What makes an injection cost `16 cr!
3-year-old
Ayaansh Gupta, who was suffering from a rare spinal muscular atrophy (SMA), was recently administered a single dose injection worth `16 crore! While one wonders why it should cost so much, beyond the reach of 95 percent of the people, experts explain that it’s the cost for research and development. However, they all agree that if the government steps in, costs can be brought down
DR KODURU ISHWARA VARAPRASAD REDDY,
ACCORDING TO A 2016 STUDY PUBLISHED IN THE JOURNAL OF HEALTH ECONOMICS, IT TAKES APPROXIMATELY $2.6 BILLION AND
MORE THAN 10 YEARS TO CREATE A SINGLE NEW DRUG. ONLY 14% OF DRUGS IN CLINICAL TRIALS ULTIMATELY RECEIVE FDI APPROVAL SINCE A SIGNIFICANT AMOUNT OF DRUG RESEARCH DOES NOT SUCCEED, A MASSACHUSETTS INSTITUTE OF TECHNOLOGY (MIT) STUDY
SHOWED.
If you thought COVID was piling up expenses at home, wait till you read what parents of a little boy dished out recently for his treatment. 3-year-old Ayaansh Gupta, suffering from a rare spinal muscular atrophy (SMA), was administered a single dose injection worth Rs 16 crore! The ultra-expensive injection was part of a gene therapy and the cost was realised through crowdfunding from about 65,000 donors. While pharmaceutical companies across the world are relatively unregulated and the governments of the day are not doing enough, the medical fraternity points to years of painstaking research and development, high costs as the reasons why these lifesaving super drugs cost a bomb. But life-savers as they may be, the mindboggling costs leave many flabbergasted and searching for answers.
WHAT JUSTIFIES THE COST?
Padma Bhushan Dr Koduru Ishwara Varaprasad Reddy, entrepreneur and founder of vaccinemanufacturing company Shantha Biotechnics, shares his perspective. “I’m not justifying their high cost, but one should know how a product is made; how many stages it goes through; the number of years it takes to develop them, which could be anywhere between 25 and 30 years; and the manpower required through its different stages. And if the company manufacturing the drug doesn’t succeed after doing all that they did for decades, then who bears the cost?” he asks.
Furthering his argument, Dr Varaprasad gives the example of developing vaccines for Alzheimer’s. “One first needs to understand the ingredients in the brain, study between 1,000 to 1,500 different kind of secretions, and consider all other neurological inputs and more before starting the experiment, which requires massive manpower and material. Similarly, to replicate a human stomach, one needs two million dollars to study, calculate and screen thousands
of secretions and compounds.
THERE
ARE TWO MORE FDA-APPROVED DRUGS
FOR SPINAL MUSCULAR ATROPHY. RISDIPLAM (ORAL MEDICINE)
AND SPINRAZA (GIVEN INTRATHECAL/INTO THE SPINE AS INJECTION EVERY FOUR MONTHS). BUT THEY NEED TO BE TAKEN LIFE-LONG AND COST RS
40–70 LAKH PER CHILD PER YEAR
Another important expense, ranging between USD 50 million to 100 million, is the insurance cover before starting experiments,” he explains.
However, Dr Varaprasad too believes that money making is at the centre of all these
experiments and agrees that Rs 16 crore is too much for Ayaansh’s injection. “Obviously, the target for these kinds of drugs is the superrich who can afford these drugs, and not for the common man,” he states.
“THE COST OF FAILURE, COST OF DEVELOPMENT, UNCERTAINTY OF FUTURE INNOVATIONS ETC HAVE A ROLE IN PRICING DECISIONS. IF THE ECONOMICS DON’T WORK OUT, COMPANIES WILL NOT INVEST IN RARE DISEASES. THE NOTION OF ‘COST BASED PRICING’ DOES NOT APPLY TO IP AND RESEARCH BASED PATENT PROTECTED PRODUCTS WHICH ARE ESSENTIAL AND NOT DISCRETIONARY
—G. V. PRASAD, CO-CHAIRMAN AND MANAGING DIRECTOR OF DR REDDY’S LABORATORIES
GENE THERAPY IS AT THE FOREFRONT OF CUTTING-EDGE TECHNOLOGY AND BEST OF SCIENTIFIC ADVANCES HUMANS HAVE ACHIEVED, AND GENE THERAPY FOR DISEASES OF THE NERVOUS SYSTEM ARE CONSIDERED THE FINAL FRONTIER. THE RESEARCH INTO MINUTEST ASPECTS OF THESE THERAPIES INVOLVES HUGE MATERIAL AND MANPOWER COSTS.”
