President Trump has said he plans to issue an executive order to lower what the United States government would pay for drugs to no more than “whatever the lowest nation’s price is.” The proposal is designed to end what he has called “global freeloading,” whereby Americans pay more for drugs than residents of other countries.
The executive order announcement follows an earlier proposal by the Trump administration to decrease the price of physician-administered therapies by tying them to an international price index so their prices will not exceed those charged in other countries.
These proposals, like others that would cut the costs of drugs, are clearly popular. But if implemented they could have disastrous unintended consequences for existing or future high-value personalized cell-based therapies, gene therapies, and targeted medicines that are reshaping the discovery, development, and delivery of health care.
Backdoor price controls, like those proposed or suggested by the administration, will likely discourage the pharmaceutical industry from making investments in personalized and targeted therapies that address the root causes of diseases rather than merely treating their symptoms. They would also slow the discovery of treatments for diseases that affect small numbers of patients for whom there are no effective medicines by making it even more difficult for pharmaceutical companies to get returns on their ongoing investments in therapies aimed at subpopulations of patients. Some of these medicines have unprecedented upfront costs to develop and deliver, but they represent breakthroughs that can spare patients from a lifetime of ongoing symptoms and costly hospitalizations.
Consider Zolgensma (onasemnogene abeparvovec-xioi), which was approved by the FDA in May 2019 as a single-dose, curative treatment for spinal muscular atrophy (SMA), a rare and debilitating neuromuscular disorder that affects fewer than 25,000 people in the United States. Novartis (NVS), the company that developed the drug, defends Zolgensma’s $2.125 million price by noting that patients living with SMA regularly generate costs of more than $5 million over 10 years — while still suffering from this horrible disease.
According to one recent study, the pharmaceutical industry is developing nearly 300 treatments that, like Zolgensma, prompt a patient’s own cells to address the biological causes of a disease, facilitating a long-term treatment response. The industry is also committed to developing targeted therapies that can be taken regularly to counteract the effects of genetic mutations for certain cancer patients and those with rare diseases.
Recent developments in Europe demonstrate that these investments will be at risk if health care decision-makers do not put individual patients at the center of their considerations or if they abdicate their responsibility to make decisions based on what is best for Americans and allow other nations to set the price of drugs.
In 2015, for example, the FDA approved Orkambi (lumacaftor/ivacaftor), a drug made by Vertex (VRTX) Pharmaceuticals for treating cystic fibrosis in patients 12 years and older with two copies of a specific gene mutation. Three years later, this lifesaving drug was approved for treating younger children as well. The United Kingdom’s National Institute of Health and Care Excellence (NICE), whose mission is to get the best bargain even if it means denying British citizens access to innovative medicines it deems as overpriced, has embroiled the country in a bitter dispute over the cost of Orkambi.
By applying a methodology for assessing the value of drugs that was developed in the days of population-based medicine rather than those of precision medicine, NICE determined that this targeted treatment is not worth what Vertex wants to charge for it. That judgment, if replicated, will likely deter future investment in innovative medicines that require enormous capital, long lead times, and a willingness to tolerate failure rates of 90% or more.
Even worse, in addition to the detrimental effects of these proposals on the development of innovative therapies, they would lock patients and health systems into a future in which physicians rely on imprecise, one-size-fits-all daily maintenance medications that fail to help many patients at a time when science is beginning to help us better appreciate human heterogeneity and new technologies, such as next-generation sequencing, are ushering us into a new era that promises better outcomes for patients and increased efficiencies for the health system generally.
The Trump administration’s cost-cutting proposals, which fail to consider drug prices in the context of overall health care costs, arrive as the global pharmaceutical industry is deeply invested in creating innovative therapies that carry higher price tags, at least in part because the companies that make them must recoup research and development costs from fewer prescriptions administered to smaller patient populations. These smaller populations are defined by specific biological characteristics known to drive disease or predict responses to therapy. The pharmaceutical industry’s attention to these molecular markers lets physicians target more effective treatments to patients who are almost certain to benefit from them, improving patient care and making the health system more efficient.
Recent developments in the U.S. Congress are no less concerning than the Trump administration’s proposed price controls. Also aimed at decreasing drug costs across the board without reference to their value to patients and the health care system, some of these ideas, such as House Speaker Nancy Pelosi’s latest drug pricing plan to arbitrate the list prices of 250 drugs, display no discernible concern for the future.
Personalized medicine points to a new future for health care that moves away from treatment protocols based on what has been proven to work for the highest percentage of patients with a given disease in favor of analyzing each individual’s specific biological characteristics. In so doing, this precision approach is designed to increase the value of every dollar spent on health care by making upfront investments to understand everything that can be learned about each patient before prescribing a therapy that can deliver the longest-lasting effect.
Instead of blindly reducing list prices for all drugs, we should instead seek solutions that assess every treatment in the context of its value to individual patients and the downstream savings they may facilitate elsewhere.
Edward Abrahams is the president of the Personalized Medicine Coalition, a nonprofit education and advocacy organization in Washington.