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How high a price for a cure

Citizens, watchdogs, and legislators again are homing in on drug developers and marketers for their high-priced products. As trade organizations and even some who disapprove of industry practices note, this negative impression evolved from the actions of a few, not the practices of the whole. Nonetheless, as sophisticated, complex, and yes, curative therapies emerge on the market, they will as expected, command steep prices. Payers, patients, providers, and society at large will feel compelled to assign value to these breakthrough, costly products, balanced with the pressure of access for patients who truly need and would benefit from the therapy.

 

In Europe, the manufacturer of one gene therapy priced at about a million dollars, found the market would not bear its price and withdrew it from availability.[1] No public outcry ensued because of the paucity of the patient population. However, that market blip is not stopping other gene and cell therapies from being developed for larger patient populations. Those treatments will enter the market with a high price, instantly facing intense scrutiny. While economies of scale may help alleviate some costs, the nature of gene therapy truly puts the personal in personalized medicine; thus the interventions will require a high level of customization for each patient (meaning price can decrease only a fraction).

 

Some groups like the Institute for Clinical and Economic Review (ICER), the American Society of Clinical Oncology (ASCO), along with the Pharmaceutical Research and Manufacturers Association (PhRMA) and the Biotechnology Innovation Organization (BIO) are looking at the role of value for emerging therapies. What remains unclear is how these analyses and frameworks feed payer and provider uptake of these innovations. As important is how patients can access and afford these products which could have a significant impact on their lives, reducing their dependence on institutions, large amounts of resources, and therapies with symptomatic relief.

 

These tough questions will continue to be debated, especially as therapies get closer to approval in the United States. LARA is following the debate and can help bring you up to speed on the issues so that as your advanced therapeutic technology approaches approval, your company can work through pricing dilemmas and policy questions to make the launch process more seamless.

 

 

 

[1] “Biotech pulls pioneering gene therapy due to no demand.” REUTERS, April 20, 2017.

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