Four members of the Rare Collective trekked out to San Francisco for the J.P. Morgan Healthcare Conference. David Lapidus and Doug Paul discuss what we learned…
Doug, I know that you have a longstanding interest in pricing strategies for gene therapies. In this area, what were people discussing at the conference?
I heard a lot of talk about “gene therapy prices,” but not a lot of subtlety. We’re still at a stage where many people don’t perceive how gene therapy prices will be profoundly influenced by their specific markets. In that sense, they’re like orphan drugs used to be: once upon a time, they were all lumped together, but now we differentiate between oncology, hemophilia, ultra-orphans, reformulations, and others.
What factors will differentiate gene therapies from each other when it comes to price?
The factors are not that different from other markets—you just have to remember that they apply to gene therapy, too. For example, will your gene therapy face competition? Is the competing product any good? Is it administered as inpatient or outpatient procedure?
A really interesting question would be, is your competition another gene therapy? For some diseases, we already know that the gene therapy segment will be competitive.
What’s special about a market where gene therapies go head-to-head?
We’re already seeing the use of a strategy that doesn’t often come up for small molecules or biologics. I think of it as “sandbox versus lifeline.” If a gene therapy is commercialized by a large pharma company, they may view it as a “sandbox” where they can play around and get to know the technology and markets. They may be using it to test the waters with payors.
By contrast, a small company’s gene therapy might be their “lifeline,” and they may need to price it accordingly. This is really important if that small company will face competition from another gene therapy that is priced for “sandbox.”
Some clients have expressed their concern regarding Strimvelis, GSK’s gene therapy for ADA-SCID. The European price is about $660,000 for a course of therapy—and GSK will refund the money if a patient doesn’t meet clinical milestones. So, the price of Strimvelis is a lot lower than Glybera’s original million-dollar price. And it’s well below the lifetime cost of chronic therapy for many ultra-orphan drugs. For some of those ultra-orphans, even in Europe, a single year of therapy can cost more than the entire price of Strimvelis. GSK even said they’re not expecting to make their money back in the ADA-SCID market. It seems this is a “sandbox” situation. A smaller company may not have that luxury.
That’s why I cringe a little when people talk about the “price of gene therapies.” These are unique therapies operating in very different markets across very different payer systems. In the end, gene-therapy pricing will be at least as complex and situation-specific as other therapies.