Could long-term "mortgages" help patients fund short-term curative treatments?
- Pricey, near-curative drugs like Gilead's hep C meds Harvoni and Sovaldi have simultaneously transformed the standard of care and increased cost burdens on patients, insurers, and governments. Properly pricing huge advances in medical treatment has always been a challenge, but is only more significant now as the industry faces withering criticism on pricing.
- A recent health-economics article in Science Translational Medicine suggested long-term installment loans as a possible solution for increasing access to these new drugs. Much like mortgages, these loans could be amortized over a long repayment period.
- Written by MIT economist Andrew Lo and Dana-Farber oncologist David Weinstock, the article is meant to spur a broader conversation around pricing and access.
Given the introduction of several high-priced, potentially curative drugs in the last several years, the authors had many examples to draw on. In their article, they focus on Gilead's Sovaldi for hepatitis C (HCV) and UniQure's Glybera for lipoprotein lipase deficiency. Since treating all 2.7 million Americans with HCV would cost an estimated $227 billion, the chances of universal coverage for this population are slim.
Similarly, the gene therapy Glybera costs $1 million per course of treatment--though the treatment population is small. For drugs like these the benefit is experienced across a patient's lifetime but the cost is incurred all at once.
The authors argue it makes more sense to use installment loans to lessen the cost upfront and gain the long-term health advantage. This approach could broaden access and help patients offset prohibitively high co-pays, while also allowing drug companies to recoup the investment they made in the drug's development.
"Although the idea of patients assuming debt to obtain life-saving therapies is distasteful, the status quo—patients simply not having access to these critical therapies or having to pay the full price upfront for their therapies because they lack insurance coverage—is even more troubling," the authors said in the article.
While their argument is more theoretical, pharma companies are considering new ways to price drugs. One way is to establish value-based frameworks linking the price paid for drugs to value provided. Novartis, for example, agreed to pricing based frameworks with the insurers Aetna and Cigna, tying the price of its heart med Entresto to the reduction in the proportion of patients hospitalized for heart failure.