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The latest news and information about what's going on with SCI science and research. Brought to you by Sam Maddox, author of the Christopher & Dana Reeve Foundation Paralysis Resource Guide.

What Would Stem Cell Therapy Cost?

I don’t seek out blogs from corporate CEOs but this one came to me via Facebook, a tip of the fedora to Kate Willette, up yonder in Seattle. She found encouragement in a blog by Richard Garr, CEO of Neuralstem, the stem cell company that has a Phase II clinical trial going in ALS, and which announced earlier this year that the same line of neural stem cell have been approved for chronic spinal cord injury. [tp:readmore]

We’ve paid attention to this announcement over the months, expecting the trial to have begun by now (five SCI hospital centers have been lined up). But the company now says look for this trial in 2014. If you want to speculate as to why the delay, I’d suggest looking at how best to avoid the sorry fate of Geron: stem cells in SCI, huge cash burn, no immediate Lazarus effect, epic crash landing. In other words, have the wherewithal to see it through.

Garr likes to quote Emerson and Shakespeare to begin his blogs. In this one, it’s a lyric from Disney's Beauty and the Beast: “Both a little scared, neither one prepared, Beauty and the Beast.”

He makes a case that venture capital is no longer afraid of orphan drugs and small market drug development. VCs have a nose for returns are betting that the little biotechs (like Neuralstem) will reach their intended markets (and profits) with the help of big pharma, which isn’t nimble enough to be innovative but is strong enough to absorb the upstarts. From the blog:

That is a sea change worth noting and trying to understand.  It is important of course to the patients and families who suffer from the thousands of rare diseases which remain untreated; and it is important to Neuralstem because many of our treatments in development are aimed at rare or orphan diseases. Our own experience confirms a noticeable increase in interest in our programs from “big pharma” as we move through our Phase II trial for ALS, an orphan indication. Most (but not all) of the indications we are developing our stem cell therapies for fall into this category.

Small and orphan development upside is good news for spinal cord injury, which, as Garr notes, is not considered a robust market. But as I was reading Garr’s comments, a couple of things came to mind. First, the beast always sets the terms. Garr is not writing an op-ed, he’s addressing his shareholders, who are no doubt happy to hear him say that no matter how little the markets are for the company's drugs and products, there are clear and profitable exits.

The other thing I thought was, what if the Neuralstem ALS stem cell therapy gets approved, or down the line, what if the spinal cord stem cells are shown to be effective in returning even a little bit of function in chronic patients -- how much would it cost a person to get these therapies? Garr says there are trends toward price control in all of pharma, but not necessarily in small or orphan indications:
Almost every society across the globe is moving towards some form of price controls on medicines, and the move towards generic drugs and soon generic biologics is adding even more pressure on pricing. Rare disease therapies are inherently less affected by both of these trends. Because patient populations are small, the overall cost of treatments doesn’t tend to “move the needle” on insurers (private or government). Also, since the R&D is as expensive and difficult in small indications as would be for larger indications, allowance of higher prices is considered a sort of “incentive” to move science to help these communities which would otherwise be ignored.

So, smaller scale markets, Garr seems to say, are insistent but aware they will have to pay big prices. So how much would it cost to get stem cells in the U.S.?

Heart transplants, as an example (2,500 or so a year), cost about $1 million each. That’s way too high for cell therapy. $100,000 for stem cells? That may be too cheap; there are already approved cancer drugs, no surgery involved, that cost over $100k a year. How about $200,000? Actually, how about north of $500,000? The Wall Street Journal reported last June that a stem cell treatment in Japan might run 50 million yen, or about $512,000.

That’s probably on the high side. But it does raise a question that eventually has to be faced: when the therapies arrive, how will they be paid for? We remain a little scared, and not prepared -- will Beauty break the Beast's spell, as in the fairy tale? Let's see how the trials go and then deal with the reimbursement.
Posted by Sam Maddox on Oct 31, 2013 10:58 PM US/Eastern

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