Policy 4 min read

The Cost of a Cure

Sticker shock fuels uncertainty over access to gene therapies even among insured.

By Greg Uyeno featured image Kaipungyai / Getty Images

In the second half of 2017, the Food and Drug Administration approved gene therapies for the first time, greenlighting three new drugs. This year, a wide range of other gene therapies are expected to be up for approval. Some of these treatments may involve altering an inherited mutation, while others may change the function of the body’s immune cells to help fight disease.

These new gene therapies could be a boon for patients — many promise to be life-changing treatments for rare conditions — but their high upfront costs will force tough decisions from healthcare insurers and providers. The initially-reported price tags have heightened concerns over affordability, and who exactly will benefit from the medical breakthroughs.

“There are definitely concerns about who gets the drug,” says Gwen Darien, of the National Patient Advocate Foundation, and chair of the Community Engagement in Genomics Working Group of the National Human Genome Research Institute.

The FDA-approved therapies and their sticker prices are: Kymriah, for acute lymphoblastic leukemia (ALL), at $475,000; Yescarta, for diffuse large B-cell lymphoma (DLBCL), at $373,000; and Luxturna, which treats blindness associated with mutations of the RPE65 gene, at $850,000.

They are among the most expensive drugs on the market, and those prices have raised eyebrows and hackles. The cost of Luxturna, for example, has been heavily criticized despite plans to offer rebates to payers if the drug meets a threshold for ineffectiveness, and a cap on patients’ out-of-pocket expenses at the in-network standard.

Experts say that a high cost share, or co-pay, on gene therapies could restrict access to life-saving treatments — even for insured patients. For example, at a rate of 20 percent, patients might still be responsible for hundreds of thousands of dollars. “It’s not just about covering the insurance, but making sure that people who have insurance still have access to the drugs,” says Darien.

Ultimately, the cost of treatment and its domino effect will depend largely upon decisions by payers and negotiations with manufacturers. Higher costs could be passed on to patients receiving the new treatments, distributed among health plan members through higher premiums, or some combination of the two. If premiums aren’t raised, insurers may decide to cut coverage in other areas to cover the expense of gene therapies, which could cost millions across an entire healthcare network even if only 1 in 100,000 patients are eligible.

In many cases, parties will be weighing the risks, costs, and benefits of a lifetime curative gene therapy against existing care. The challenge “is not new, but it might be of a totally different magnitude here,” says Christine Y. Lu, an associate professor of population medicine at Harvard Medical School and the Harvard Pilgrim Health Care Institute. (The research institute is affiliated with, but independent of Harvard Pilgrim Health Care, one of the providers that has reached a rebate agreement on Luxturna.)

Lu stresses that affordability will matter not just for individuals, but for healthcare systems and society at large. Businesses insuring their workers, and tax payers paying into Medicare may have opinions on where the money goes. Discussions of healthcare priorities can be difficult, but “given the magnitude [of the cost],” says Lu, “if we’re not upfront about it, we will be regretting it.”

One complication is that patients could receive treatment and later change their insurance provider. Payers might view this as the loss of a long-term investment in a member’s health.

The analysis of risks and benefits is further hampered by the newness of the drugs, which lack information about long-term effectiveness or side effects. And because most of the diseases treated with gene therapy are relatively rare, the studies that evaluated safety and efficacy are naturally smaller and less reliable. “People are questioning, ‘Why am I paying this price? For what outcome?’” says Lu. “It’s a fair question for anyone to be asking.”

Beyond financial cost, administration of the new therapies may also limit their accessibility. Gene therapies take many forms, and not all of them are familiar pills, injections, or infusions. For example, administration of Luxturna requires a minor surgical procedure involving injections into each eye. If certain equipment or trained personnel are required, it might also stress geographic access.

“When you look at the cost of therapy, you need to look at long-term costs. Not just money, but opportunity cost, delayed effects, the impact on a family’s income or ability to work,” says Darien. “We tend to be a little too reductive. Cost is not just money.”

Many cost decisions have yet to be made, even for the approved drugs. So at least for now, concerns about who will be able to access gene therapy and who will pay for it have the same air of uncertainty about them as the potential long-term benefits of the therapies themselves. “For all of these domains, we need to move from speculation to evidence,” says Darien.