Saturday, October 10, 2015

LA Times: California's Stem Cell Agency and Rising Concerns About Drug Costs

Bloomberg News describes this $1 million gene therapy
as the world's most expensive medicine
CIRM's affordability role
Risk-reward calculations
Burden on industry and CIRM

The Los Angeles Times has a Sunday readership of 2.4 million, and tomorrow they will be seeing this headline.
“Sky-high price of new stem cell therapies is a growing concern”
The article under the headline has much to do with California’s stem cell agency, which was founded on the promise that it would reduce health care costs, among other things, by as much as $18 billion.

The piece, available online last night, was written by Pulitzer Prize-winning columnist Michael Hiltzik. He noted that the agency is engaged in two, phase three clinical trials, the last step before a therapy is approved for widespread use.  

Hiltzik, author of the recently published book, “Big Science,”  wrote,
“If successful, they'll be firsts for the program, which is formally known as the California Institute for Regenerative Medicine. But they may also put CIRM smack in the middle of a burgeoning debate over how to ensure access for all patients to life-enhancing or life-saving cures.” 
Hiltzik pointed to stem cell and other advanced biologic treatments now reaching the global market that cost as much $1 million. One of those therapies was developed by Osiris Therapeutics when the current CEO of CIRM, Randy Mills, was the CEO of Osiris. The product, Prochymal, is being offered in Canada for $200,000 for a full treatment.

Hiltzik wrote that Mills “argues that CIRM's duty is to nurture therapies that can't be developed under conventional pharmaceutical business models and therefore may not yield profits like conventional drugs.”

Hiltzik continued,
“'If there was a risk-reward profile that was so attractive’ for such products, (Mills) says, ‘CIRM wouldn't have to exist.’ The public should have ‘an expectation of some return, but not of some great return,’ he says. 
“Mills argues that the public's concerns about drug pricing often may be misplaced, especially for treatments that reduce or eliminate lifelong treatment of chronic diseases. ‘In general, cell therapy may be more expensive to deliver,’ he says. ‘But if it's curative, that almost doesn't matter.’"
“He also cautions against allowing the political debate over drug pricing to distract from CIRM's ‘primary mission, which has been to bring cures to patients suffering from unmet medical needs.’ That explains the CIRM board's past resistance to the imposition of more stringent price regulation or higher revenue-sharing requirements. ‘We should be funding those things that, without our funding, wouldn't exist.’" 
Hiltzik concluded, 
“Still, public outrage over high drug prices isn't likely to ebb any time soon, and may only intensify as cutting-edge therapies reach the market at stratospheric prices. The burden will be on the biotech industry and its backers, including CIRM, to show taxpayers and patients that the price of treatment corresponds to the cost of research and development, rather than reflecting merely what the market will bear.”
(For more on the stem cell agency and affordability, see here and here.)
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1 comment:

  1. Anonymous9:05 AM

    Appropriately, the goal set was to reduce overall healthcare costs not just drug costs. For instance, if a drug costs $100,000 but eliminates hospital and other chronic care costs of $200,000 than the drug is a pretty good bargain. It is important to recognize that the overall cost of pharmaceutical products makes up only 12.9% of healthcare costs (OCED, 2007). Without pharmaceutical intervention, overall healthcare costs coupled with lost productivity (due to increased morbidity and mortality) would be much higher. This is not to say that we shouldn't be concerned about high drug costs but we need view the issue in the proper perspective.