The record $2.1 million price tag for Novartis AG’s gene therapy Zolgensma – a one-time treatment for a deadly childhood disease that was approved by the Food and Drug Administration on Friday – evokes two very different responses. Critics see out-of-control pricing behavior. Supporters say the sticker-shocked are ignoring the creation of a possible cure for a disease that kills children before their second birthday.
They’re both valid reactions. But we’re heading toward a point where spiraling prices on gene therapies threatens to hamper access or effectively ration usage by income or coverage quality. The problem isn’t just Zolgensma. It’s the dozens of other incoming gene therapies that will use this price as a reference point. Miracle cures don’t do much good if they aren’t accessible.
Just Getting Started
There’s an argument for premium pricing for gene therapies; for one, they could replace a lifetime of costly alternative treatments in one go. Zolgensma costs $425,000 annualized over five years. That’s a discount relative to prolonged use of the current non-curative standard of care, Biogen Inc.’s Spinraza.
But pharma has a thumb on the scale. Drug prices have skyrocketed, particularly for the rare conditions targeted by many gene therapies. Charging several times an already inflated price isn’t as much of a deal. The next generation of gene therapies will be even more effective. How much will they cost? It’s easy to see a path from more approvals at higher prices to an increase in barriers to access, even if gene therapies deliver long-term savings.
Providers of private health insurers don’t have a robust incentive to think ahead; they’re typically focused on annual budgets and are judged by quarterly earnings, while Americans swap coverage so frequently that they may never see the promised overall savings from these treatments filter down to the cost of their own plans.