Specialty Drugs Draw Intense Social Scrutiny
The attention paid to my personal story of wrestling with massively expensive gene therapies shows the discussion around drug costs remains intense and unresolved.
I’ve never had a Facebook account, Snapchat, Instagram, or, lord forbid, TikTok.
Unsurprisingly for someone who will be eligible for Social Security benefits this year, I’d readily throw out my Android in favor of an early-aughts Blackberry. (Boy, did I love that keyboard.) Counting social media hits has never been my thing.
But I have taken a bit of interest in the number of “impressions” this column gets on my one social media platform, LinkedIn. I’m not sure I fully understand what an impression is, but I’m impressed when a column gets a couple thousand of them. In late 2024, though, my column about the cost of specialty drugs and their impact on employers produced more than 10,000 impressions. This was about as viral as an industry trade association guy is ever going to get.
It’s interesting because the subject of specialty drug pricing is provocative, but my expressed views were, and are, ambivalent. The CliffsNotes version: My 28-year-old son suffers from Duchenne muscular dystrophy (DMD), a single-gene-defect disorder. Gene therapy will one day be the cure, but for now there’s only one drug available, Elevidys, produced by the drug company Sarepta Therapeutics. The list price for one infusion is $3.2 million. It seems to work, but far from perfectly. There are also many questions about whether further infusions will be necessary if the drug’s efficacy wanes over the years, or whether redosing will even be possible if the immune system rejects the viral vector that is part of the treatment (a matter that remains scientifically unclear).
Meanwhile, I’ve fielded many calls from brokers struggling to help employers field the ever-escalating costs of specialty drugs like Elevidys. The costs are consequential and painful. Being the parent of a son who could benefit from this treatment—yet expressing deep concern about the price tag for employers and society—lit up the internet hits from the global Duchenne community. Nobody was ugly about it in their comments, but there was significant sentiment that my only concern should be getting that drug to my kid, full stop. The column touched a nerve and is emblematic of the many paradoxes in drug development, the trade-offs for payers, and the hostility toward insurers.
In December, 60 Minutes aired a report on gene therapies, focusing on drugs like Elevidys and how the American healthcare system hasn’t figured out how to pay for them. (Let the record reflect that I beat CBS to the punch a year earlier.) Among those interviewed was Jonathan Gruber, chair of the Economics Department at MIT and an architect of the
Affordable Care Act. As he put it, “I liken it to a coming tsunami, which is basically gonna overwhelm the employer-sponsored insurance system. What happens when you have genetic cell and gene therapies that treat cancer or heart disease, which are much more common? That’s when the tsunami hits, and we’re threatened to be underwater….About two-thirds of the insured in America are in [self-insured] arrangements. They can’t afford to pay this, so they’re facing a difficult financial decision, which is, ‘Do I cover this drug and potentially go bankrupt? Or do I not help my unlucky employee?’”
Being the parent of a son who could benefit from this treatment— yet expressing deep concern about the price tag for employers and society—lit up the internet hits from the global Duchenne community. Nobody was ugly about it in their comments, but there was significant sentiment that my only concern should be getting that drug to my kid, full stop.
60 Minutes also interviewed Sarepta CEO and President Doug Ingram (someone whom I’ve met and like). I can relate somewhat to what he said about parents being confronted with the diagnosis. “They’re always told, ‘Your boy has Duchenne muscular dystrophy. There’s nothing we can do about it. Go home, love him, because this disease is gonna steal him from you bit by bit, day by day, and he will die. And you gotta get used to that.’”
Elevidys may prevent that dire outcome. But, he was asked, doesn’t the $3.2 million price tag reflect corporate greed?
Ingram noted the small American DMD population (about 15,000 people) and the costs of drug development. “Today, on average, it takes more than 10 years to develop a therapy. It costs nearly $3 billion on average to make a therapy. And at the beginning of that journey, the probability of it being successful is nearly zero. And in the context of that, of course therapies when they’re eventually approved are going to be very expensive. So what we need to do is fix that. We’ve had 60–70 years of layering and layering and layering of requirements, all for the laudable goal of ensuring that the therapies that are approved in the United States are both safe and effective. We have to do the hard work of getting under that and stripping it down to those things that are absolutely necessary, informed by the science that we have today, not the science we had in the ’60s, and find a way to make therapies less than $3 billion with a higher probability of success.”
My experience in the disease community is that Ingram is right. My experience in the brokerage community likewise is that employers are always trying to do right by their workers.
Meanwhile, President Donald Trump has been quite the populist on drug pricing, saying in December that Americans will soon pay among the lowest prices in the world under his “most favored nation” agenda. “For decades, Americans have been forced to pay the highest prices in the world for prescription drugs, by far,” Trump said. “We have 4% of the world’s population yet pharmaceutical companies make 75% of their profits [in the United States].”
Yes…but. Price controls distort market signals, lead to shortages, reduce quality, create inefficiencies, and could shrink research and development. Yes, Americans pay much more for many drugs than consumers globally. But 91% of American prescriptions are for generic drugs, which are cheaper here than almost all the rest of the world.
As with everything in the drug pricing world, every action has a reaction. For many retailers, when prices go up demand goes down. But that won’t necessarily be the case with specialty drugs—we may be looking at a scenario in which price and demand rise in lockstep.
