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Medicine The Almighty Buck Science

Price Tag On Gene Therapy For Rare Form of Blindness: $850K (apnews.com) 218

A first-of-its kind genetic treatment for blindness will cost $850,000, less than the $1 million price tag that had been expected, but still among the most expensive medicines in the world. Several readers have shared an Associated Press report: Spark Therapeutics said Wednesday it decided on the lower price for Luxturna (Lux-turn-a) after hearing concerns from health insurers about their ability to cover the injectable treatment. Consternation over skyrocketing drug prices, especially in the U.S., has led to intense scrutiny from patients, Congress, insurers and hospitals. "We wanted to balance the value and the affordability concerns with a responsible price that would ensure access to patients," said CEO Jeffrey Marrazzo, in an interview with The Associated Press. Luxturna is still significantly more expensive than nearly every other medicine on the global market, including two other gene therapies approved earlier last year in the U.S. Approved last month, Luxturna, is the nation's first gene therapy for an inherited disease. It can improve the vision of those with a rare form of blindness that is estimated to affect just a few thousand people in the U.S. Luxturna is an injection -- one for each eye -- that replaces a defective gene in the retina, tissue at the back of the eye that converts light into electric signals that produce vision. The therapy will cost $425,000 per injection.

Price Tag On Gene Therapy For Rare Form of Blindness: $850K

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  • the basic research that underpinned this (e.g. all the hard work) was done at public University on the public dime.
    • Re:Let me guess (Score:4, Interesting)

      by imgod2u ( 812837 ) on Wednesday January 03, 2018 @01:14PM (#55856819) Homepage

      That's kinda like saying the Turing machine was invented at a public university on public dime. So why is Intel charging $350 for a processor.

      • Re:Let me guess (Score:4, Insightful)

        by stabiesoft ( 733417 ) on Wednesday January 03, 2018 @01:22PM (#55856897) Homepage

        If they were charging 350/eye I don't think anyone would be complaining. The problem is the drug industry has been raping the US lately. Have HEP-C, 85 grand, and then there was shekal(sp?) who raised priced on old drugs just because he could. Epi-pens also spiked and had no changes to justify the price surge. And then we have the drug industry that has totally abandoned antibiotics. Something almost all of us need from time to time. Just not profitable.

        • by Okian Warrior ( 537106 ) on Wednesday January 03, 2018 @01:45PM (#55857065) Homepage Journal

          So how do we fix this?

          We have readers who are experts on economics, law, medicine, and game theory(*). What's the solution to this?

          There are rare diseases that affect only a handful of people in the US, and there are tons of medical procedures and devices which could be used but aren't.

          Two anecdotes: a) I talked to a doctor at Berman-Gund (Boston) who claims to have a cure for a rare inherited disease that affects only 450 people in the US, but has given up because it's too expensive to develop(**). b) My dentist (heavily involved in research at Tufts) mentioned that there's lots of new diagnostic methods available, but insurance companies won't allow them because they're afraid they will turn up undiscovered conditions that are expensive to treat. Essentially, it's cheaper (in the actuarial sense) to let things go until they are untreatable so that the patient dies quickly.

          A) What are the characteristics of a system that fixes these problems, and

          B) How do we get from where we are to that system?

          (*) For a situation with an incentive for better health.
          (**) Meaning: With only 450 potential patients, there is no potential profit and no one is willing to pay for development, trials, and certification

          • by Orne ( 144925 )

            My armchair solution is risk exposure mitigation.

            Drug testing are insanely expensive because if you screw something up, you will be sued to oblivion. So, these niche products never make it to production because the consumers (limited size) cannot absorb that cost. Solution: Create a class of drug licenses that waive the Phase 3 human trial requirements, and allow the patients to sign off on a document that absolves the drug company from liability.

            And, we should extend the "treatment of last resort" laws.

          • by zifn4b ( 1040588 )
            Answer: you whine and pontificate on slashdot
          • I think we just need to accept the way it is.. resources are not infinite and our current system directs capital towards what is most valuable. In the case of medical research, it seems to be working as the most common diseases receive heavy funding while smaller ones like this receive little. Sounds harsh, but again it's really just the most efficient allocation of scarce resources.
          • by AHuxley ( 892839 )
            Look at how other nations do healthcare, insurance and citizenship.
            Dont accept non citizens into any national health care system. Non citizens have to take out full private cover during their stay.
            Give a national health care card to all citizens after proving the are a citizen.
            Take a percentage of every persons wage to cover that cost.
            For that citizens get medical care and access to a rationed range of low cost medications. Generic, older medications that a nation can do a bulk deal for.
            Place all
        • I just got a medical sticker shock yesterday. I have some hearing loss due to tinnitus and a constant (and very annoying) ringing in my right ear. The audiologist told me that a hearing aid might help me. There was a 60% chance of it working, but the ringing is so bad that I'm willing to do just about anything. Then, she began to explain how the insurance companies buy the hearing aids in bulk to reduce the price. This should have been my cue that sticker shock was approaching. $1,100. For the base model. A

