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Key Points
Gene therapy usually involves a one-time treatment but can cost from $2 million up to $3.5 million per patient.
Like Gilead Sciences did with its hepatitis C drugs, gene therapy companies used value-based pricing to justify the high fees for novel therapies.
Unlike Gilead’s hepatitis C drugs, these gene therapy treatments have yet to cure rare diseases but instead care for the worst symptoms.
5 stocks we like better than CRISPR Therapeutics
Gene therapy treatments have been making major headlines as advances in gene editing have gone mainstream thanks to the advent of CRISPR/Cas-9 technology. The shot heard around the world in the medical sector occurred on December 8, 2023, when the U.S. FDA approved Casgevy, the first FDA-approved gene-editing treatment for sickle cell disease (SCD) from Vertex Pharmaceuticals Inc. NASDAQ: VRTX and co-developed by CRISPR Therapeutics AG NASDAQ: CRSP.
The year 2024 may be the tipping point for mainstream acceptance of gene therapy. There is one major stumbling block for all the benefits it brings: the massive price tag. Gene therapy treatments range from $2 million to more than $3 million for a single treatment. Very few people can afford this treatment, and very few insurers cover reimbursement for these procedures.Get CRISPR Therapeutics alerts:Sign Up
Gilead Sciences Hepatitis C drug pricing controversy 
In 2013, Gilead Sciences Inc. NASDAQ: GILD received FDA approval for its hepatitis C virus (HCV) medication, Sovaldi. This miracle cure had a 90% to 96% success rate for curing HCV. 
A once-a-day, 12-week course of treatment could cure HCV for a price tag of $84,000. In 2014, Gilead launched Harvoni, which combined two antiviral drugs into a single pill for $95,000 for a 12-week course of treatment. The sticker shock of the treatment caused major blowback from patients, insurers and eventually Congress.
In 2015, a bipartisan investigation commenced into the pricing of Sovaldi and Harvoni due to its perceived exorbitant pricing, causing restricted patient access. The investigation did not pursue any legal actions but raised awareness of drug pricing. The report found that Gilead prioritized maximizing profits over patient accessibility. Gilead used lobbying strategies and restrictive agreements to maintain high prices.
Does value-based pricing justify the price tag?
Gilead argued that the high prices were due to value-based pricing and R&D costs, not to mention the $11 billion it spent to acquire Pharmasset to gain access to sofosbuvir. Value-based pricing considers what a patient would have to pay to treat symptoms of a disease normally. Gilead argued that its HCV drugs save lives and are much cheaper than the lifetime medical costs of treating HCV. 
Chronic hepatitis C can cost an average of $10,000 to $30,000 a year to treat by monitoring liver function, antiviral medications and potential for complications like cirrhosis and fibrosis.
If cirrhosis of the liver forms, medical costs could range from $30,000 to $70,000 a year and incur a need for a liver transplant. Liver failure costs could range from $50,000 to $100,000, which includes intensive care, medications and potential liver transplantation.
A bargain at $84,000
Gilead argued that paying $84,000 to $95,000 to alleviate future medical complications and costs makes the pricing seem like a bargain. The company stated, “The price of Gilead’s hepatitis C treatments reflects the significant clinical, economic and public health value of these drugs, and is comparable to, or in many cases less than, the cost of older, less effective regimens.”

Too good for its stock price
Incidentally, analysts downgraded shares due to the drugs being too effective. Since they were curing HCV, it would cut off future recurring revenues after the completed 12-week treatment. 
Gilead’s Sovaldi and Harvoni revenues peaked at around $19.1 billion several years after launch and have been on a downward trajectory, falling to about $2.4 billion in HCV drug sales in 2022.
Price drops
The cost of Gilead’s HCV drugs didn’t fall much, even with competition and generics. The current price of Harvoni depends on your insurance plan, pharmacy pricing and discounts and coupons. 
A 28-day supply (4 weeks) costs an average of around $32,251 through GoodRx Holdings Inc. (NASDAQ: GDRX), which is $96,753 over a 12-week treatment. The generic version is less than a third of the price, around $10,090, and as low as $3,681 for a 28-day supply or $30,270 for the 12-week treatment.
Gene therapy’s multimillion-dollar costs 
The cost of gene therapy treatments makes Sovaldi and Harvoni look like multi-vitamins. A one-time treatment of Vertex Pharmaceutical’s FDA-approved SCD gene-editing therapy, Casgevy, costs $2.2 million per patient.
Bluebird Bio Inc. NASDAQ: BLUE gene therapies for SCD cost around $3 million each for a single treatment. Zynteglo therapy for transfusion-dependent beta-thalassemia (TDT) costs $2.8 million. TDT patients lack hemoglobin production and require lengthy blood transfusions on average twice a month or 16.8 transfusions annually. The average lifespan for TGT patients is 39 years, with an average medical cost of $5.4 million.
The price of Sarepta Therapeutics Inc. NASDAQ: SRPT single infusion of Elevidys gene therapy for Duchenne Muscular Dystrophy (DMD) costs $3.2 million.
Hemgenix by CSL Behring
A one-time infusion for Hemgenix, an FDA-approved hemophilia B gene therapy treatment, costs $3.5 million compared to the average annual conventional treatment costs of $614,886. 
Hemophilia B is a genetic disease that prevents the body from clotting, resulting in excessive bleeding episodes. The average lifespan of a hemophilia B patient is 77 years, and the total medical costs can exceed $47 million. Hemgenix can reduce the need for blood infusions for eight years, saving the U.S. healthcare system up to $5.8 million per treatment. 

Treating the symptoms
Unlike hepatitis C, there are no definitive cures for SCD, TDT, hemophilia B and DMD. Current gene therapy treatments work to control and minimize the symptoms, which can be drastic. The estimated lifetime medical costs for SCD are around $1.2 million. According to the Muscular Dystrophy Association, annual per-patient costs for DMD treatment are estimated at around $50,953.
Costs will remain high until more competition and manufacturing costs come down, as no generic versions of gene therapy are available. It may boil down to what the Centers for Medicare and Medicaid Services (CMS) and health insurers are willing to reimburse for the treatments. The gene therapy companies have learned some lessons from Gilead Sciences. Value-based pricing can justify the hefty price tags, and the care may be more lucrative than the cure.Before you consider CRISPR Therapeutics, you’ll want to hear this.MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and CRISPR Therapeutics wasn’t on the list.While CRISPR Therapeutics currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys.View The Five Stocks Here Click the link below and we’ll send you MarketBeat’s list of seven best retirement stocks and why they should be in your portfolio. Get This Free Report

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