A Dilemma for Governments: How to Pay for Million-Dollar Therapies

While there are more than six million people worldwide with sickle cell, most of whom living in sub-Saharan Africa, the initial launches are expected to focus on tens of thousands of patients in the United States and Europe.

Record-setting price tags for gene therapies have largely escaped the criticism that has followed other industry pricing decisions. The sentiment reflects just how powerful many of the gene therapies are — doctors sometimes go as far as to call them cures — and their unique position as one-time treatments. Such a therapy has just one chance to earn money, and in some cases can replace chronic treatments that would otherwise be given for the rest of a patient’s life at a much higher cumulative cost.

Still, for middle-income countries, “if benefits of these therapies are immediate in terms of health but the potential savings happen in the future, that math may not work for them,” said Rena Conti, a health economist at the Questrom School of Business at Boston University.

Tay Salimullah, a Novartis executive, said the company works closely with governments and health plans considering whether to cover Zolgensma, in some cases allowing them to spread out their payments over time, like a mortgage, or offering a price cut if the treatment doesn’t work.

In Brazil, the agreement with Novartis calls for the government to split payments for each treatment into five equal parts over four years. If a patient dies, must be permanently ventilated or is unable to maintain certain motor functions two years after receiving Zolgensma, the government will not be required to make the subsequent payments.

‘This Kid Has a Future’

Until six years ago, there were no approved treatments for S.M.A., which affects about one in 10,000 newborns. Infants with the most severe form of the disorder were sent home and their families were told to prepare for them to die.

Zolgensma and two other drugs approved since 2016 have opened up once unimaginable possibilities for S.M.A. patients. “I’m telling parents to keep putting money in their college fund because this kid has a future,” said Dr. Thomas Crawford, who treats S.M.A. patients at Johns Hopkins Medicine.