Paying the price: How much should a drug cost?

European Pharmaceutical Manufacturer editor Reece Armstrong examines both sides of the argument relating to the world's most expensive drug. 

“How much is a life worth?

This was just one reaction to news that the world’s most expensive drug has been approved by US regulators.

Novartis’ Zolgensma treats spinal muscular atrophy (SMA), a rare neuromuscular disease that can lead to breathing difficulties, muscle paralysis and death in children. Zolgensma is a gene therapy which Novartis CEO Vas Narasimhan has said ‘could create a lifetime of possibilities’ for children and families impacted by SMA.

The caveat? A cost of $2.12 million per patient.

It’s no surprise that people are outraged by the cost of Zolgensma. After all, so called ‘big pharma’ doesn’t have the best reputation when it comes to drug pricing, with many patients being hit hard by cost increases for insulin, cancer drugs and EpiPens: all vital medicines that people desperately need.

The approval of Zolgensma isn’t without merit. Clinical trials have shown promising signs and it being a one-off treatment is especially beneficial for parents, never mind the fact that it offers hope for their children. As it stands, many infants with severe forms of SMA die within the first few years of their lives.

Zolgensma’s price raises questions into the viability of such expensive drugs, especially for countries poorer than the US, and others like the UK which operate on a process designed to get the most out of the system’s limited budget, and which has resulted in some innovative treatments not being available in the past.

In all fairness, Novartis has launched a programme designed to give patients dedicated support, both medically and financially, and will offer (partial) rebates if the treatment doesn’t work. The company will also offer financial assistant programmes for eligible patients, but with such a high price, many patients could find themselves outside of the eligibility bracket.

The fact that insurers have said they would pay for Zolgensma no matter the price should ring alarm bells for patients, especially given the rising trend towards gene therapies. Indeed, the need for such innovative treatments, coupled with the FDA’s willingness to expedite approvals for gene therapies, could see pharma companies being given free rein in regard to pricing.

But pointing the finger at drugmakers – which have to undergo years of clinical research and face billions of pounds in costs to develop a new medicine – may not be the answer in this case. Many people forget that pharma companies are businesses first and foremost and shouldn’t be shocked when treatments – many of which are truly remarkable – are priced highly.

Instead, governments and regulators should work towards models that promote transparency in drug development costs, in the hope that this helps reduce drug prices worldwide.

Unfortunately, a recent resolution to do just this, discussed at the World Health Assembly (WHA), failed to attract the attention of the UK, Germany and the US.

And while issues have been raised over the effectiveness of the resolution, its implementation marks a necessary step towards transparent models of drug pricing. Without them, drug companies will only act in their best interest and health systems will continue to pay the price.