Putting Right-to-Try Drug Prices in Perspective


Brainstorm Cell Therapeutics Inc. recently made headlines for attempting to offer an experimental treatment for amyotrophic lateral sclerosis (commonly shortened to ALS or called Lou Gehrig’s disease). This path-breaking treatment, named NurOwn, is a personalized cell therapy which works to promote motor neuron growth to reestablish nerve-muscle interaction.

The treatment was going to be the first attempt to offer patients access to experimental treatment under the new national right-to-try legislation. However, due to a lack of funding, Brainstorm decided not to pursue this option and instead focus on FDA approval. NurOwn is currently in phase 3 of the FDA’s approval process and will likely be approved in 2019 or 2020.

Although Brainstorm’s treatment is pioneering, most reports covering the story focus on its price, an estimated $300,000. Defaming the company’s pursuit of profit, a recent STAT piece holds, “It [the treatment’s price] reeks of opportunism, even when couched in compassionate rhetoric” and that “Right-to-try should not be right-to-die-poorer, but that’s what the law will end up being for patients if profit motive takes hold.”

The price is certainly eye-opening. But how much of can be blamed on right-to-try?

In 2012, a cystic fibrosis medication named ivacaftor cost patients $294,000 for one year of treatment. In 2015, melanoma treatment using the drugs yervoy and opdivo cost more than $250,000 per year. Other FDA-approved cell therapies currently cost between $375,000 and $475,000. NurOwn is comparatively cheaper!

Sadly, treating many serious or terminal conditions is outlandishly expensive. Experimental drugs distributed under right-to-try laws are just another example.

Some right-to-try critics allege that insurance companies will not cover the cost of experimental treatments, making access unaffordable for most patients. But patients receiving approved treatments are also strapped for cash. A report released by the American Cancer Society finds cancer patients paid nearly $4 billion out-of-pocket for cancer treatments in 2014.

These figures are alarming but also expected. As economist Thomas Sowell once remarked, “It is amazing that people who think we cannot afford to pay for doctors, hospitals, and medication somehow think that we can afford to pay for doctors, hospitals, medication and a government bureaucracy to administer it.”

The “bureaucracy to administer it” is the FDA, whose approval typically costs producers over  $1 billion. If right-to-try’s critics are concerned about affordability, they should be concerned about this figure first-and-foremost.

Blaming the profit motive is a misdiagnosis. Indeed, most drugs do not earn their companies a profit. High costs, especially in medical markets, are a symptom. The disease is regulation, and the FDA has been spreading it for decades.

***

Raymond March is a Research Fellow at the Independent Institute and Assistant Professor of Economics at San Jose State University.

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