Not sure if this has been posted before but if it hasn't will...

Not sure if this has been posted before but if it hasn't will give an idea of what we asked back in 2012 $200,000) to treat aGVHD in Canada. It may have been a bit much as it didn't end up going any where for whatever reason but I know I would pay it out for my family.

I think after reading this article its important to keep in mind that we are treating people on deaths door with no other option so a smaller population, which means maybe we don't need to worry about manufacturing the large volumes people on here often talk about.

http://busaconsultingllc.com/scsi//organelles/the_next_stem_cell_controversy.php

The Next Stem Cell Controversy: Pricing

July 15, 2013

If you think that the long history of controversies surrounding stem cells has been brutal (the ethics of embryonic cell lines, occasional scientific misconduct, the therapeutic cloning debate, deaths and disappointments from medical tourism, and most recently the press for deregulation of autologous therapies to name but a few), just stick around -- because you haven’t seen anything yet. Recent events suggest that as companies begin to deliver their products to the clinic some of their pricing strategies may ignite a firestorm of controversy.

At first blush, the healthcare economics of tomorrow’s stem cell therapies have always seemed compelling. Their value proposition rests largely on their (as-yet unproven) ability to cure degenerative diseases and chronic conditions, rather than merely treat their symptoms and complications. Remove the need for lifetime care for many of today’s most devastating medical conditions and the high cost of healthcare should plummet (or so the argument goes).

It’s an argument that stem cell leaders seldom miss an opportunity to repeat in public. Witness, for example, the industry’s trade group (the Alliance for Regenerative Medicine, or ARM) and its glossy 2013 annual report, which devotes 3 full pages and 14 charts and graphics to remind us that the high cost of medical care is an increasingly crushing burden on our economy. "The potential savings from regenerative medicine treatments for the United States alone" the report claims, "in terms of reducing the direct costs associated with chronic diseases, have been estimated at approximately $250 billion a year."

Despite such assertions, the question of stem cells’ potential to reduce healthcare costs is, today, a moot point -- because we still have no idea what tomorrow’s stem cell therapies will cost. It’s pretty tough to calculate a product’s savings potential when you don’t know its price.

But as the first few stem cell therapies inch ever closer to the market, that ignorance is beginning to lift. And what we’re glimpsing as the fog disperses isn’t encouraging. Brace for impact: here comes the great pricing controversy.

Fittingly enough, the opening salvo in this new controversy has been fired by Osiris Therapeutics. In May of last year Osiris made history by receiving the first-ever national regulatory approval, from Health Canada, to market a stem cell drug: Prochymal®, the company’s version of allogeneic bone marrow-derived mesenchymal stem cells. Based as it was on "only preliminary evidence" for the therapeutic value of Prochymal, that approval was restricted to just one very limited indication -- the management of acute steroid-refractory Graft versus Host Disease (aGvHD) in pediatric patients, a frequently lethal complication of bone marrow transplants for which no other approved therapy exists.

This is, at best, only a miniscule market opportunity for Prochymal: according to Health Canada the incidence of pediatric aGvHD in Canada is just 50 cases per year (although there is always the potential -- hopefully limited -- for some off-label use by physicians once the product reaches the market). Still, the historic nature of this approval (as well as a similar approval shortly thereafter by New Zealand) captured investors’ imaginations, sending Osiris's share price rocketing over 160%.

Despite the company’s initial suggestion that Prochymal could reach Canadian clinics by the end of 2012, today it is still not yet marketed there, as Osiris continues to wade through the maze of Canada’s pricing and reimbursement approval process. In its November 2012 earnings conference call the company’s CEO, C. Randal Mills, delivered some seemingly good news on that front:

"During the quarter, Osiris met with reimbursement officials in Ottawa about pricing guidelines for Prochymal. The process consisted of an extensive review to identify potential treatments for the management of GvHD that could serve as a comparator for Prochymal. However, the conclusion was that there were no comparators for Prochymal in this indication and as a result the sponsor is permitted to set the price in the marketplace based on its own risk-benefit assessment."

