Innovation vs Monetization: The Curative Therapy Conundrum

Innovation vs Monetization: The Curative Therapy Conundrum

Jun 07, 2021PAO-06-21-NI-03

Curative therapies perhaps represent the ultimate “holy grail” of medicine. The world has greatly benefitted from medical advances in traditional therapeutics — such as vaccines and antibiotics — many of which, through comprehensive global efforts, have eradicated fatal conditions that have long plagued humanity. The past 50 years has also marked significant declines in cardiovascular mortality rates and improvements in cancer outcomes,1 due in large part to a paradigm shift that has seen doctors and health organizations invest heavily in wellness and disease-prevention education. There has also been an influx of companies and products that promote healthier lifestyles, and the combination of these factors has increased life expectancies in developed countries around the world.1 Despite the push for healthier living, only a very small percentage of the population rigidly adheres to best practices for diet, exercise, and limiting or avoiding exposure to unhealthy substances, so there will always be self-inflicted diseases that need to be cured — and many other diseases are either genetic or the product of circumstances that are out of anyone’s control.

Conspiracy theories abound alleging that pharmaceutical companies are withholding cures in order to continue profiting from drugs that simply treat symptoms, but the reality is that, while many curative therapies have made great strides, and, in some cases, have already been approved or are very close — particularly advanced modalities like cell and gene therapy — we have yet to see the types of revolutionary breakthroughs that can effectively end some of the world’s most deadly conditions.1 Additionally, given that many curative therapies are personalized, precision medicines with layers of regulatory and logistical challenges throughout the supply chain, the costs of such treatments present obstacles to pharmaceutical companies, insurance companies, and patients alike — creating a reality where basic economic feasibility is one of the biggest barriers, not greed. Despite financial and efficacy challenges, there is a disruptive shift brewing that could reshape the entire landscape of the healthcare ecosystem, where patients whose conditions were previously managed through ongoing, long-term medication may be cured through specific courses of treatment.2

Curative Therapies Defined

A curative therapy is a time-limited treatment that curtails the symptoms of a disease through permanent or semi-permanent correction of the underlying condition.2 The three archetypes of curative therapies are biology-modifying drugs that target a particular mechanism that contributes to or is responsible for the underlying disease; gene therapies that address underlying causes of a disease by correcting missing or mutated genes; and genetic reengineering of cells, such as stem cell treatments.2 The number or curative treatments in clinical trials is steadily increasing, and approximately 5% of all registered, active studies are potentially curative in nature.2 To date, the U.S. Food and Drug Administration (FDA) has only approved 20 cell and gene therapy products,3 but the new product pipeline is robust.  There are approximately 1,200 experimental therapies in clinical trials and more than half of them in phase II, indicating a likely significant increase in curative therapies going to market over the next 10 years.2 Many of these are gene and cell therapies that target diseases such as cancer, musculoskeletal disorders, and neurodegenerative diseases.4

The Cost of Doing Business

Curative treatments have the potential to lower the overall cost and resource burdens that diseases bear on healthcare systems, as they eliminate the need for long-term chronic care. However, the upfront cost variability for curative therapies makes it difficult for analysts to accurately forecast and budget, which is critical for healthcare systems that are under continuous cost pressure.2

Sales and upfront cost profiles of novel, curative treatments will have an immense impact on payers and providers.2 Successfully administering curative therapies at scale will require new models for payment and reimbursement to make them affordable. Some state Medicaid programs and private health insurers have restricted access to curative therapies for patients owing to cost pressures, resulting in warnings from federal officials and lawsuits from patients.2 While payers understand that administering curative therapies will lead to future savings, the immediate fiscal impact places an enormous budget strain on insurers and payers.

Take sickle cell disease, for example — it Is estimated that individuals suffering from sickle cell will incur $1 million in healthcare costs by the age of 45.7 Depending on how long they live, those costs will continue to rise throughout the remainder of their lives. On the other hand, a curative therapy to treat sickle cell may also cost $1 million per patient, but those costs would be incurred all at once rather than spread over the life of a patient. In this hypothetical example, with an estimated 70,000 sickle cell patients in the United States, it would cost $70 billion to administer therapies that could cure every patient. While this is less than what it would cost to collectively treat these patients over the course of their respective lives, it is an enormous upfront bill for payers and insurers to collectively incur all at once. To further complicate matters, the cost savings of treating an infant or small child with a curative therapy may make more financial sense than providing the same therapy to an older adult if strictly evaluating from a cost–benefit perspective, potentially causing an ethical dilemma for insurers as well.

On the development and manufacturing side, the revenue models for curative treatments are radically different than those for existing drugs.2 Traditionally, new therapies tend to provide a modest, incremental revenue lift when they are initially introduced, which gradually increases and stabilizes until patent expiration; revenue is predictable, as is demand. Conversely, curative therapies, given their one-off or limited administration, have a contrasting financial trajectory. Peak sales occur more immediately after they go to market, yielding higher early returns than traditional therapies, but diminishing much more quickly, as populations of eligible patients can be treated and cured in shorter time spans.2 Once demand has been satisfied, revenue streams taper off, making it difficult for pharmaceutical companies to accurately predict profit and losses before going to market.2