          • Up until the recent consumer push for wireless earbuds and bluetooth devices, hearing aids were a small market with small R&D budgets, proportionately. They still beat most bluetooth devices on longevity and size though. The question is, have they been gouging prices or are they reasonable for their particular market and the features they offer.

            As for your idea, depends on what kind of patent portfolios you'd have to work around most likely, as the hearing aid mfgs. aren't going to just go away. Also

            • Or google the Etymotic Bean. It's definitely not a hearing aid (cos that would need approval). It just fits in your ear and helps you hear better. I assume we are only a year or two away from discrete in-ear devices that you tune with an app on your phone via bluetooth. Then maybe the ridiculous hearing aid price gouging will stop.
          • Hearing aids are overpriced. But it can make a big difference to get ones properly tuned for you specific hearing issue. Hearing aids that amplify across the entire range can damage your hearing further/faster than properly tuned ones. So there is value in doing it right. After going cheap for many years, my dad finally spend $3K+ on a pair and he said they were much better than anything he'd had before.

            In the case of tinnitus management, I don't think there is as much risk in trying other approaches. It
          • Most hearing aids are designed primarily around analog technology. The reason is latency -- digital audio in general, and bluetooth to a HUGE extent -- has WAY more latency than most lower-order analog designs. Latency screws up your ability to "locate" the source of a sound.

            The cruel irony of digital audio is that the number of microseconds a digital filter needs to pre-buffer a sample is usually at least double the number of microseconds of lag that a comparable analog filter would introduce (often, 4x o

          • Honestly, given how prevalent earbuds are, I don't see why someone can't just modify an earbud to replicate hearing aids at a fraction of the price.

            Because FDA approval for a medical device is prohibitively expensive for something that can be done with a software upgrade to a non-medical device? Or are you unaware that you can be shutdown by the government for trying to sell non-FDA approved medical hardware?

            Admittedly, this was necessary at one time, to prevent fraudsters from promising the world in ex

        • shekal raised prices on old drugs to fund new drug development that is already saving lives. The drug industry charges such outrageous prices because they give away 99% of their stock to the poor, and because most other countries either ignore their patents or pay them cents on the dollar. They fund the research for the entire world, so yes they pay outrageous amounts of money, but until another country can create a system where they can research new cures and treatments while selling them for pocket change

      • The $350 is the cost of the R&D of incremental upgrade covering the failure of designs over the past decade. The cost of revamping its manufacturing to print these chips, parts labor, share holder..... Then keeping a tidy profit per chip.

        The previous work done had already paid for it self, so it isn't part of the chip price. Hence why we can get a relatively fast chip at a consumer level price.

        The problem with rare drugs for rare problems. Is they cannot sell a lot of them to make up their R&D p

        • by imgod2u ( 812837 )

          Except in this case, CRISPR is a versatile method that can be used for a whole wide range of things. It's just that this drug is one of the first to use it.

          So think of it as the Intel 4004 or some such.

    • What, you mean you don't value eyesight at approximately 17 years of median income?

      • by Megol ( 3135005 )

        They may but that doesn't mean they can afford it.

        • by jedidiah ( 1196 )

          > They may but that doesn't mean they can afford it.

          So you have no idea how health care actually works.

          NO ONE can afford most of the expensive stuff. That's what insurance is for. If you're unlucky, that's also what socialized medicine is for.

          Nobody pays the cash price for procedures like this. Procedures with official price tags like this are pretty common too actually.

          Freaking out about Epipens is so amateur hour...

      • What, you mean you don't value eyesight at approximately 17 years of median income?

        There better be a guarantee with that if I'm paying for that out of my own pocket. But as there are likely quite a few blind people on disability, let's look at that instead. Disability probably pays out about half of the median income so we are now up to 34 years. If we are talking a person who is currently 40, then even if you can cure them, the break even point is age 64 where they then presumably can retire at age 65 so from an actuary standpoint, there is no incentive to cure them at that point as t

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      University research is literally just that ... the bare basics.

