Gene Therapy and Its Impact on Economic and Healthcare Spending

By Valeria Orta

Gene therapy represents the greatest hopes and the greatest challenges to modern medicine. On one hand, it could afford to save millions of people with a single dose costing the same as a house. Gene therapy is used to modify or manipulate the expression of a gene’s meaning. It is used to treat or cure genetic diseases, by replacing genes that have harmful expressions and affect how our bodies behave. The treatment can inactivate malfunctioning genes, and introduce new or modified genetic code into the body (FDA, 2018). This raises the essential question: Can we afford to save our lives?

Like most new high-tech innovations and technologies, the cost of these therapies is quite pricey. For example, Luxturna® a gene therapy used for Leber's congenital amaurosis, a variant of inherited retinal disease, costs approximately 425,000 dollars per eye to administer (Heem Wong, 2021). Not to mention, Zolgensma®, a gene therapy for spinal muscular atrophy, which costs around 2.1 million dollars, or what has been named one of the most expensive drugs ever. (Heem Wong, 2021). Putting that into perspective, the average U.S. annual household income is around 80,610 dollars (USCB, 2023). Zolgensma® costs around twenty-six times more than the annual household income, making it difficult for the average American to afford the treatment. 

With an estimated 1.09 million patients receiving gene therapies between January 2020 and December 2034 (Heem Wong, 2021), numerous questions are raised about how people are going to afford this. However, it is important to note that gene therapy is quite difficult to produce in itself. The manufacturing and development of gene therapy is vastly different from that of conventional treatments. The distribution of this medicine is also underdeveloped, expensive, and requires significant investment in training of those who will administer the procedures (Whittal, 2021). It is also worth mentioning that it is still unknown whether health insurance has coverage for the entirety of gene therapies, which could boost the prices that people are paying (NORD, n.d.). 

Fortunately, there is a way to address these high prices, and many companies are working on how to justify the prices in the long run. Gene therapy may significantly reduce the amount spent on treatment in a single person's lifetime. For example, gene therapy in replacement for hemophilia A, Valoctogne Roxaparovec is estimated to save patients around 6.8 million dollars in treatment, in comparison to the existing treatment for hemophilia, which requires frequent infusion and life-long medication (Whittal, 2021). As can be observed, we are presented with specific situations where the benefits of these gene therapies may outweigh other forms of treatment, justifying drug companies to place these prices at such high amounts. 

Additionally, gene therapy is also one-time-administered, meaning that manufacturers receive a one-time payment. Without the high prices for these one-time administered treatments, it is difficult for manufacturers to make long-term revenue from these therapies (Whittal, 2021). Since the profit is so little to be made, and it costs so much just to research and develop these therapies, manufacturers often feel entitled to large amounts of payment, to compensate for time and profit. 

So, what can be done about this? How can we ensure that customers have the available money and that manufactures get paid what they deserve? One way to guarantee that the price is justified is by payer-manufacturer contracts that ensure that the benefits of the payment are held on to the long term. For example, a person who is taking Luxturna® can base their payments around the development of their recovery, as they gain their vision back by a certain degree, they will have to make deposits. Once they have reached full recovery and regained their vision, then the individual can finish paying off the full deposit. Agreements such as this one can guarantee that the payment is based on specific milestones the patient reaches and can allow payments to be made based on these milestones, allowing for flexibility and budgeting between payments (Whittal, 2021). This kind of agreement ensures that both parties have their benefits and losses. 

Another way 

As we emerge from this science-fiction-like technology and into our reality, its impact on healthcare spending has become increasingly apparent. While this technology has the potential to save millions, some serious economic challenges need to be addressed in the pharmaceutical industry, which can help alleviate the cost of these therapies. The initial prices can be daunting for some people, and many may certainly choose their bodies to suffer instead of their wallets. 

While companies work on the justifications, and methods of reducing costs, there is still that leap we need to make healthcare accessible– for all. Gene therapy is a reminder that innovation must come with accessibility, and can shape the future of our healthcare spending and the way that technology is used in the medical field.  

Works Cited

Food and Drug Administration (FDA). “What is Gene Therapy?” FDA, 25 July 2018, https://www.fda.gov/vaccines-blood-biologics/cellular-gene-therapy-products/what-gene-therapy. Accessed 18 October 2024.

Heem Wong, Chi, et al. “NBER WORKING PAPER SERIES ESTIMATING THE FINANCIAL IMPACT OF GENE THERAPY IN THE U.S. Chi Heem Wong Dexin Li Nina Wang Jonathan.” National Bureau of Economic Research, April 2021, https://www.nber.org/system/files/working_papers/w28628/w28628.pdf. Accessed 18 October 2024.

National Organization for Rare Disorders NDA. “Gene Therapy - Frequently Asked Questions.” National Organization for Rare Disorders, https://rarediseases.org/gene-therapy/faqs/.  Accessed 18 October 2024.

Whittal, Amanda, et al. “Exploring the economics of gene therapy innovation and price.” Dolon, January 2021, https://dolon.com/wp-content/uploads/2022/01/220120-Gene-Therapies-Paper.pdf. Accessed 18 October 2024.