Additional cost and pricing challenges exist due to the fact that some potential cures — particularly for rare diseases — are investigated in clinical trials with small patient populations.5 Smaller sample sizes create more uncertainty about a treatment’s safety and efficacy, as short-term, tightly controlled trial settings with carefully selected patients make it more difficult to ascertain whether a “cure” observed in a trial will result in permanent, complete elimination of a disease in sick populations at large.5 These factors create challenges in valuing treatment benefits — so much so that the Institute for Clinical and Economic Review (ICER) has developed a separate value framework for single or short-term transformative therapies, which sets standards for fair pricing, long-term value, short-term affordability, comparative clinical effectiveness, incremental cost-effectiveness, potential budget impact, and contextual considerations.6

Curative Therapies in Action: Cell and Gene Therapy

The progression of diseases resulting from genetic alterations can be stopped and cured if the affected cells or tissues can overcome the genetic failure, but the methodologies for successfully discovering efficacious treatments are highly dependent upon the characteristics of the disease—and, by extension, the genes or cells that are being targeted.8 In vivo therapy delivers a therapeutic vector in the form of DNA, RNA, or a virus, while ex vivo therapy introduces genetically modified cells or tissues.8 Market-approved treatments and most ongoing trials rely on the addition of a genetic element to the cells, including the necessary sequences for expression.8 Coded as RNA or DNA, the gene transfer happens via chemical or physical techniques with highly variable efficiency and safety profiles.8

It is vitally important for researchers to understand the pathogenesis of the target disease to appropriately design a gene therapy.8 For example, a blood disease can be treated with a relatively small number of self-renewing hematopoietic stem cells, but postmitotic cells, such as neurons, usually require a direct delivery of a therapeutic agent to a large proportion of them.8 In addition to understanding the cell and tissue pathogenesis of the disease, it is essential to also understand the molecular consequence of the disease mutation. Recessive diseases are typically caused by loss-of-function or null mutations and can potentially be cured by introducing a healthy copy of the gene into the cells.8 Conversely, if the pathogenicity is triggered by dominant-negative gene products, gene or mRNA supplementation may not be sufficient.8

Perhaps among the most promising and innovative curative gene technologies is clustered regularly interspaced short palindromic repeats (CRISPR)-based gene editing. CRISPR leverages the protein Cas9 to act like a pair of molecular scissors capable of cutting strands of DNA at an exact location, allowing existing genes to be removed and/or new ones added in living cells.9 Beyond its potential to cure diseases spanning cancer, blood disorders, blindness, HIV, high cholesterol, cystic fibrosis, muscular dystrophy, and Huntington’s disease — to name a few — it also has the potential to reduce time and costs typically associated with other gene-editing technologies.10

Wrapping Up and Looking Forward

Despite a myriad of fiscal barriers and challenges that have yet to be overcome, the exciting possibilities surrounding curative therapies have researchers working toward cures for a host of currently uncurable diseases. Annual sales estimates project about 15% year-over-year growth for cell therapies and nearly 30% for gene therapies.11 Beyond cost concerns, there are challenges in manufacturing infrastructure. Service companies are somewhat flummoxed by the newness of the cell and gene therapy field, finding themselves in a paradoxical position of working to establish standard protocols for research and manufacturing while simultaneously trying to innovate in an uncharted space. Moreover, the demand for services currently outpaces supply — both from a research and manufacturing standpoint and from a lack of educated, fully trained workforces.11 Competition for talent is fierce, as drug discovery companies cannot as easily outsource manufacturing to CDMOs in the same manner as traditional therapeutics.11

Many experts predict a rise in the number of curative therapies on the market over the next 20 years. As scientific breakthroughs and technological innovation continue to increase at exponential rates, it stands to reason that the benefits of administering curative therapies will outweigh the costs, and principal stakeholders will be incentivized to find ways to make the numbers and logistics work. It is a disruptive, game-changing proposition, but the win-win-win scenario of patients being able to afford care to end their debilitating conditions, pharmaceutical companies finding a path toward profitability, and healthcare systems increasing long-term stability is enough to motivate all parties to collaboratively solve this complex puzzle.

References 

  1. Husereau, Don and Shelby Reed. “Guide to Understanding Curative Therapies.” Science Direct. 1 Jun. 2019. Web.
  2. Wylie, Craig; Rebecka Wadman, Thomas Unger, et al. “Transforming Healthcare—How Curative Therapies will Disrupt the Market.” Arthur D Little. 2019. Web.
  3. “Approved Cellular and Gene Therapy Products.” U.S. Food and Drug Administration. Accessed on 28 Apr. 2020. Web.
  4. Yang, Tom, Sonal Shah, and Christine Chang. “The Future of Pharma: Reimagining Traditional Business Models in 2040.” Deloitte. 23 Mar. 2020. Web.
  5. Shafrin, Jason. “How to Value Curative Therapies.” Journal of Clinical Pathways. 8 Oct. 2019. Web.
  6. “2020-2023 Value Assessment Framework.” Institute for Clinical and Economic Review. 23 Oct. 2020. Web.
  7. Cassidy, Bill. “How Will We Pay for the Coming Generation of Potentially Curative Gene Therapies?” Stat News. 12 Jun. 2019. Web.
  8. Maldonado, Rocio, Sami Jalil, and Kirmo Wartiovaara. “Curative Gene Therapies for Rare Diseases.” Springer Nature. 15 Aug. 2020. Web.
  9. Vidyasagar, Aparna. “What is CRISPR?” Live Science, Future US Inc. 18 Apr. 2018. Web.
  10. Khatri, Minesh. “What is CRISPR?” WebMD. 14 Oct. 2019. Web.
  11. Mullin, Rick. “Cell and Gene Therapy: The Next Frontier in Pharmaceutical Services.” Chemical & Engineering News. 18 Apr. 2021. Web.