      Thinking that's all that goes into drug production completely neglects to think about financing, building a production plant, clinical trials, government approval, zoning, regulation, packaging, distribution, etc, etc....

      It's naive to think that because some phd in a university got something working using a benchtop setup and a few generations of lab mice, that we can just jump right on in to production batches that can be sold and administered

    • by raymorris ( 2726007 ) on Wednesday January 03, 2018 @01:36PM (#55856997) Journal

      You'd be guessing wrong, more or less. The company has been developing this drug since October 2007, ten years ago. Their 2016 annual report shows they spend about $86 million / year on internal R&D, mostly for this drug in recent years. That's "e.g. all the hard work".

      They also booked $10 million in external R&D for this drug in 2016, but that number is going to get bigger. External R&D is the company paying the university (Penn) for the research the school did over ten years ago. Now that the drug has been approved and it's going on the market, the company will have to pay the school another $3.8 million plus about 5% royalty on all sales. 1,000 patients at $850,000 is $850 million. 5% of that is $42 million. So the school will get about $42 million royalty, plus the $3.8 million base, plus the millions they've already received. Figure the school may have spent $200,00-$500,000 on the initial research, they are doing extremely well. Something like $300K spent on research will net the school about $60 million.

      http://ir.sparktx.com/static-f... [sparktx.com]

      • by suutar ( 1860506 ) on Wednesday January 03, 2018 @01:51PM (#55857115)

        This is very informative, thank you. Given those figures, 850k looks depressingly like breakeven for the company (if that 86mil/yr was all for this, it would take them (860mil+10mil+3.8mil)/0.95 = 919.79 mil revenue to break even, or about 920k per for 1k patients). I'm sure they have some profit baked in to the figure, but not as egregious as the summary headline sounds by itself.

        • Don't forget however, that every dollar they spend in figuring out this sort of treatment can be recouped later when the technology is perfected and they get FDA permission to start treating other more common diseases. This is proof of concept and easing the idea of messing with our DNA into a world that's still dodgy over GMO foods.
        • The company may well lose money. The $86 million internal R&D was for 2016 only. They've been working on this treatment for ten years. I know they also had $10 million external R&D for this treatment in 2016; I don't exactly know how much of the $86 million was for this, but it looks like they had four "promising" ones that would account for most of it. So maybe $25 million internal and $10 million external on this treatment on 2016.

          How much was spent on *this* one doesn't much matter, though, bec

        • by ranton ( 36917 )

          This is very informative, thank you. Given those figures, 850k looks depressingly like breakeven for the company (if that 86mil/yr was all for this, it would take them (860mil+10mil+3.8mil)/0.95 = 919.79 mil revenue to break even, or about 920k per for 1k patients). I'm sure they have some profit baked in to the figure, but not as egregious as the summary headline sounds by itself.

          Don't forget that only about 1 in 10 drugs pass all three phases of clinical trials, so for companies to get funding they would need to be reasonably sure they could return at least 5-10x the cost of development. So if it takes a billion dollars to break even, they would probably be expecting in the ballpark of $5-$10 billion in profits from this drug (and from licensing of patents related to the research). Too much less than that and it wouldn't make sense to fund the drug research in the first place.

    • by DRJlaw ( 946416 )

      the basic research that underpinned this (e.g. all the hard work) was done at public University on the public dime.

      So the not-hard-work includes the Phase I, II, and III clinical trials required to gain approval of a drug that genetically modifies a human being, as well as the mountain of documentation required for marketing approval and the manufacturing process?

      So done "at public University" means done at a private university [wikipedia.org] and private hospital [wikipedia.org]? Ones that are licensing the treatment [pennmedicine.org] in exchange for roy

  • by BlueCoder ( 223005 ) on Wednesday January 03, 2018 @01:16PM (#55856839)

    A medicine to me is a chemical. This is a genetic treatment. A procedure. Cellular surgery. But not a medicine.

    • by gnick ( 1211984 )

      A medicine to me is a chemical.

      Which is why we call everyone who practices medicine for a living, "chemist".

      • Which is why we call everyone who practices medicine for a living, "chemist".

        Actually, in much of the world a "chemist" is a person that dispenses or sells medicine. It's almost as if "medicine" and "chemical" are synonymous.

        A person that practices medicine, and usually prescribes the chemicals a chemist would sell, is a physician or surgeon.

