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Post by forthefuture on Jan 14, 2015 6:39:16 GMT
Drug pricing has gotten a lot of attention lately with HepC drugs Sovaldi, Harvoni, and now Abbvie's Viekera Pak taking center stage. Express scripts was the first pharmacy manager to restrict access to one of these drugs in order to save on cost. They've now gone on the record saying they'll look at cancer treatments next for cost savings. That got me thinking about some of the numbers that OCAT management has thrown out regarding where they'd price the RPE therapy.
Specifically, the $10K per eye from Rabin raised my eyebrow as I thought it to be quite high. Here's my speculation on where that number came from.
Dry AMD, as we know, does not have a currently approved treatment so there's no precedent to price the drug. Dry AMD, if left untreated, will progress to wet AMD, for which there is a treatment and may be used in this case as a pseudo-comparison point. The current standard of care for wet AMD is regular injections of REGN's eyelea. Eyelea is priced at $1850 per treatment with dosing at every 4 weeks for the first 12 weeks, then every 2 months thereafter. Over the course of a year, that's 7 treatments. 7 x $1850 = $12,950 for the first year and $11,000 for every year after that. Insurances won't reimburse unless it's creating savings for the healthcare system, so the RPE therapy would have to be priced at a discount to $11,000, and therefore $10K per treatment, assuming it lasts for a year and prevents wet AMD would be a natural price point. Now, if OCAT can prove that their therapy increases visual acuity, or halts its decline, and prevents wet AMD for more than a year, they could potentially garner an even higher price.
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Post by CM kipper007 on Jan 14, 2015 7:09:22 GMT
The last Cc, the new price was 100k for treatment, not 10.
Personally I feel that is too high, but if it's a one off fee, and that person isn't paying 11k year after year, cell therapy is cheaper when you get to year 9.
How long a person diagnosed in their teens with SMD?
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Post by ymc on Jan 14, 2015 7:36:11 GMT
Might have to take into account the costs of the procedures themselves. The RPE implants would require the more expensive special services of relatively few retinal surgeons in out-patients surgery facilities which require hours of "layovers" after the procedures. And there will be office follow-ups afterward to check on the implants. Eyelea injections for wet AMD can be done by most eye doctors in their own offices. Keep in mind most AMDs actually progress to GA (geographic atrophy), only a fraction of AMDs turn into wet AMD. But wet AMD can result in blindness more quickly and more severely than GA. It's a little more complicated especially when throwing in the possibility of complication like cataracts. Your cost estimation is indeed quite a valid starting point it seems.
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Post by deadally on Jan 14, 2015 13:51:27 GMT
Can you add to your point about insurance companies not reimbursing unless it creates savings? This is unknown to me, and my impression is that insurance companies will reimburse the standard of care, should one be established. The price is negotiable, but they don't usually deny reimbursement on price alone, as I understand it.
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Post by Wallace907 on Jan 14, 2015 14:37:02 GMT
The last Cc, the new price was 100k for treatment, not 10. Personally I feel that is too high, but if it's a one off fee, and that person isn't paying 11k year after year, cell therapy is cheaper when you get to year 9. How long a person diagnosed in their teens with SMD? I don't remember if they specified that their pricing was for AMD or SMD(both?), but sounds to me like the latter. The good news is that its going to be feasible to scale the production. If sales suffer from bad pricing the company should be able to modify rather quickly. Reimbursement aside, there's a lot of people out there who will pay 8 thousand bucks or more for the latest high-def TV....so it shouldn't surprise if people are willing to come up with 100k to save their eyesight ASAP. Not that OCAT will always ask for six figures, but new technology never comes cheap, and they probably wouldn't be able to deliver enough cells @ 10k per treatment anyway. fyi, the direct savings from an AMD treatment would only amount to about $372/yr (recommended vitamins and outpatient services). According to PBA, when you start factoring indirect costs and production loss it could arguably be as high as 50k per year from legally blind to a healthy and an able-bodied worker. |
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Post by Keybridge - Cult Member 003 on Jan 14, 2015 15:16:08 GMT
The last Cc, the new price was 100k for treatment, not 10. Personally I feel that is too high, but if it's a one off fee, and that person isn't paying 11k year after year, cell therapy is cheaper when you get to year 9. How long a person diagnosed in their teens with SMD? It wasn't even $100k that was mentioned - Wotton mentioned six figures as a possibility, obviously providing for a higher range to consider. Everyone focuses on insurance reimbursements, but there is a segment of the population that would pay six figures without insurance coverage - that alone would provide for very high valuations. |
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Post by chuck on Jan 14, 2015 21:18:18 GMT
Years and years of research, and millions and millions of dollars have gone into this ongoing effort. A six figure price tag out of the gate is absolutely warranted. I expect the price to decrease over time but why would you price something for ten times less than you think you could get? If the therapy ultimately gets approval and proves to provide never before seen results with no other approved treatment coming close then you have a breakthrough and should absolutely set pricing accordingly. I understand the urge to make it very affordable right away but that is just not good business, and this is indeed a for-profit business even though it sure hasn't seemed that way. Who knows what the pricing will end up being but you always should start on the high end as it's much easier to come down than go up, if needed.
