September 2, 2015

Most of us are more concerned with whether we can cure Alzheimer’s at all, than we are with the cost of curing it. You can imagine someone saying that dementia is so horrible that “it doesn’t matter what it costs” to treat or cure it. Except that it really does matter. Whether it were a […]

How much will it cost to cure Alzheimer’s?

Most of us are more concerned with whether we can cure Alzheimer’s at all, than we are with the cost of curing it. You can imagine someone saying that dementia is so horrible that “it doesn’t matter what it costs” to treat or cure it.

Except that it really does matter. Whether it were a treatment or a cure, if it cost a billion dollars a person, it would matter a great deal. Not only couldn’t we – collectively – afford such an intervention, but no single person – as an individual – could afford it either. Well, alright, there are a few people with those resources, but let’s please be realistic. The bottom line is that expense does matter, to you, to me, to us as a society, whether we pay for treatments via our insurance premiums (health plans) or via our taxes (national healthcare systems). Regardless of how we pay, we’d like to find an effective intervention that we can live with, medically and financially.

At the moment, we have the worst of both worlds: we have a medically ineffective set of “interventions” and a financially disastrous burden that we can’t sustain as the costs grow. Our current “interventions” consist of expensive long-term nursing care and a small group of drugs that have no effect on the course of the disease. We spend a lot of money taking care of people who are sliding toward disability and death, and a fair amount of additional money on what are, effectively, placebo medications. Globally and annually, Alzheimer’s Net estimates that we spend a total of about 600 billion dollars (about 1% of the world’s gross domestic product) on treating Alzheimer’s patients, and that cost is steadily growing (and outpacing both inflation and productivity).

Journals, organizations, and blogs harp on predictions of disaster: we can’t afford to keep spending more and more money on Alzheimer’s care as the world population ages. But what is the alternative and how much would such a therapy cost?

If telomerase therapy could cure and prevent Alzheimer’s disease, the costs fall dramatically while the benefits increase even more dramatically. The benefits are clear, but let’s consider the costs. The first cost we can cut is that of nursing care: if I can care for myself, I don’t need any nursing care, let alone expensive, long-term, full-time care in a nursing home or “assisted care living center”. This removes most of our costs, particularly the costs currently borne by national health care systems (taxes), as well as by private insurance (premiums). The remaining cost – that of medication for treating Alzheimer’s disease – is currently about $10 billion dollars as a global market. While these drugs are not – in comparison with other drugs – all that expensive, part of their cost depends on market size. Not all AD patients are on these drugs, largely because both patients and physicians recognize that their ratio of benefit to risk is small, so why bother spending money on drugs that have risks and no real benefit? On the other hand, if we have a therapy that cures Alzheimer’s and has few risks, then patients would be eager to take such a therapy, which is why telomerase therapy will – on a per patient basis – be quite reasonably priced.

Compare two drugs: one for progeria and one for Alzheimer’s dementia. At any given moment, we estimate that there are about 50 progeric children and about 50 MILLION (or more) Alzheimer’s patients in the world. Now, imagine that we develop a drug whose research and human trials cost 50 million dollars. In order to pay off these costs of development, that would mean that if it only worked for progeria, it would cost a million dollars per progeria patient, but if it were used for all Alzheimer’s patients, it would cost only a dollar per Alzheimer’s patient. In general, the larger the patient population, the cheaper the drug costs per patient. Fifty million patients makes it easy to amortize the costs of development: we spread the costs out and dilute them. Therapy become cheap.

The reality, however, is that there are other costs. Among them are the cost of producing the drug (once you pay for its development) and the costs of administering the drug. In a rough way, production costs also go down as the patient population goes up. There are economies of scale in producing 50 million doses compared to producing only 50 doses. The cost per dose goes way down. On the other hand, telomerase therapy will require a high degree of quality control, so while there will be enormous economies of scale, production will still be expensive in order to be safe and effective. Administration costs (distribution, hospital overhead, professional services, etc.) are less amenable to economies of scale and will be almost “fixed”. In many cases, the costs of administering a drug far outweighs the costs of producing a drug, and this is likely to be true of telomerase therapy.

Even acknowledging the many unpredictable factors, we can come up with an estimate for the cost, within an order-of-magnitude (order-of-magnitude in the scientific sense: not below one tenth and not more than ten times). The cost of producing a single dose of telomerase therapy (ignoring profit, retail distribution, and administration costs) would probably not be much more than it is for other currently available (and ineffective) drugs, having a probable production cost of perhaps $100 per patient. It will likely take 1-3 doses to treat a patient initially, who will then need retreatment every 5-10 years.

If it cures Alzheimer’s, then it’s a good price to pay.

Leave a Reply

Your email address will not be published. Required fields are marked *