Traditionally in medicine, when you are talking about small-molecule drugs you are right. But, increasingly that is not true with the new cell and gene therapies… there are two price drivers: production costs, and what pricing model optimizes revenue/profits. You also have to think about the type of therapeutic it becomes - is it something you “take” or “get done” every year, of once every 10 years, or just once.
It would be interesting to hear from one of those mathematicians who create the seat pricing algorithms for the airline industry to analyze what pricing strategies would maximize revenue and profits worldwide based on different cost scenarios…
High production costs are limiting patient access to cell and gene therapies, according to researchers who say optimizing manufacturing methods and increasing capacity industry-wide would help. Cell and gene therapies are expensive. Analysis by the Institute for Clinical and Economic Review (ICER) suggests the average cost of a gene therapy is between $1 million and $2 million per dose.
Similarly, while cell therapy prices differ more widely depending on the indication and the type of product, the average cost per treatment is $1 million, according to the ICER.
This editorial in Nature seems relevant, and a similar issue could be something we could face in the longevity field. It will be different because longevity gene or cell therapy could have a vast market (compared to the rare genetic diseases discussed below), but even with a vast market, the cost and production scaling could remain an issue:
Gene therapies should be for all
Are healthcare systems prepared to deal with cost and accessibility of gene therapies on a global scale?
More than 200 phase 2 and 3 gene therapy trials are currently underway, which could translate into up to 40 new products’ being approved for clinical use in the next decade, and the potential eligibility of 1.09 million patients for this therapeutic modality in the next 15 years. The availability of more gene therapy products will bring profound changes to the treatment landscape of many rare genetic diseases, which will offer for the first time potentially curative options for patients. Healthcare systems worldwide have to start preparing now to cope with the challenge of ensuring that all patients, not just a select few with financial means and privileged access to technology, can benefit from these innovative therapies.
Cost is at the center of the gene therapy accessibility problem. In many countries, drug prices are regulated and subject to existing laws; however, for gene therapies, pricing remains largely unregulated and is decided on a case-by-case basis, often concentrating on a single upfront payment. When determining the price, drug companies consider development costs, the specific characteristics of the disease and the related expenses, including hospitalizations and missed productivity, that can potentially be prevented by decreasing the disease burden. In the case of gene therapies, prices are also affected by lack of competition, with a limited number of companies developing gene therapies for rare diseases, and by the fact that often only a small number of patients can benefit from a specific treatment, a situation in which profits from a small number of doses need to offset the entire drug-development and manufacturing costs.
https://www.nature.com/articles/s41591-021-01481-9