— DR RAMESH KONANKI PEDIARIC NUEROPHYSIAN RAINBOW CHILDREN’S HOSPITALS
“EXORBITANT PRICES OF SOME DRUGS CAN’T BE JUSTIFIED. MANY GOVERNMENTS ACROSS THE HAVE INITIATED REGULATIONS TO STOP ESCALATING COSTS OF HEALTHCARE. ONE OF THE MOST PROMISING INITIATIVES IN INDIA IS THE DRUGS PRICE CONTROL (DPC), WHICH CAPS THE MRP FOR ROUTINELY USED MEDICINES. EVEN SO, MEDICINES FOR RARE HEALTH CONDITIONS ARE IMPORTED AND DON’T COME UNDER THE DPC, WITH IMPORT DUTY AND CURRENCY CONVERSION RATES ADDING TO THEIR COSTS.”
— DR PRASHANTH CHANDRA, CONSULTANT (INTERNAL MEDICINE), GLENEAGLES GLOBAL HOSPITAL,
INVESTING IN RARE DISEASE
Dr Suneetha Narreddy, MD, ABIM, Senior Consultant, Infectious Diseases, Apollo Hospitals, also echoes Dr Varaprasad’s views regarding the time, effort and energy that go into making the drug. “The cost of manufacturing alone would not be that much. The pharma companies have to make huge investments for the smaller market. Doing research for small section is very challenging too,” she adds.
Another person sharing similar thoughts is G. V. Prasad, co-chairman and managing director of Dr Reddy’s Laboratories, attributing the pricing decisions to the cost of failures and development, uncertainty of future innovations etc. “If the economics don’t work out, companies won’t invest in rare diseases,” he adds.
Then pointing out that the notion of cost-based pricing doesn’t apply to IP and research-based patent protected products, which are essential and not discretionary, Prasad gives the example of Zolgensma.
“Zolgensma is the second and most effective gene-therapy medication for treating spinal muscular atrophy. The reason for its exorbitant cost is its miniscule market size in the drug manufacturing industry, with very few patients, and its potential to save those lives. The therapy is life-saving and a one-time use,” he says, pointing out, however, that many governments and healthcare systems (via the insurance) have been reimbursing the money, too.
OTHER FACTORS
While patents normally apply for about 20 years they have to be registered in every country where the drug is sold. Dr Suneetha points out how that stops other companies making rival copies that might compete to push the prices down. “But rules have since changed and attempts to make cheap copies of new drugs such as the Hepatitis C medicines in India have been subject to long court battles,” she adds.
Even so, Dr Varaprasad feels that the government is doing nothing. “They collect taxes; the health of its citizens is the responsibility of the government. Instead, it’s thrown to the private parties. I’d say it’s a complete failure on the part of the government,” he adds.
Dr Suneetha Narreddy also points out that the Government should also invest in the cost of research, which is again tax money. “Then the prices can be brought down, as it happened when the government invested
money for COVID vaccines. When the government invests money they purchase and supply the product at the lower cost,” she explains.
UNREGULATED MARKET
Dr Ramesh Konanki Pediaric Nuerophysian Rainbow Children’s Hospitals, the doctor who administered the Rs 16-crore drug on the three-year-old Ayaansh, also agrees with Dr Varaprasad about the factors that add to the drug price.
“Gene therapy is at the forefront of cutting-edge technology and best of scientific advances humans have achieved, and gene therapy for diseases of the nervous system are considered the final frontier. The research into minutest aspects of these therapies involves huge material and manpower costs. Success of one drug comes over many failures. Pharma companies spend billions of dollars without knowing if there will be successful or not. So to maximise the benefits, it’s probably sensible for pharma companies to understand whom they’re making these drugs for,” he says, adding that the Central and State Governments should initiate dialogue with pharma companies to negotiate a lower price in India, which he thinks isn’t impossible.
Dr Prashanth Chandra, consultant (internal medicine), Gleneagles Global Hospital, believes the pharmaceutical sector is relatively unregulated, enabling companies to decide their own prices. “Exorbitant prices of some drugs can’t be justified. Many governments across the have initiated regulations to stop escalating costs of healthcare. One of the most promising initiatives in India is the drugs price control (DPC), which caps the MRP for routinely used medicines. Even so, medicines for rare health conditions are imported and don’t come under the DPC, with import duty and currency conversion rates adding to their costs.”
IS IT WORTH IT?
According to Dr Suneetha the answer depends on who you’re talking to. “A person suffering should make a decision if they want the treatment,” she says.
Reiterating that gene therapy is clinically proven to be effective for SMA, Dr Ramesh points out points out that the maximum benefit of the therapy is for kids who receive the drug before they develop symptoms (pre-symptomatic).
“Their physical development is like any other normal child. For older children, it arrests the disease progression, and their motor functioning will improve. As some neurons would’ve already died by the time they received the drug, it’s not a cure in truest sense but will improve their quality of physical abilities and their life. This can be understood only by those who have a family member with SMA,” he adds.