize the gains and socialize the losses" at 98-99%.
There's a good chance that NICE won't be willing to fund these treatments at all. Which is in no way a criticism of them (QALY is the just the most sensible semi-objective thing to base these decisions on) - but is worth highlighting when you say "free healthcare for all".
It's only free for the healthcare considered to be good enough value for money.
That's a hard thing to admit, so people look for a way around it. But at the end of the day somebody has to pay. If you tell the drug companies that the products are too expensive, and ask them to accept lower returns than comparable high-tech, high-risk, talent and capital-intensive industries, you're asking those companies and their shareholders to pay. (Or you're asking them to cross-subsidize those treatments with money from treatments that have a much larger number of patients.) People love that idea because it makes it seem like you're getting cheaper treatments for "free" but all you're doing is hiding the costs. There is a cost, it's now just hidden and unaccounted for. If you told Apple they could only charge $250 for an iPhone, what do you think would happen?
Let the drug companies charge what they want to charge, and let government-funded healthcare programs decide what they're willing to pay to save a particular life. That's the most transparent and ethical thing to do.
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.
It wouldn't affect much the cost of producing therapies that are tailored to individual genomes.
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_...
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.
It seems clear to me that costs and profits need to come from somewhere. But I wonder if there is a better system than just making each pill super expensive for a long period of time.
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.
https://www.nber.org/papers/w9833
Hard to even break even if you're charging $100 and treating 2000 patients.