BloombergBusinessweek |SoonerThanYouThink June 10, 2019Sincebirth,Sullivan’scarehascostmillionsof
dollars.He estimatesthat thedrug he usedfrom
Pfizer Inc., BeneFix, and a longer-lasting version
called Alprolixfrom SanofiSA, costanaverageof
about$300,000annually.Theyearheunderwenta knee
replacement,whichrequiredsubstantiallyhigherdoses
ofthedrugs,thebillssoaredtomorethan$1million.
Then,a yearago,Sullivanenrolledina clinicaltrial
fora genetherapyindevelopmentfromSparkand
Pfizer,andmostofhissymptomsdisappeared,asdid
hisroutinedrugcosts.“It’slife-altering,”hesays.“I
haven’thadtosticka needleinmyarmfora year.”
Sullivan, likeOmarion,didn’thavetopayforhis
experimental treatment.Oncethedozensof com-
inggenetherapiesareapprovedandonthemarket,
theymaywellbeunavailabletomostAmericans,even
thosewithinsurance,saysStevenPearson,founder
andpresidentofthenonprofitInstituteforClinicaland
EconomicReview,whichassessesthevalueofmedi-
cine.“Employerswillfeeltheycan’tcoverit,especially
smalleremployers,”hesays.“It’slikea freighttrainrun-
ningagainsta brickwall.”
Incountrieswithcentralizedhealthcoverage,such
astheU.K.,drugmakersdon’tselltheirproductsunless
thegovernmentagreestocoverthem.Inthe U.S.,
drugcompaniessometimesstepintohelpstruggling
patients,givingthemmedicationsforfreeorreduced
prices,butit’sunclearwhetherthiswillbethecasefor
allgenetherapies.“Aswestartgetting into diseases
with more people, like hemophilia and beta thalassemia,
access to care is going to be an issue,” says Harvard
medicine professor Jonathan Hoggatt.
Gene therapy developers including Novartis, Spark,
and Bluebird Bio Inc. are starting to pitch novel and
controversial payment plans. These include annuity
models that allow insurers to pay off the treatments
over time. So far, the programs aren’t broadly covered
by Medicare or Medicaid; developers must negotiate
them individually with insurers. “The way the payment
system is set up in the United States, we pay by epi-
sode of care, and we happen to be delivering a one-
time therapy,” says Spark’s Marrazzo. “Ultimately, I
think we should get paid a smaller amount, over time,
as long as it’s working. We should be standing behind
these products.”
Critics argue that longer-term payment plans could
just as easily lead to price escalation and abuse. “If we
just turn every single treatment into a home mortgage,
all we do is kick the can down the road,” Pearson says.
“Prices will be too high because they will think we can
pay for it later.”
For patients suffering from these kinds of rare dis-
eases, many of which generally prove fatal, there may
not be time to resolve all the questions of supply anddemand.Someacademicsarewillingtobuildgene
therapiestoorder,butthatmeanspatientsneedto
raisethemoneythemselves.AmberFreed,a former
equityanalystinColorado,istryingtoraise$1mil-
lion to cover the development costs of a treatment for
Maxwell, her 2-year-old son, who suffers from a rare,
newly discovered genetic disease. She’s $600,000 short,
and he has a year, maybe two, before the worst of the
symptoms, severe seizures, may cause permanent
damage. “His birthday was so bittersweet,” Freed says.
“Time is not on his side.”T
he pharmaceutical industry appears confident
that gene therapy’s market problems will sort
themselves out. The likes of Roche Holding AG and
Bristol-Myers Squibb Co. are paying billions or tens
ofbillionsofdollarstoacquirepromisingcompanies.
Novartis,too,gotaccesstoZolgensmathroughits
$8.7billion purchase of a tiny startup that, at the time,
had no products on the market.
Still, big hopes are being pinned on small studies
with few patients. Sarepta Therapeutics Inc. went
all-inon a therapyforDuchennemusculardystro-
phyafterit hadbeentriedononlyfourboys.“Forthe
next 24 months, we’ll be spending many hundreds of
millions of dollars to support this,” says CEO Doug
Ingram. “We’ll have to build more manufacturing
capacity in the next two years than all the gene ther-
apymanufacturingthatexistsintheworldtoday.”
Ingram saysit’s a moralimperative given that
400 boys in the U.S. and 3,000 around the world die
from the disease every year. Although the study
hasn’t yet been published, he says preliminary find-
ings for the first four patients are unprecedented, with
improvement at every time point and across every test.
“All the markers would lead one to believe these kids
are transformed,” he says.
At home in Indiana, where she lives with Omarion’s
father and his family, Simpson still takes many of the
sameprecautionsshedidwhenOmarionwassuffer-
ingfromSCID,includingwipingdownallhistoysdaily
towardoffgerms.“I’mstillveryparanoid,” she says.
“I’ll be really overprotective.” But she recognizes how
far they’ve come from only a few months ago, when
he was stuck in the isolation chamber where he took
his first stumbling steps. “He’s started to develop
really fast, because he can just crawl anywhere on
the ground and play with whatever,” she says.
His favorite activity is chasing a ball around a park
near their home. Again and again, he’ll throw it as far
as he can, then fast-crawl after it, without having to
worry about the germs in the grass or the dirt. <BW>For more on the future of health care, go to Bloomberg.com/prognosis52