        I do wish that Americans would learn some proper English. I say this as an American. A "doctor" is someone with a doctoral degree, not necessarily a doctorate in medicine. I don't go to a "doctor" for my medicine, I go to a pharmacist or che

        • by gnick ( 1211984 )

          ...I say this as an American...I don't go to a "doctor" for my medicine, I go to a pharmacist or chemist.

          If you're an American and you're getting your medicine from a chemist, you're on meth.

          A "doctor" is someone with a doctoral degree, not necessarily a doctorate in medicine.

          You're not wrong, but context makes distinction very simple. E.g. If somebody shouts, "Is there a doctor in the house?!" You don't respond, "Yes! I'm a geologist!" If you tell your boss, "I don't feel well; I'm going to the doctor," he'll know you mean a doctor of medicine.

    • by Kjella ( 173770 )

      A medicine to me is a chemical. This is a genetic treatment. A procedure. Cellular surgery. But not a medicine.

      If you can get a pill or injection or lotion for it I think most people will call it a medicine no matter what it does. I mean what makes it a medicine and not a placebo or toxin is the effect, not the means. It's probably the most natural way to think of it for the company too, it's something they can manufacture very far away and sell. The procedure-delivery business is very different.

    • you defined a drug ( which are sometimes synonymous with medicine) . However , Medicine generally is a broader term, covering all practices which make people healthier.
      http://www.dictionary.com/brow... [dictionary.com]

  • Shocking... (Score:5, Interesting)

    by DeplorableCodeMonkey ( 4828467 ) on Wednesday January 03, 2018 @01:23PM (#55856905)

    A gene therapy for a disease that has a pool of potential patients in the thousands costs nearly seven figures? Absolutely shocking! If we can put a man on the moon, surely we can defeat the law of supply and demand!

    But ironically, if it works, it makes far more sense than a lot of the emotion-driven spending we do via public healthcare programs and private insurance such as spend hundreds of thousands on treating quite possibly terminal disease in people past their gender's life expectancy.

    How about another example? We treat funding cancers that mainly impact retirement age women as the highest cancer priorities, but people doing childhood cancer treatment practically have to sell drugs and do bake sales to get any real funding. Fuck you 6 year old sally, we can't have your parent's 65 year old neighbor die of breast cancer because she's a voter and you're not.

    • by EvilSS ( 557649 )

      If we can put a man on the moon, surely we can defeat the law of supply and demand!

      Sure, just increase demand and you can lower the cost to the individual. Maybe we can develop a gene therapy that give the condition to healthy people then cure them. Boom, cost savings!

    • Not only that, look at the top ten leading causes of death for men. We have in order from highest rate to tenth, heart disease, cancer, unintentional injuries, chronic lower respiratory illness, stroke, diabetes, suicide, Alzheimer's disease, influenza and pneumonia, chronic liver disease.

      I expect things like diabetes and heart disease is the result of an unhealthy diet, and this shows highly in women too. What doesn't make the top ten for women? Suicide.

      What about "unintentional injuries" which ranks th

    • by AmiMoJo ( 196126 )

      This is a general problem in many democracies. Younger people don't vote as much as older ones, so get screwed.

  • There used to be this idea of a 'fair' price, but one of my greatest criticisms of the Republican way of thinking is that a 'fair price' is the same as 'the maximum the market will allow'.

    I think a better measure would be something like ( and I suspect these number can be determined fairly well).
    I've kicked around some kind of consumer reporting law that would at least make real data available on a given product.
    Something like

    ( Total number of expected units sold * ( cost of physical materials involved +

    • I know the typical objection is ( but what about all the failed products they also research , but there is no reason you can't build that into the cost by make cost of research = total research cost / successful number of products to get an average cost for research across the company.

      So, you save for your last badly written sentence a suggestion that the companies look at their entire body of costs, revenue, opportunity costs, losses, overhead, future prospects, number of prospective users, and then take that all into account when figuring out what a very advanced procedure for a tiny number of patients actually costs if they want to stay in business and continue to invest in more R&D and the billions of dollars they have to spend in government compliance costs. Which is exactly wh

      • I think you entirely misread my statements , if not misinterpreted my point.

        1st I didn't says they should 'have to ' do something to stay in business
        .
        I implied ( although admittedly did not outright stated ) any large company that can't figure out weather or not they are able to make a profit on a given product isn't going to be in business long. So if you think the management of the company hasn't already done that kind of math I'm suggesting they make public you are very likely mistaken.

        2nd my mu

        • I implied ( although admittedly did not outright stated ) any large company that can't figure out weather or not they are able to make a profit on a given product isn't going to be in business long.

