Rare Disease Report

Struggling with the High Cost of Gene Therapy

MAY 10, 2016
Ruth J Hickman, MD and James Radke, PhD
Though no gene therapy for rare diseases is currently approved in the US, excitement is building about the potential of such a treatment. For many rare diseases, gene therapy represents a potential cure for conditions that currently have very limited or no treatment options, a cure that may not be obtainable through any other means. Not surprisingly, effective gene therapy treatments remain a dream and a goal for many in the rare disease community. However, the potential cost of such therapies may present significant obstacles to patients, even if such therapies are eventually developed successfully.

Gene therapy beginnings

The idea behind gene therapy is a simple one. Most commonly, DNA with a functional, therapeutic gene is used to counteract a malfunctioning gene leading to a genetic condition. The gene enters the cell via a viral vector designed to deliver the correct gene. The patient’s cells can then use this DNA to manufacture working copies of  whatever missing or malfunctioning protein was causing the symptoms of the disease. In theory, this sort of therapy could cure any number of conditions caused by a single mutated gene, among them, many rare diseases.
Though the idea is simple, in practice it has proved challenging to accomplish. Scientists first began testing gene therapies in the 1980s, but a series of safety issues in the 1990s set back development.
But that has changed--nearly 670 gene-therapy trials are now underway, 68 of which are currently in phase III trials. Most of the therapies currently in the pipeline are indicated for rare diseases like hemophilia, X-linked SCID, familial hypercholesterolemia, Leber’s congenital amaurosis, and adenoleukodystrophy. Some of these will be up for approval in the next year or two. At that point, advocates will have to grapple with another struggle: finding a way to get these potentially cost-prohibitive treatments to those who need them.

Gene therapy pricing

Glybera (alipogene tiparvovec) became the first gene therapy approved in the west when Europe approved it in 2012. The drug is designed to treat lipoprotein lipase deficiency (LPLD of familial chylomicronemia syndrome) by restoring LPL enzyme activity.

The drug’s price tag--about 1.4 million dollars--was shocking to many. For UniQure, the developer of Glybera, the investment has been a flop. It has only been paid for and used once since its introduction.
Later this year, Spark Therapeutics is submitting an application to the FDA for a gene therapy for Leber’s congenital amaurosis. The treatment is expected to cost around $500,000 per eye. With such prices, biotech companies hope to make money off their original investment, pay dividends to stakeholders, and reinvest in future therapies.
Another company, Bluebird bio, also has gene therapies in development but they are keeping very quiet about how much they plan to charge for the therapy.

Changing the pricing model

The best feature about gene therapy is that it can cure a patient with one injection or one series of injections. That feature is also a major problem from a financial perspective. That one injection has to cover the millions of dollars spent on drug development, clinical trials, etc.,  as well as provide the company with a profit so that they will have the money needed to develop more gene therapies. And if you consider the fact that orphan drugs are running in the $250 - $400K per year for a chronic ultra rare condition, what can a company charge for one injection. $2 million? $5 million?  And if that is the money needed to make a profit, will insurance companies be willing to pay that amount of money even though it may be less expensive – in the long term – than orphan drugs that are given over long periods of time and do not promise to ‘cure’ a patient like gene therapy can promise?

Many argue that the current system to develop, approve, and dispense drugs is not appropriate for gene therapy.
In a recent interview wtih MIT Technology Review, Morrie Ruffin, managing director of the Alliance for Regenerative Medicine noted that It is vital that we understand how these therapies will be paid for before we approve them. The challenge is that the current system of drug development and reimbursement “was not established with these types of products in mind,” Ruffin said.
“From a pure business, money-making perspective, it’s a challenge,” says Sven Kili, head of gene-therapy development at Glaxo. Glaxo got preliminary approval in Europe for a gene therapy treatment for SCID earlier this year. “It’s a single treatment that lasts indefinitely and patients don’t come back. And there aren’t many of them. It is not something that would make a venture capitalist jump with joy.”
Dr Jim Wilson is a physician-scientist at the University of Pennsylvania Perleman School of Medicine and a pioneer in gene therapy. In an interview with Newsworks, he said, “I call it the dirty little secret about the challenges of reimbursement and the lack of business model that with time, as we mature this field, is going to surface and become . . . a real problem.”
For companies, a single payment at the time of treatment is the simplest approach. But this might not be the best approach for patients. Others have proposed alternative funding models, in which annual payments could be made over a period of time based on the effectiveness of the treatment. But it is unclear how this would work practically, for example, if a patient’s insurance coverage changes. For the present, paying for these therapies is expected to occur in one large, upfront fee.

Making potential treatments available

Will these therapies even be accessible to those who need them? It is unclear how insurance coverage for such therapies might work, or whether they would qualify as “essential benefits” as specified by the Patient Protection and Affordable Care Act in the US.
It is worth noting that money should not of course be the only consideration in moving forward with these therapies. These therapies may may or may not save the healthcare system money in the end, but there are also broader societal and ethical issues at play. Some would argue that the benefits of potentially curative treatments for these crushing diseases should outweigh any considerations of cost. But practically speaking, money matters, both in motivating future therapy development and making sure those treatments are practically available to those who need them.
Meanwhile, many in the advocacy community who have been so focused on raising funds to make these treatments possible may have to take a new approach: raising funds to help patients access these new potential gene therapy treatments.

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