High price of gene therapy drug adds to costs debate

Drugmakers often like to describe their medicines as groundbreaking, but one of the few to truly merit this adjective is Glybera, a treatment for a rare genetic disorder that was launched late last year.

Not only was it the first of an important new category of drugs - known as gene therapies - to be approved in Europe, but it also set a fresh record for the world's most expensive medicine.

Glybera, which fights a blood-clogging condition called lipoprotein lipase deficiency (LPLD), costs about €780,000 a patient. It is made by UniQure, a small Dutch biotech company whose chief executive, Jorn Aldag, admits the price tag sounds "enormous".

The sky-high price has made it a test case in the growing debate over the cost of drugs, as advances in medical science, combined with growing demand from an ageing population to place increasing strain on health systems around the world.

Mr Aldag says the price is justified not just by the high development costs but also by the value it offers to patients and health systems. Unlike existing treatments, which must be taken for a lifetime, one course of Glybera provides a permanent cure for LPLD.

"One-time treatments mean you have to recoup all your investment in one go," says Mr Aldag. "If you compare it with the lifetime costs of care that it is saving, the price is very reasonable, you might even say low."

Similar arguments were made by Gilead Sciences of the US to defend the $84,000 price of a 12-week course of its breakthrough hepatitis-C medicine, Sovaldi. Gilead said that, by providing a cure, the drug would save the greater long-term costs of hospitalisation, surgery and liver transplants that sometimes result from the disease.

This failed to convince Gilead's many critics, including some US insurers who have waged a successful campaign to drive down the price.

Such disputes seem certain to increase as the pharmaceuticals industry gradually shifts its focus from one-size-fits-all drugs to more targeted treatments.

Whereas traditional blockbusters such as statins and beta-blockers could make big profits at a moderate price because of their wide uptake, many modern drugs are aimed at much smaller patient groups with rare diseases or subtypes of broader conditions.

In the case of Glybera, there are only about 150-200 patients across Europe thought to be eligible for the drug. This means UniQure not only has to make a return on its investment through a one-off course of treatment, it must also do so from a tiny number of patients. The result is a price of €41,000 per vial, with the average patient needing 19 vials.

Many similar gene and cell therapies are in development, aiming to repair or replace defective genes, cells or tissue. Mr Aldag acknowledges this poses a huge economic challenge. "If we get more one-time treatments priced at this kind of level, we are going to see a spike in healthcare costs that will be difficult for health systems to support."

The answer, he says, is for annuity-style pricing models that spread the cost over longer periods. Payments could be linked to performance, so that companies are only paid if their drugs work. "We will see people become more creative about how to spread cost and share risk," says Mr Aldag. "Some people are not ready today, but they will be soon because there will be no choice."

Industry executives and many policy makers agree that pricing reform should be part of a broader change of approach by drugmakers, regulators and health systems. The traditional model has involved companies spending hundreds of millions of dollars, pushing drugs through a development and clinical trial process that can last a decade or more.

This leaves companies under pressure to sell the maximum possible volume at the maximum possible price with little regard for how effective the medicine proves to be for patients.

Experiments are under way on both sides of the Atlantic with fast-track regulatory approaches that allow earlier access to patients once a drug's safety has been proven. Companies can then work with regulators, health providers and insurers to gather data demonstrating the effectiveness of their medicines - and identify precisely which patients benefit from them. Volker Ronicke, a healthcare specialist at PwC in Munich, says this should lead to pricing based on outcomes in real patients rather than only on the results of clinical trials. "Pharma is moving from being paid for volume to being paid for value," he says.

Deepak Khanna, head of oncology in Europe for Merck & Co, says his company is ready to experiment with new models as it rolls out its skin cancer drug pembrolizumab, also known as Keytruda, which is priced at $12,500 per patient per month in the US. He points to early access schemes in the UK and France that are allowing pembrolizumab to reach patients even before it has been approved by European regulators.

Mr Khanna says: "Earlier access leads to earlier dialogue with regulators and governments to help them understand the value of the drug."

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