Americans Support Paying for Miracle Cures – Pacific Research Institute

Americans Support Paying for Miracle Cures

Without pro-market payment reforms, cutting edge medical treatments known as gene therapies run the risk of becoming the dance that no one attends. Gene therapies are not medicines, instead, they are akin to an organ transplant. These procedures typically use re-engineered viruses to repair, replace, or shut off malfunctioning genes that cause devastating diseases.

For example, the newest gene therapy to obtain FDA approval, Zolgensma, could save the lives of people with spinal muscular atrophy (SMA), a fatal genetic disease. Children with type 1 SMA, one of the more severe forms, typically die before they turn two. Children with other forms of SMA can have normal life expectancies but will be unable to stand, and experience weakness in the muscles of their arms and legs throughout their lives.

Zolgensma is poised to change that. The one-time treatment replaces malfunctioning genes – and allows patients to breathe, move on their own, and lead higher-quality lives. Researchers are working on dozens of therapies like it, for everything from Alzheimer’s, cystic fibrosis, and HIV to cancer, Parkinson’s, and sickle cell disease.

Despite the promise gene therapies offer, this huge advancement in the science has exposed the flaws of our current health care payment system. In short, our current third-party payment system does not provide effective insurance services for patients, consequently, it is simply not prepared to cover these costs. As a result, as documented by Business Insider and the Washington Post, families with children living with SMA are being denied access to these life-changing therapies.

As would be expected, and despite these problems, Americans are gung-ho about the potential of gene therapies. Eighty-three percent support efforts to advance the medical innovations offered by gene therapies, according to a new national survey sponsored by the Center for Medical Economics and Innovation at the Pacific Research Institute, where I serve as Director. Four in five believe focusing on curing a disease is better in the long run than simply treating it.

This is especially true for illnesses like spinal muscular atrophy that strike newborns, infants, and toddlers who might die absent treatment. Fifty-nine percent of Americans say they are more likely to support gene therapies knowing they could provide cures for illnesses that hurt the young.

By curing debilitating diseases and thus eliminating the need for chronic care, gene therapies can provide significant long-term value. But the upfront cost tends to be huge. A course of Zolgensma, for instance, is priced at over $2 million. Even so, 79 percent agree that gene therapies should be pursued despite their high costs.

Of course, the development of life-changing therapies does not help if the costs are not covered. Sixty-nine percent of Americans believe Medicare and private insurance should cover the costs of gene therapies. Two in three would support a small additional charge on their own insurance bills to cover the costs.

Consequently, we need to explore new ways of paying for the most expensive forms of medical care because the disincentives that pervade the current third-party payer health insurance system have become an obstacle to accessibility.

The current system is readily available to cover routine health care expenditures, such as most of the costs for checkups or the $25 it costs to purchase generic penicillin, which does not create financial risks for most patients. However, when patients face true health care risks such as the cost of managing devastating diseases, health insurance often fails to adequately reduce the financial risks. Yet, insuring against these financial risks is the ultimate purpose of having health insurance.

To fix these problems we can start by taking steps to ensure that patients have adequate catastrophic coverage that would include covering the costs of gene therapies. Insurers may be unable to bear the risks associated with million-dollar treatments on their own, so we’ll need to explore the use of reinsurance and/or high-risk pools to effectively manage exceptional costs.

Further, since the benefits from gene therapies occur over the long term, why shouldn’t the payments be spread out over time, instead of paying the full cost of the therapy upfront? We rely on 30-year mortgages to finance the purchase of a home. Why can’t we, or our insurers, do something similar for life-saving therapies?

We could also tie payments for gene therapies to pre-established benchmarks for patient success. Patients that fail to meet one or more of these benchmarks could receive discounts that reflect the value they actually received from the therapies.

Without reforms to the current payment systems, the full promise that gene therapies can offer patients will not be met. Innovations that strengthen competition and improve market incentives are the surest way to finance the new gene therapies that could save the lives of countless patients afflicted with debilitating diseases.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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