The Treatment for Steve Borsch

What happens when you discover that there is a virtually guaranteed, life-saving or life-prolonging new drug — made specifically to target the exact genetics of you, your child, your spouse, or a best friend — but it costs $600,000 or $1,000,000 dollars a year?

Your health insurance company and Medicare will have to turn you down, that’s what. 

Let me tell you a quick story about my first exposure to a strategic-level thinker who was with an organization already way out in front when thinking about this problem. They already knew that this type of genetic medicine (also known as personalized or precision medicine) would change the future of healthcare…and maybe not in a good way if not affordable.

In the year 2000 I led a sales effort at the web content management company Vignette, working to close a deal with UnitedHealth Group (UHG) and met one such strategic-level thinker. UHG’s information technology (I.T.) group had a CEO who was seeking an enterprise-wide layer that could sit on top of all of their business systems and put them online as websites. Since this was a multiple-million dollar deal, I brought in my CEO to meet with UHG’s I.T. group CEO to finalize all the details.

At that meeting my CEO excused himself for a bathroom break and I was left to talk with UHG’s I.T. CEO. Making small talk I asked him, “With respect to technology, what keeps you and your senior level colleagues up at night?‘ His response was “the treatment for Steve Borsch.”

Chuckling I said “No seriously…what does keep you up at night?” He again emphasized, “The treatment specifically for you.” That provocative leading statement then launched us in to a discussion about the mapping of the human genome, customized treatments for a specific individual which would arrive within 10-15 years, and how those customized treatments — if mandated by Congress to be paid for by health insurance companies — would absolutely put those health insurance companies out of business!

It was certainly exciting when the human genome was sequenced for the first time. The promise of genetic medicine — which would be targeted to an individual’s exact genetics — might be able to “fix” just about any medical ill facing any of us. The reality is that it just might fix previously untreatable ills, but at what cost and who will pay for it?

Who Will Pay for Your Personal Genetic-based Treatment?

This morning’s Wall Street Journal had an article about The Million-Dollar Cancer Treatment: Who Will Pay? (subscription required) which was exactly what that UHG I.T. CEO was describing 18 years ago:

“The emergence of genetics-based medicines is pushing the cost of treating certain diseases to new levels, forcing hospitals and health insurers to reckon with how to cover total costs per patient approaching a million dollars.

The therapies deliver new genes or genetically altered cells to tackle some of the hardest-to-treat diseases, including in children. They come at a high price: Novartis AG listed its newly approved cell therapy for cancer at $475,000, while Gilead Sciences Inc. priced its rival drug at $373,000.”

Stop and think about this for a moment. You go in to the doctor with your 3 year old toddler and discover a rare cancer that will certainly kill your child before the age of 5.

The medical team sequences your child’s genetics and discovers there is a genetics-based drug that could be individually modified for your child and would give them a 75% chance to live a full life. Oh…but the treatment will be over 10 years at a cost of $600,000 per year!

Multiply that by 100 children in your community receiving that kind of treatment for that same cost which would total $60 million per year or $600,000,000 over ten years! There is no way that any health insurance company, especially one covering multiple States, could ever afford this sort of expenditure….nor could the U.S. government ever afford to cover it all.

While the promise of advancements in genetics and new technologies offer hope and promise galore, paying for that hope and promise is going to require some pretty serious analysis and discussion over how we use it, who can get it, and how it is paid for without going broke.