The price of life (and drugs)

Developing of novel drugs is always a high-risk endeavor and success should result in a financial reward. However, what is an acceptable cost for the treatment of severe rare disorders?


Pekka Simula 24.06.2019

Spinal Muscular Atrophy, SMA, is a rare genetic disorder resulting in muscle weakness. It is so rare that most people hadn’t heard of SMA before the debates on the pricing of Spinraza, the first drug approved for the treatment of SMA in 2016. With a list price of $750,000 in the first year of treatment and $375,000 in consecutive years, many European countries argued that the price was unethically high.

First, to put this in some proportion: The most severe SMA, type 1, is diagnosed in small babies. Until the approval of Spinraza it was a death sentence. Those babies rarely reached their second birthday. Today, based on clinical studies, Spinraza could stop disease progression and in many cases even improve muscle strength. So it’s easy to understand the heated discussions on the pricing. What would I have done if our child had been diagnosed with type 1 SMA and then refused Spinraza because of the high price?

Three years later, it turns out the price wasn’t that high after all. Another drug, Zolgensma, was approved to treat SMA. A single dose is assumed sufficient for a life-long benefit as it addresses the root cause of the disease.

That single Zolgensma dose is priced at $2,125,000.

Again, let’s put this in proportion. Roughly one child in 10,000 is born with SMA. Roughly 10% of them have the most severe type 1 SMA. In a country of the size of Finland that means less than one type 1 SMA baby a year. Our healthcare system could definitely afford Zolgensma for that unfortunate child. How could it be denied?

But then: The majority of SMA cases are of types 2 and 3. While they are severe diseases they are not nearly as dramatic. Can the same prices be accepted and afforded? The parents of those children are very desperate too, having to fear that their child may never walk.

Politicians and decision-makers often avoid discussing the price of a life or QALY because “every life is priceless”. It is much more convenient to leave the debates on drug pricing and cost-effectiveness analyses for insurance companies, drug pricing boards, and the likes of NICE or ICER. However, while the European debates on the pricing of Spinraza may be considered as pretentious or narrow-minded, the more recent Zolgensma pricing has actually proven their point. The price of Spinraza was used as a justification for the even higher price for Zolgensma: It was argued that over the lifetime of the patient Zolgensma would be cheaper than Spinraza. Thus the very high price of Spinraza ended up justifying an even higher price for Zolgensma, even ahead of solid data on its long-term risk-benefit ratio. (Ok, let’s not forget that Zolgensma will be off-patent before its true long-time follow-up data are available.)

Obviously there has to be a limit. Justifying astronomical prices on astronomical prices isn’t sustainable; even the richest economies in the world couldn’t afford such prices in every imaginable rare indication. Keep in mind that SMA is one of more than 5,000 rare diseases.

Some decades ago the pharmaceutical industry largely ignored rare diseases due to a poor perceived risk/reward ratio. Consequently, orphan drug programs were successfully established to provide financial perks and benefits for drug development in rare diseases. However, I don’t think their intention was to get orphan drugs at literally any cost.

Developing of novel drugs is always a high-risk endeavor and success should result in a financial reward; otherwise no-one would invest in this business. But the authorities could maybe set some constraints on acceptable pricing of orphan drugs to counter-balance the benefits provided by the orphan drug programs.

Herantis Pharma develops drugs that are expected to improve the lives of patients and also to yield a favorable health-economic outcome. For instance our CDNF aims at stopping the progression of Parkinson’s disease. In the USA, such a treatment is estimated to save the society almost half a million dollars per patient.