Thought Leadership Healthquake™: Perspectives on “Value” in Healthcare — Part 3

by Michael N. Brown, CEO and Dr. Philip Schrank

Summary: This is the third in a series of three articles addressing the complex issues surrounding the definition of value in the world of healthcare. In the first article, we discussed how the unsustainable growth in healthcare costs is pushing the need to define value for all healthcare services. We presented the following formula to assess value:

We used this formula to show how the differing perspectives of multiple stakeholders in healthcare affected the perceived value of glucagon-like-peptide 1 (GLP1) receptor agonists (i.e. Ozempic, Wegovy, and Trulicity). In the second round of the series, we used the same formula and stakeholder construct to evaluate the perceived value of robotic surgeries. In this article, the third and final installment of the series, we apply the same approach to gene-editing therapies that have been recently approved to treat sickle cell disease.

To potentially cure genetic diseases, scientists need to do two things simultaneously: 1) Target specific abnormal genes very precisely, and 2) Activate or deactivate the function of those targeted genes. The simplest genetic cures only require us to turn off a gene that is creating a problem for the patient. In 2011, scientists developed a “genetic scissor” known as Clustered Regularly Interspaced Short Palindromic Repeats, or CRISPR. These genetic sequences were first discovered by Japanese scientists in 1987 and were identified as a natural defense system used by bacteria to kill invading organisms. (reference). Almost twenty-five years later two women, Emmanuelle Charpentier and Jennifer Doudna, figured out a way to apply CRISPR technology to the treatment of genetic disease (reference). They were awarded a Nobel Prize for their contribution to this revolutionary branch of science in 2020, but it was not until December 8th, 2023, that the United States Food and Drug Administration approved the first CRISPR-based treatment for use on humans in the U.S.

The therapy is called CASGEVY or Exa-Cel, and is used to treat sickle cell disease. Sickle cell disease is caused by a gene in the body that produces a protein that in turn makes red blood cells morph into an abnormal shape. These abnormally shaped blood cells then get “stuck” in blood vessels, which can cut off the blood supply to different structures in the body. These sickle cell “crises” are remarkably painful and represent medical emergencies. In addition to causing these clogs, sickle-cell-shaped red blood cells are poor carriers of oxygen. This means sickle cell patients will need multiple blood transfusions over their lifetimes. For a CASGEVY therapy to be successful, the first step is to remove bone marrow cells from the patient. These marrow cells are then treated with CASGEVY which effectively cuts the faulty gene in those same cells. The treated marrow cells can now produce normal red blood cells. Before these new, healthy marrow cells can be replaced in the patient, all remaining marrow cells in the body need to be killed. The new, healthy cells are then used to repopulate the patient’s bone marrow, and the patient is cured.

A cure sounds great, doesn’t it? It would follow that everyone with sickle cell disease should be treated and be done with it, right? Well, unfortunately cost issues come into play. The total cost of treatment is around 2 million dollars, seriously influencing one’s perspective on value.

If you are a Patient, the value of CASGEVY is immeasurable. You never have to worry about a crippling, painful episode again. You never need to be hospitalized or undergo a blood transfusion for this again, and all associated complications associated with the disease disappear. Your disease will no longer affect your employment, your travel plans, or any facet of your lifestyle that was previously impacted by medical complications. No matter the cost, it is completely worth it. Value to patients: Immeasurable.

If you are the Government, this treatment has immense value even if you are the one stuck with the bill. Untreated sickle cell patients require immense amounts of medical treatment over their lifetimes, and reasonable estimates equate the cost of that treatment to well over 2 million dollars per patient. From the government’s perspective, these treatments are still a financial win. This cost-benefit analysis does not even consider the lost wages and sick days that are now eliminated. Value to the government: High

If you are a Private Insurance Carrier, this scenario is disastrous. You are now in a position to foot the bill for a treatment that will not realize its full value until the end of the patient’s life, and there is no guarantee that the patient won’t choose a different insurance carrier next year. Add to that, this is only the first of many genetic treatments that are on their way to FDA approval. Sickle cell patients are a small portion of the population. What happens when there is a cure for Type I diabetes, Parkinson’s disease, etc.? These treatments with extraordinary costs could be financially crippling to private insurers. Value to the private insurer: As low as it gets.

If you are a Pharmaceutical Manufacturer, you make out pretty well. You would think that the drug companies that produce the gene-altering therapeutics would be making a fortune on this, but not so fast. These treatments were extremely expensive to develop, pass FDA approval, and market, so they will need to compensate for those significant investments. But now that the heavy lift is over, every subsequent genetic therapeutic that gets approved will be a big win for them. Value to the pharmaceutical manufacturer: Good and getting better as time goes on.

If you are a Health Care Provider, these therapies are great for your soul and neutral for your wallet. The reason most people choose a career in healthcare is to help people get better. To now be able to completely cure what was a debilitating disease for one of your patients makes you feel proud of the profession you chose. While you may now lose this patient because they are healthy, other patients will fill your schedule. From a value standpoint, a steep cost with a great outcome works out for all. Value to the health care provider: Neutral

If you are a Hospital System, you are aligned with the healthcare providers on this one. While your business model is based on people getting sick, you still root for the patient. And while sickle cell patients may not be in the hospital as often as they were prior to treatment, most of them will end up in the hospital for something else eventually. Value to the hospital system: Neutral

If you take a step back, the real issue here is ethical in nature. How do we not just treat all these patients as quickly as possible? If you or a family member of yours had sickle cell anemia, surely you would not consider treatment an option, but rather a given. But if the cost is truly 2 million dollars per patient, who is expected to pay for these treatments without temporarily breaking the bank? If the drug companies don’t get adequately paid, can they afford to perform future research and development on new cures?

As we stated in the first installment of this series, one’s perception of value in healthcare is dependent on many factors, most especially your “seat” at the table. GLP-1 agonists, robotic surgery, and genetic therapies all stand to revolutionize healthcare, but someone must pay the bill. With a limited amount of healthcare dollars to spend, healthcare treatments will ultimately need to be rationed, or the expense of it all will bankrupt our society. It is therefore crucial that we define value in healthcare as swiftly and expertly as possible, so that society has a framework to make rational decisions about healthcare going forward.