How Much Is a Miracle Worth?

Issue 04-10-17   |   Reviewer:   Katherine Campbell, Ph.D.
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Abstract

Gene therapy and other technologies are making remarkable new treatments available. Previously incurable conditions can now be cured, and some that once required lifelong drug regimens can now be cured by a one-time treatment. This is wonderful for patients, but these new one-time treatments are creating challenges for pharmaceutical companies and insurance providers.  

Pricing a one-time treatment that cures a medical condition is quite different from pricing drugs that are taken over protracted periods of time. Pharmaceutical companies are being challenged to determine the one-time price for a cure, and the prices can be substantial. Insurers are used to paying for multiple lower priced doses of drugs, and are grappling with the prospect of facing one-time charges for a curative treatment that could cost hundreds of thousands of dollars. These challenges are compounded by a number of factors, including the ability of patients to change insurers and the differing sizes of patient populations.

From a financial perspective, there are a variety of ways that the pricing and payment could be handled. However, this is more than a financial issue. In recent years, pharmaceutical companies have been scrutinized for high prices. While pharmaceutical and insurance companies need to be mindful of profit and the interests of shareholders as they adopt pricing and payment structures for one-time treatments, they face public relation challenges if they price treatments too high. 





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