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Post by forthefuture on Jan 20, 2015 5:41:26 GMT
Can you add to your point about insurance companies not reimbursing unless it creates savings? This is unknown to me, and my impression is that insurance companies will reimburse the standard of care, should one be established. The price is negotiable, but they don't usually deny reimbursement on price alone, as I understand it. Deadally, it certainly isn't as cut and dry as I may have made it out, but I think we're starting to see a shift in payer sentiment. The example I cited has gotten a lot of attention and I'll paste a few links to some pieces on the issue. www.fiercepharma.com/story/express-scripts-assembling-anti-sovaldi-coalition-shut-out-gilead-hep-c-dru/2014-04-08lab.express-scripts.com/insights/specialty-medications/harvoni-orphan-drug-pricing-for-a-nonorphan-drugThe situation with Sovaldi/Harvoni is different from the RPE discussion since there is no other option, however, with the potentially high number of dry AMD patients, Ocata won't be given free reign to charge whatever they want without facing what I believe will be some creative, strong-arm strategies from insurances. A lot of the recent discussions stems from the fact that therapies have gotten so advanced, that in many cases we're talking about functional cures where that was never even a thought before. The question becomes "how much is reasonable to charge to cure X" when there isn't a prior case to study for that indication. To those quoting the "6 figures" number, I could be wrong, but I believe that's for SMD, not AMD. I'm making these numbers up, but if Ocata were to charge $100,000 for 1,000,000 AMD patients in their peak revenue year, that would be $100,000,000,000. $100 billion! Many of those patents would be covered under Medicare due to their age. For reference, $100B is 20% of total Medicare spending last year... for a single drug. Dry AMD would bankrupt Medicare. |
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Post by tmfbmf on Jan 20, 2015 13:33:12 GMT
To those quoting the "6 figures" number, I could be wrong, but I believe that's for SMD, not AMD. I'm making these numbers up, but if Ocata were to charge $100,000 for 1,000,000 AMD patients in their peak revenue year, that would be $100,000,000,000. $100 billion! Many of those patents would be covered under Medicare due to their age. For reference, $100B is 20% of total Medicare spending last year... for a single drug. Dry AMD would bankrupt Medicare. How much would medicare save by not having to care for blind patients for the rest of their lives? $100,000 per patient? Probably more. Bankruptcy is not an issue. (But I agree, the 6 figure comment was only for SMD.) |
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Post by deadally on Jan 20, 2015 13:42:30 GMT
forthefuture is definitely correct on the pricing. We have not been given guidance on the price point for AMD. The "six figures" figure was specifically for SMD, which Wotton was speculating would be fair based on the pricing of other orphan drugs. Having that status affords a company the flexibility to charge more because their cost of development is still high. But the treatment population is relatively small. This is the incentive that regulatory bodies provide.
I have my concerns for that price figure for patients with SMD, since they're going to tend to be younger (thus probably not on a gov't health program like medicare), but I think I've already divulged my ignorance of payer dynamics quite enough. What we know for sure is that we've gotten no guidance on AMD pricing, and there is no reason to think they'll go for the same price point in AMD.
I imagine that payers like the Medicare system would use their substantial leverage to bring any price to a reasonable amount. How much is a cure worth? Hard to say, definitely a lot. But it's been made exceedingly clear that our government does not really care to think about spending in the long term, since short-term dynamics are all that the voters seem to pay attention to.
Needless to say, we can all rest assured that if Ocata comes up with the first bona fide effective treatment for AMD, the investors will be just fine.
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Post by forthefuture on Jan 20, 2015 14:29:21 GMT
To those quoting the "6 figures" number, I could be wrong, but I believe that's for SMD, not AMD. I'm making these numbers up, but if Ocata were to charge $100,000 for 1,000,000 AMD patients in their peak revenue year, that would be $100,000,000,000. $100 billion! Many of those patents would be covered under Medicare due to their age. For reference, $100B is 20% of total Medicare spending last year... for a single drug. Dry AMD would bankrupt Medicare. How much would medicare save by not having to care for blind patients for the rest of their lives? $100,000 per patient? Probably more. Bankruptcy is not an issue. (But I agree, the 6 figure comment was only for SMD.) According to this report, the annual financial burden for all causes of blindness is $50B. documents.preventblindness.org/publichealth/Impact_of_Vision_Problems.pdf |
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Post by ymc on Jan 20, 2015 20:05:21 GMT
Moderators, would this document "documents.preventblindness.org/publichealth/Impact_of_Vision_Problems.pdf" be a great sticky to have? I think it is. The document provides great references to the economic impact of vision problems.