In other words, Osiris was free to name its own price for Prochymal in the normally highly regulated Canadian market. Canada had dealt Osiris four aces, enabling it to go all-in on Prochymal’s commercial debut.

Indications are that the company fully appreciates the strength of its hand and intends to play it for high stakes. During the company’s most recent (May 7) quarterly earnings call Mills, responding to an analyst’s question, dropped a revealing but little-noticed bombshell:

"We have presented all of the information we needed to the Patented Medicines Pricing Review Board, which is at the national level in Canada. We are now on to the provincial level in Canada [....] From a pricing standpoint, we're looking at around $200,000 for a course of therapy in the pediatric setting."

Surprisingly, Mills' comment has gone publicly unremarked so far, despite the fact that, at $200,000 for a course of therapy, Prochymal should instantly qualify for Forbes’ list of the world’s most expensive drugs, making the $93,000 price tag for Dendreon's Provenge® (an autologous cell-based prostate cancer therapy) look puny in comparison.

Judging from Mills’ careful use of the qualifier "in the pediatric setting," even $200,000 may not be Osiris’s final bet. Like most drugs, Prochymal for aGvHD is dosed by body weight, raising the possibility that a course of therapy in the adult setting could cost perhaps $400,000 or more. And recall that this is Canadian drug pricing, which (according to Canada’s Patented Medicine Prices Review Board) averages just 60% of U.S. pricing over a wide array of patented drugs. Might a course of therapy for an adult in the U.S. (assuming Osiris ultimately receives marketing approval there) thus price out at almost $700,000? If that seems preposterous, consider Alexion Pharmaceuticals’ Soliris® (the world’s most expensive drug, according to Forbes), which costs over $400,000 per year.

Of course, anything beyond Mills’ own words is mere speculation at this point, and even those words should perhaps be taken with a grain of salt. It may be that this $200,000 figure was just a trial balloon to test the market’s reaction (although, judging from the lack of public outrage to date, he may actually have aimed too low). Or it may just be a negotiating strategy, given that Mills has stated that Osiris is "in talks with multiple partners for the further development and distribution of Prochymal. Our goals here are to seek a partner with the commitment and the resources necessary to capture the full value of this product." Nothing quite says "full value" like the prospect of a high six-figure price tag per patient.

Prepare for a controversy the likes of which the stem cell industry has never before seen if Osiris runs with this pricing strategy. Patient advocates would certainly portray the company (and, by extension, the industry) as holding a gun to desperate patients' heads, and point out (correctly) that the stem cell industry is built on the foundation of billions of dollars of taxpayer-funded academic research. Healthcare economists would decry the precedent that the company's pricing strategy establishes, and its likely influence on the cost of future stem cell drugs. Academic scientists expert in growing bone marrow-derived mesenchymal stem cells in the lab (and there are many) would point out that Osiris's cost of goods sold (at least in terms of major raw materials such as culture medium and vessels) is but a miniscule fraction of its selling price. While many Osiris shareholders may cheer, some (aware that some competing products fast approaching market could be much less expensive to manufacture) may conclude that the company has over-reached and left itself dangerously exposed to competition.

The company might well respond to all of this (at least if pharma history is any guide) by pointing out the high cost of serving such a tiny patient population and the extraordinary investment required to develop such a revolutionary new therapeutic technology. But on the latter point, at least, it might find itself on shaky ground, given Mills' frequent public statements that Osiris has invested on the order of $500 million in Prochymal’s development -- a drop in the bucket really, in a world where conventional wisdom holds that the typical small-molecule drug costs on the order of a billion dollars to develop.

Inevitably, hard-to-answer questions would be asked again and again. What happened to the often-repeated assertion that allogeneic therapies (such as Prochymal) offer economies of scale impossible to achieve with autologous therapies? How can stem cells save lives and transform healthcare if they are made unaffordable? Will stem cell-based cures be luxury items available only to the 1%?

The debate over a six-figure price tag for Prochymal would inevitably generate more heat than light, and would be likely to burn everyone it touches -- perhaps, especially, Osiris itself.