Prodigious Pricing and Stem Cell Treatments: Implications for the California Stem Cell Agency

The most widely read item in the last 10 years on the California Stem Cell Report is one that deals with the cost of a possible stem cell treatment.

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The piece contains a $512,000 figure and has chalked up 10,714 page views as of this evening. It deals only with a potential treatment in a fully legal and medically acceptable situation. The item is also nearly two years old. The $512,000 number is likely to have been modified by the researchers involved.

Now comes an item by UC Davis stem cell researcher Paul Knoepfler, who has put together a survey of prices of stem cell “treatments” that are being offered around the world. The costs are for procedures available largely outside established medicine with its accompanying government certification and testing.

Knoepfler reported today on his blog that American clinics – non-FDA approved – run about $10,000 per procedure, with more than one treatment usually described as necessary. Outside of the United States, the procedures run up to $100,000.

Knoepfler wrote,

“Whether inside or outside the US, insurance does not cover the costs of these potentially dangerous, unproven treatments.”

He noted that high profits are associated with the procedures. He said,  

“Part of the way that clinics cut corners to boost their profits is by not following FDA regulations, putting patients in danger. Clinics typically do not do pre-clinical studies to get evidence of safety and efficacy before starting to sell their offerings to patients. Clinics also do not include sufficient follow up in the cost of the treatments. They do not publish their data to get peer review and feedback. They often do not have GMP compliant facilities or devices.”

Knoepfler concluded,

“Of course other costs to patients going to dubious clinics, sometimes not considered, include the price of false hope, potential injury due to dangerous stem cell ‘treatments,’ possibly being excluded from a real clinical trial in the future and injury from deferring other arguably more real treatments.”

The high readership on the 2013 cost item on the California Stem Cell Report is likely due to readers who are considering some sort of stem cell procedure.  Knoepfler will also likely see a similar trend.

The strong interest in stem cell costs is something for the California stem cell agency to consider as it invests in clinical trials. Obviously the expense is of considerable concern to those not ensconced within the stem cell community, where the focus is on a euphemism called "reimbursement," shorthand for making a handsome profit.  Stem cell insiders sometimes shrug off the possibility of a severe, negative kickback on prices. 

But it has already happened in other areas of medicine. A physician protest involving the cost of a particular cancer treatment received national attention in 2013. The article about it in the New York Times received 500 reader comments.  

Obviously no stem cell therapies will reach the marketplace if they do not offer the potential for profit. Nonetheless, if one of the California agency's trials is successful but also carries a prodigious pricetag, California taxpayers who have financed the agency are likely to look askance at the agency’s work.

Prieto: Cost of Stem Cell Therapy Could Be 'Pretty Good Bargain'

One of the directors of the $3 billion California stem cell agency this week commented on the likelihood of very high costs for therapies that the agency and others are pursuing.

Francisco Prieto, a Sacramento, Ca., physician who has been on the agency’s governing board since 2004, was responding in connection with this Oct. 8 item on the California Stem Cell Report: “Rosy Outlooks, Stem Cell Therapy,Stunning Costs.”

Prieto said in an email,

“Like any new transformative technology, I expect that stem cell treatments will start out quite expensive and (hopefully) decrease as they become more common and the cost of producing them drops. If some of them are cures (as opposed to treatments), then that cost needs to be weighed against the lifetime cost of treatment that would now be eliminated, as well as the gain in productivity and years of life. Even before you start to factor in the cost in human suffering, I predict they will start to look like a pretty good bargain.”

Cost of a Stem Cell Therapy? An Estimated $512,000

(Editor's note: Updated figures on costs can be found in this 2017 item.)

The likely costs of potential stem cell therapies and cures receive almost no attention in the media as well as publicly from scientists and the biotech firms.

Usually any public discussion is obliquely framed in the context of “reimbursement,” as if industry is owed something instead of making a business decision about what will make a profit. Euphemisms and jargon cloak unpleasant realities such as astronomical patient costs. But what reimbursement really involves are, in fact, pricing decisions and profit margins along with lobbying campaigns for inclusion of therapies in normal coverage of health insurance and Medicare. 

And today a singular figure – $512,000 for one stem cell treatment – appeared in the Wall Street Journal . The story by Kosaku Narioka and Phred Dvorak dealt with what would be the first-ever human study of a treatment that uses reprogrammed adult stem cells.

