In a rare occurrence that the biotech industry wants to see more of, another gene therapy has been approved by the United States Food and Drug Administration (FDA). Sarepta Therapeutics’ asset for Duchenne Muscular Dystrophy (DMD), SRP-9001, has been granted accelerated approval to treat children with DMD who are either 4 or 5 years old. But how much will it cost?

Although it sounds like an unreasonably small target market, that is just the nature of diseases that gene therapies often target – rare genetic disorders that have so far proved difficult to treat. Clinical trials for gene therapies have very specific endpoints that are often custom and result in miniscule portions of the population that are able to receive the treatment upon approval. This, combined with complex manufacturing methods, are significant contributing factors towards the astronomical costs of gene therapies.

CSL recently had their hemophilia B gene therapy, Hemgenix, approved by the FDA – and it comes with a whopping US$3.5 million price tag per dose. Now classed as the most expensive drug in the world, patients who are currently using factor IX prophylaxis therapy or have serious hemorrhage or spontaneous bleeding episodes can access the therapy.

One of the challenges in developing a standalone gene therapy for rare diseases is having to manage the interactions between the standard-of-care treatment and the gene therapy, because withholding standard of care in the early phases of disease would be unethical – even if there is not a certain cure available. These interactions are carefully considered when designing endpoints and collecting data during the trial. 

Seeing the merit in what at a glance could appear to be exorbitant price tags is a notion that healthcare systems around the world are going to be forced to grapple with over the coming years. In 2021, there were more than 200 phase two and three gene therapy trials underway across the globe, which could result in upwards of 40 new products being approved for clinical use that would be targeted at an estimated 1.09 million patients. 

CSL estimates that hemophilia B patients, of which there are only around 6,000 in the US, can end up costing the healthcare system over US$20 million throughout their lifetimes – so the US$3.5 million price tag is justified. The Boston Institute for Clinical and Economic Review came in with a similar figure, saying it would be fairly priced at upwards of US$2.9 million.

While a lot of the usual considerations involved in pricing a drug, such as development costs, specific characteristics of the disease and related expenses, including hospitalisations and missed productivity. However, in the case of gene therapies, the lack of competition is also a strong contributing factor – and it’s a commercial advantage that biotech companies have available to them after many years of R&D.

Improving access to gene therapies is to a certain extent a social responsibility, but the input of regulators and governments in determining their pricing is a delicate balancing act that hasn’t quite been perfected yet. As more hit the market over coming years, it will be interesting to analyse the mechanisms behind the pricing structures.

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