          Which, again, suggests that you really don't understand any of this at all. Of COURSE they, especially pharmaceutical companies, don't and cannot know if a given area of research is going to be a winner or a multi-billion-dollar loss. They can't know that. It's the very nature of that line of work. And it's why they have to be involved in many, many such projects at any given time, and make very solid profits on those that can make it through the very long, incredibly expensive process of getting something

    • Virtually every new drug, device, or treatment will eventually have a class-action lawsuit that will cost the company billions. Gotta factor that into the equation too. And the class action may be for minor effects, such as the one currently in vogue for a breast-cancer treatment that caused permanent hair loss or for slightly increased risk of suffering from the thing treatment was supposed to support (increased risk of depression among users of anti-depressant drugs).

    • by jedidiah ( 1196 )

      While you are fixating on "fairness" you are neglecting the fact that nobody is a charity. You don't work for free. Why do you expect anyone else to.

      ANY activity needs to yield a good return on investment or no one will bother. Ventures that are high risk or require a large up front investment will require a better potential upside.

      While you're whining about "fairness" you're undercutting the incentives that will cause useful work to get done. That means YOU are putting lives at risk. You are undermining al

      • I didn't say I expected anyone to work for free. The whole article is about price and at least implied discussion fairness. I'm only attempting to get people to consider and quantify what they consider fair. It is possible the $850,000 treatment is barely breaking even for the company , in which case no one has any right to complain. A much more interesting question is when does making a profit, become , making a profit by the abuse of others. A classic case is something like Gas when a hurricane is i

    • For a treatment like this, which has just been approved, and furthermore is the first treatment of its kind to ever become available, I think it'd be "fair" to sell it, initially, at such a huge price. A fair transaction, to me, is one where both parties benefit, and nobody on the sidelines dies as an externality.

      If they can get 20 millionaires to opt for the treatment at close to a million a piece, that's almost 20 million in development costs recouped. The millionaires are essentially forced to put thei
    • There used to be this idea of a 'fair' price, but one of my greatest criticisms of the Republican way of thinking is that a 'fair price' is the same as 'the maximum the market will allow'.

      I'd really like to see this solved too, but placing blame on one side won't do it nor is it accurate. The public, both D and R, knows that drug companies have bought both D and R politicians off. Both parties are bought off. If not, then why didn't Obamacare deal with drug companies in any meaningful way? The D party had the power but not the will. They talk a good game about helping the people but when you actually look at what they do they have little appetite for the hard work - just like the R part

  • by Joe_Dragon ( 2206452 ) on Wednesday January 03, 2018 @01:44PM (#55857057)

    change master price? what is the real price for this aka the cost that the health insurance will cover?

  • by SlaveToTheGrind ( 546262 ) on Wednesday January 03, 2018 @02:00PM (#55857171)

    And all we can find to do is bitch about the price? Maslow is indeed a harsh mistress.

    This is amazing stuff, folks. If you want more of it, leave the profit motive in place. If you want less of it, do the opposite.

    • the scientists don't really care who pays them. They're doing the research because they love it. We only need the profit motive in place because we want it there.
      • the scientists don't really care who pays them.

        Hey, it's funny -- I was just reading an article [slashdot.org] that explained how the government-funded NSA is bleeding talent because they can make a lot more in the private sector. And there was this dude named rsilvergun who said [slashdot.org]:

        these guys can clear $500k/yr working for Wallstreet. It's no wonder they don't want to settle for $140k/yr working for Uncle Sam.

        I know, I know... consistency is the hobgoblin of little minds. But still.

  • Regardless of the arguments for or against Big Pharma, Socialized Health Care etc. etc. somebody is going to pay.

    So, let's look at the equation:

    Cost of being blind:

    - Limited job opportunities.

    - Need for 'translation' of reading materials, screens etc. etc.

    - Depression (a very real factor)

    - Danger while traveling/navigating

    With vision:

    - Significant potential for increased income.

    - Minimal need of additional social resources.

    - Increased safety while traveling/navigating

    Net result: Increase ability

  • by flink ( 18449 ) on Wednesday January 03, 2018 @02:24PM (#55857399)

    I wouldn't be surprised if even at $850k, the cost of this treatment is less than a lifetime of assistive support for blindness. Hopefully those that qualify for this can get it covered.

  • "We wanted to balance the value and the affordability concerns with a responsible price that would ensure access to patients," said CEO Jeffrey Marrazzo

    That's comedy gold, right there!

    Unless, of course, you happen to have this form of blindness without being a multimillionaire. Then, it's just an insult.

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