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Post by JHam on Jan 20, 2015 22:56:37 GMT
Moderators, would this document "documents.preventblindness.org/publichealth/Impact_of_Vision_Problems.pdf" be a great sticky to have? I think it is. The document provides great references to the economic impact of vision problems. I don't think we can just sticky a pdf file. It'd have to be a new thread, which I can do if you'd like. |
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Post by ymc on Jan 21, 2015 15:43:04 GMT
Oh, would sticky the thread containing the pdf file be possible? I think the statistic data are great general references to have. May be sticky folders containing similar topics be good organizational approach to group the individual stickies for a cleaner look. Thanks.
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Post by ytseschew on Jan 23, 2015 3:20:38 GMT
This is a very interesting thread. Thanks for posting it. From that document, it looks like the direct medical costs for AMD are approximately $570 million per year (in 2004). The majority of the costs are for other visual problems like corneal transplants, refractive error, and glaucoma. So the $50 billion number is misleading for our purposes. The paper says that there are 1.595 million AMD patients aged 40+ who used medical services in 2004. That comes out to around $357 per patient per year. This doesn't account for indirect costs or lost labor costs, or costs of other medical problems that happen due to poor eyesight. This also reflects the fact that there's no current treatment for AMD. Nonetheless, I think that insurance companies will be very reluctant to pay "six figures" for a treatment that halts AMD or even improves vision in most patients. $10k per treatment sounds much more realistic to me.
-yt
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Post by JHam on Jan 23, 2015 3:36:32 GMT
Thread stickied at the top per request.
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Post by captsmith77 on Mar 17, 2015 5:36:22 GMT
The last Cc, the new price was 100k for treatment, not 10. Personally I feel that is too high, but if it's a one off fee, and that person isn't paying 11k year after year, cell therapy is cheaper when you get to year 9. How long a person diagnosed in their teens with SMD? Is that per eye, or combined? I agree that if you need future injections that it could make some sense, but I would hope that only one injection is required per eye, and that a fair price could be found. No matter the cost, getting clear vision is important and life changing. Hopefully OCAT is the company that can deliver these therapies at an affordable cost to each patient. If the results are good in Phase II trials, I see the company getting bought out by a big pharma company that had no initial desire or ambition to tackle the controversial therapies of stemcells. In the end, I believe that OCAT will succeed, but they still have a long ways to go before reaching the finish line. |
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irvarons
New Member
Retired, former consultant to the ophthalmic industry
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Post by irvarons on May 26, 2015 1:12:57 GMT
I haven't visited this board in quite a while, but when I saw this topic, I decided to let you all know about my recently published article on the subject. The article was published (online) about two weeks ago in the May issue of The Ophthalmologist. Here is how I describe its content: What will Ophthalmic Gene Therapy and Stem Cell treatment cost and how will we and the healthcare system pay for it?
With the likelihood of a gene therapy and/or a stem cell treatment for retinal diseases to be approved for marketing within the next two to three years, it is time for the ophthalmic community – the suppliers, practitioners, patients and payers – to start thinking about how much these regenerative medicine treatments are likely to cost, and how patients and the healthcare system will pay for them.. In The Economics of Gene Therapy, I propose a pricing model for Regenerative Medicine in Ophthalmology, based on the population of patients to be treated, and suggest that an annuity program model, based on performance and duration of efficacy, could be used to pay for it. Let the dialogue begin. To read all about it, please follow this link. You have to sign up to read it online, but it is free to do so. Irv |
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Post by JHam on May 26, 2015 8:09:16 GMT
I haven't visited this board in quite a while, but when I saw this topic, I decided to let you all know about my recently published article on the subject. The article was published (online) about two weeks ago in the May issue of The Ophthalmologist. Here is how I describe its content: What will Ophthalmic Gene Therapy and Stem Cell treatment cost and how will we and the healthcare system pay for it?
With the likelihood of a gene therapy and/or a stem cell treatment for retinal diseases to be approved for marketing within the next two to three years, it is time for the ophthalmic community – the suppliers, practitioners, patients and payers – to start thinking about how much these regenerative medicine treatments are likely to cost, and how patients and the healthcare system will pay for them.. In The Economics of Gene Therapy, I propose a pricing model for Regenerative Medicine in Ophthalmology, based on the population of patients to be treated, and suggest that an annuity program model, based on performance and duration of efficacy, could be used to pay for it. Let the dialogue begin. To read all about it, please follow this link. You have to sign up to read it online, but it is free to do so. Irv Thanks Irv! This is a great dialogue to have. |
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Post by spambox on Nov 12, 2015 22:18:55 GMT
$10k per eye? Well considering the scam- I mean buyout, when all the other IP is also considered, I guess pricing is now valued at ...hmmm ...well you could probably get it done at your local 99cent store, put it that way.
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