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Business News/ Opinion / Views/  $3.5 million for a dose? Time to heal this market
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$3.5 million for a dose? Time to heal this market

The eye-popping price of a new haemophilia drug in America should force a big rethink of the pharma business. Patent protection does foster innovation, but this model needs fixing

 (AFP)Premium
(AFP)

Many unexpected events took place this week, but the real eye-popper was a price: $3.5 million. As reported, this is what US-based CSL Behring plans to charge for a single dose of Hemgenix, its new gene-therapy drug that was just approved by the US federal regulator for the treatment of haemophilia B. It is a scary disease, no doubt, one that prevents blood from clotting in those it afflicts, putting them at risk of dying from an accident no worse than a shaving nick. It is also passed along through human genes, popping up among endogamous groups, particularly, as found among Europe’s royalty of yore, an observation that once gave it the nickname of ‘the royal disease’. Its popular association with privileged lineages, however, is not to blame for that jaw-dropper of a price tag. Some 16 million people in the US and Europe are estimated to suffer from this kind of haemophilia, and since only one infusion of Hemgenix need be given for the patient’s body to start churning out its own clot-forming proteins, its price had to be steep just to cover R&D costs and turn a profit. If its efficacy is weighed against other options such as successive clot-protein shots, say its marketers, it will prove a winner. But still, 28.6 crore per shot is surreal.

Actually, by recent trends in gene therapy, it’s not all that extraordinary. Bluebird Bio’s Zynteglo for a blood disorder called beta thalassemia was launched at $2.8 million, for example, while Novartis’s Zolgensma for infant spinal muscular atrophy made news after its 2019 approval for charging $2.1 million. CSL Behring, which acquired the rights to market the haemophilia drug from uniQure two years ago, could argue that this is exactly how the market works. Big-ticket innovation is both expensive and risky, its rewards must always be high for it to attract resources, and it’s perfectly fine to offer a few rich folks an expensive new formulation so long as it will go off patent and cheapen eventually for the benefit of others. This rationale, the need to incentivize eureka moments in R&D labs, is the bedrock of today’s global pharma industry. But the operative part is the patent protection that drug-makers get as a policy measure. While intellectual property in general clearly has value, and must not be taken lightly, the official monopolies that patent-holders are awarded for long periods in spaces of mortal anxiety among customers ought to force a hard rethink. After all, we do not always know how much money actually goes into drug discovery, but we do know that a state-erected market entry barrier isn’t laissez faire and the resultant monopoly can spell extortionate charges.

One could shrug and cite Gordon Gekko from the 1987 film Wall Street, the character played by Michael Douglas who declared that greed is good. “Greed works," he said, “Greed for life, for money, for love, for knowledge, has marked the upward surge of mankind..." Such rhetoric, with its touch of truth, asks us not to bat an eyelid over life-saving drugs selling for millions of dollars. Alternatively, we could stay aghast and look for a way out of the prevalent model. State-funded R&D was once the Indian approach; but, sadly, state-run projects are rarely innovative. As another option, policymakers could expose drug-makers to commodity-like market dynamics a lot sooner. What if patent tenures were shortened to five years or less, exposing new drugs early to cheap generics made in low-cost places like India? For the sake of a healthier world, it’s worth a shot. Let’s heal this business.

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Published: 24 Nov 2022, 11:15 PM IST
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