Two medicines designed to treat spinal muscular atrophy, a rare and often fatal genetic disease affecting muscle strength and movement, would have to carry much lower price tags than the manufacturers prefer in order to be considered cost effective, according to an updated analysis. And the estimates are likely to intensify ongoing debate over the cost of new treatments, especially for highly select patient populations.
One is a forthcoming gene therapy from Novartis (NVS) that the company has indicated may be priced at $4 million to $5 million. But at that price, the treatment fails to provide sufficient value based on an economic benchmark known as QALY, or quality-of-life years, which measures both the quantity and quality of life generated by providing a treatment or some other health care intervention.
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As near as I can tell, the ICER report didn’t take into account 1) R&D or production costs; 2) failure rate of early attempts at designing and producing the drug; or 3) the fact that only 3 out of 10 drugs ever recover their R&D. Drug companies price their drugs with these factors in mind. This is probably why they declined to share their R&D costs with ICER. If successful drugs aren’t able to be priced with the failures preceding their approval and the inability for most new drugs to recover R&D costs, we will have no new drugs.