They reported that the study received preliminary approval on Wednesday from a key panel of the Japan Health Ministry. The treatment involves a form of age-related macular degeneration, which has also been targeted by the California stem cell agency with different approaches.

Buried deep in the Wall Street Journal article, with little other discussion, was this sentence:

“One eventual obstacle, even if tests go well, could be cost: (Masayuki) Yamato (of Tokyo Women's Medical University) says initial estimates for the treatment run around ¥50 million ($512,000) per person."

The subject of costs for potential stem cell treatments has rattled around in the background for years without much deep public discussion. One reason is that high costs of treatments are controversial and can trigger emotional debate. Another reason is that it is very early in the therapy development process and estimates are not likely to be entirely reliable.

A few years ago, however, the California stem cell agency commissioned a study involving costs of stem cell therapies. The UC Berkeley report said,

“The cost impact of the therapy is likely to be high, because of a therapy’s high cost per patient, and the potentially large number of individuals who might benefit from the therapy. This expense would put additional stress on the Medicare and Medicaid budgets, cause private insurance health premiums to increase, and create an incentive for private plans to avoid covering individuals eligible for a therapy.”

The findings did not seem to be exactly welcomed. The agency sat on the 2009 study for seven months until it was uncovered by the California Stem Cell Report in April 2010. Then the agency was careful to say that the study did not reflect the view of CIRM management or board leadership.

Their wariness of being out in front on the issue could be well-advised. The pharmaceutical industry received some unpleasant attention this spring when more than 100 influential cancer specialists from more than 15 countries publicly denounced the cost of cancer drugs that exceed more than $100,000 a year.

Nonetheless pricing is critical to both patient accessibility and therapy development. If companies cannot make a profit on a possible therapy, it is virtually certain not to appear in the marketplace.

While the subject remains in the background, it does not mean there is a lack of interest. The copy of the Berkeley stem cell cost study that was posted online by the California Stem Cell Report has been read 11,701 times since it was made available in April 2010 on scribd.com.

(For a 2015 look at costs for non-government approved procedures, see this item.)

A copy of the Berkeley study can be found below.

Stem Cell Therapy Costs by DavidJensen

Stem Cell Snippets: McGee, Lansing, Prinz

Pricing Stem Cell Cures – The California stem cell agency is still wrestling with anticipated prices of stem cell therapies. Not directly, mind you. It comes under the topic of intellectual property. Glenn McGee, director of the Alden March Bioethics Institute, wrote recently about a drug pricing issue that could resonate in the future – if not currently -- with CIRM. The issue involves Merck and its cervical cancer drug, Gardasil, which he said is priced out of the reach of millions of women. McGee cited a report that Merck has spent $48 million in the last 10 years on lobbying. He wrote:

"If the company can afford to spend huge amounts convincing legislators the vaccine is something every woman deserves, it can afford to take its own advice, and reduce the price."

Variations of McGee's argument are certain to surface in the future involving stem cell cures. Plus they will be freighted with heated rhetoric about how those cures owe their very existence to funds provided by California taxpayers. Something for the good burghers on CIRM Oversight Committee to consider.

Another Presidential Search – Sherry Lansing, a member of the Oversight Committee for the California stem cell agency, has added more to her plate. She will serve as vice chair of the search committee to find a new president for the University of California. As a CIRM director, she is already involved in the search for a new president for CIRM in addition to her other many philanthropic activities. Incidentally, the current UC president earns $405,000 annually, which is apparently not enough to attract a CIRM president. However, the UC position has other benefits, but may or may not involve less aggravation than the CIRM post.

Prisons vs. Stem Cell Research -- California attorney Kristie Prinz wants to know. Writing on her California Biotech Law Blog, she raises a fundamental question about the $3 billion California stem cell agency,

"One cannot help but wonder if the money couldn't have been better spent elsewhere, even if you are a supporter of the biotech industry and of the concept of the research generally. Our schools, health care, keeping drugs off the street, illegal immigration, crime, overcrowded prisons, and terrorism are just some of the many issues facing this state that could have also been better funded with the same money. Did we as taxpayers make a good decision when we voted to use the funds instead on stem cell research? It's a thought-provoking question that all Californians should consider."