Cost of a Stem Cell Therapy? An Estimated $900,000

What is the likely cost of a freshly minted stem cell therapy? Close to $900,000. That's at least by one current estimate.

In the United States, such calculations are rare. Researchers and biotech executives shy away from discussing in public such daunting figures.

The figure emerged last week, however, in news from Japan about groundbreaking research to treat macular degeneration with reprogrammed adult stem cells.

While stem cell insiders are not keen on discussing $900,000 therapies -- at least their cost -- the public, however, is deeply interested. Development of expensive therapies is also likely to play a role in the future of California's $3 billion stem cell agency, which expects to run out of cash in 2020. Voters may look askance at publicly financed therapies that appear to be out of reach.

Exorbitant health care costs are on the minds of many. Forty-seven percent of the public said in 2016 that cost and access are the nation's most urgent health care problems, according to a Gallup Poll. Of all the nearly 4,300 items published on the California Stem Cell Report over the last 12 years, the most widely read article deals with the cost of stem cell treatments.

As of this morning, the 2013 article had recorded 21,963 page views, a standard way of measuring readership on web sites. Another related document chalked up 27,699 views on Scribd, where it was also published by the California Stem Cell Report. The figures are roughly four and five times higher than other relatively well-read pieces.

Readers do not give reasons for choosing the articles. But it is likely that their pocketbooks and hopes of affordable therapies are driving their interest.

Affordability was a big issue in the creation of the stem cell agency via a ballot initiative in 2004, Proposition 71. The agency, formally known as the California Institute for Regenerative Medicine (CIRM), has not devoted any significant attention to the matter in the last few years.

But if the agency wants to secure additional public or even private funding, it will need to make the case that its work is more than just another entry in the medical arms race.

Just yesterday, OncLive,  an oncology news site, carried a report on the skyrocketing expense of cancer drugs alone, which cost the nation $16 billion annually in 2010 and jumped to $38 billion in 2015. As for individual cancer patients, they are looking at costs of more than $150,000 a year for drugs, figures that have generated a ruckus in the cancer treatment community.

Drug costs are a small part of the total health care bill for country. But they are a litmus test for policy makers and the public. The costs are relatively straight forward compared to some other health care measures. But they are readily understandable by most families, who usually have one member or more involved in prescription purchases.

 As efforts to repeal-and-replace the Affordable Care Act gain increasing attention over the next year, the public is likely to focus even more on the costs of treatments and drugs, whether it is a $19 aspirin or a $900,000 stem cell therapy.

The "good" news, however, last week out of Japan was that the $900,000 cost of the stem cell macular degeneration treatment could be reduced to below $200,000 as the kinks are worked out and the treatment becomes more common -- if it clears its clinical trials.

As for California, CIRM  has pumped $125 million into research dealing with blindness, including macular degeneration which afflicts 1.7 million Americans. Nearly one million Americans are blind from all causes and another 2.4 million suffer significant visual impairment. More information on the state research can be found here. A CIRM video on vision issues is below.

Cost of a Stem Cell Therapy? An Estimated $512,000

(Editor's note: Updated figures on costs can be found in this 2017 item.)

The likely costs of potential stem cell therapies and cures receive almost no attention in the media as well as publicly from scientists and the biotech firms.

Usually any public discussion is obliquely framed in the context of “reimbursement,” as if industry is owed something instead of making a business decision about what will make a profit. Euphemisms and jargon cloak unpleasant realities such as astronomical patient costs. But what reimbursement really involves are, in fact, pricing decisions and profit margins along with lobbying campaigns for inclusion of therapies in normal coverage of health insurance and Medicare. 

And today a singular figure – $512,000 for one stem cell treatment – appeared in the Wall Street Journal . The story by Kosaku Narioka and Phred Dvorak dealt with what would be the first-ever human study of a treatment that uses reprogrammed adult stem cells.

They reported that the study received preliminary approval on Wednesday from a key panel of the Japan Health Ministry. The treatment involves a form of age-related macular degeneration, which has also been targeted by the California stem cell agency with different approaches.

Buried deep in the Wall Street Journal article, with little other discussion, was this sentence:

“One eventual obstacle, even if tests go well, could be cost: (Masayuki) Yamato (of Tokyo Women's Medical University) says initial estimates for the treatment run around ¥50 million ($512,000) per person."

The subject of costs for potential stem cell treatments has rattled around in the background for years without much deep public discussion. One reason is that high costs of treatments are controversial and can trigger emotional debate. Another reason is that it is very early in the therapy development process and estimates are not likely to be entirely reliable.

A few years ago, however, the California stem cell agency commissioned a study involving costs of stem cell therapies. The UC Berkeley report said,

“The cost impact of the therapy is likely to be high, because of a therapy’s high cost per patient, and the potentially large number of individuals who might benefit from the therapy. This expense would put additional stress on the Medicare and Medicaid budgets, cause private insurance health premiums to increase, and create an incentive for private plans to avoid covering individuals eligible for a therapy.”

The findings did not seem to be exactly welcomed. The agency sat on the 2009 study for seven months until it was uncovered by the California Stem Cell Report in April 2010. Then the agency was careful to say that the study did not reflect the view of CIRM management or board leadership.

Their wariness of being out in front on the issue could be well-advised. The pharmaceutical industry received some unpleasant attention this spring when more than 100 influential cancer specialists from more than 15 countries publicly denounced the cost of cancer drugs that exceed more than $100,000 a year.

Nonetheless pricing is critical to both patient accessibility and therapy development. If companies cannot make a profit on a possible therapy, it is virtually certain not to appear in the marketplace.

While the subject remains in the background, it does not mean there is a lack of interest. The copy of the Berkeley stem cell cost study that was posted online by the California Stem Cell Report has been read 11,701 times since it was made available in April 2010 on scribd.com.

(For a 2015 look at costs for non-government approved procedures, see this item.)

A copy of the Berkeley study can be found below.

Stem Cell Therapy Costs by DavidJensen