New JMCP Article Discusses Calculating the Price Tag of Gene Therapies

An article published in the Journal of Managed Care & Specialty Pharmacy (JMCP) focuses on the price considerations of new gene therapies. One drug, onasemnogene abeparvovec, used in spinal muscular dystrophy, comes in at $2.125 million per use. Despite this high price, the authors note that critics fail to consider the drug’s downstream effects and overall impact on patient outcome. The authors discuss methods to calculate cost-effectiveness and how the Institute for Clinical and Economic Review (ICER) has attempted to address high drug prices.

The authors note, “When a treatment’s price is driven high (or “distorted”), an economic principle known as “theory of the second best” suggests that market price becomes a poor estimate of social opportunity cost, and adjustments should be made for such distortions. In any case, a high-cost standard of care creates an opportunity for new technology to generate cost savings, providing an inducement for market entry. Recognizing that this potentially creates a tendency to produce price distortions for new treatments, ICER has attempted to apply some ad hoc adjustments.” Read more here.

(Source: Garrison et al., JMCP, 5/2021)