Will Profit Motive Be The First Big Test For RTT Legislation?

By Ed Miseta, Chief Editor, Clinical Leader

One of the first lessons I learned taking an economics class was the law of unintended consequences. In the social sciences, the law states that the actions of people—and especially of governments—will often have effects that are unanticipated or unintended. In other words, the outcomes of a particular action are oftentimes not the ones that were foreseen or expected. The term was made popular by American sociologist Robert K. Merton.

The law seems to hold true time and time again. Case in point: The Right-To-Try (RTT) legislation recently passed by the House and Senate and signed into law by President Trump.

The motives of those advocating for RTT were sincere: If patients are dying of an illness, allow them the option of trying all experimental medicines to see if one might help save their life. Having FDA involved in the decision, they argued, could slow the process and possibly keep needed medicines from getting to patients. Worst case scenario, it could cost some patients their lives.

There were many who opposed the legislation. Those groups argued the FDA quickly and efficiently reviewed all requests for medicines under investigation. They felt removing FDA from the process could be harmful to patients, and noted numerous groups, including patient advocacy organizations, ASCO (The American Society of Clinical Oncology), and the Working Group on Compassionate Use and Pre-Approval Access (CUPA) at the New York University School of Medicine (NYUSOM), all opposed the legislation. An additional concern was the fact that 34 states already had RTT laws in place. Would a new, national law create confusion for patients and organizations?

But there is one more thing that groups opposed to RTT were concerned about: The cost of experimental medicines, and who would pay for the treatments. A company cannot be forced to provide a treatment to a patient requesting it. Even if it decides to do so, it does not have to do so for free. So if an experimental treatment has a price tag of thousands of dollars, who will pay for it? The government? Insurance companies? Treatment centers? The patients themselves? 

BrainStorm Puts RTT To The Test

When politicians passed the RTT legislation, I’m sure they envisioned patients, care givers, and physicians embracing the receipt of life saving medicines. I’m sure they did not envision patients being duped by worthless drugs, or paying thousands (or tens or hundreds of thousands) of dollars for treatments that don’t work. But that is where the law of unintended consequences comes into play. 

BrainStorm Cell Therapeutics is a small biotech company developing a treatment (NurOwn) for the deadly condition known as ALS, or Lou Gehrig’s disease. The company recently announced it could make its treatment available to patients, but Michelle Cortez, writing for Bloomberg, notes it won’t be cheap. BrainStorm’s CEO, Chaim Lebovits, notes private companies cannot be nongovernmental organizations that provide care to impoverished countries. While the price for the treatment has not been worked out, Lebovits point to cell therapies used to treat cancer that cost $300,000.

Did profit motive not cross the minds of those who wrote the RTT legislation? Or if it did, was the concept thoroughly discussed? Did the writers envision the process of getting treatments to patients to be a truly altruistic endeavor for companies, simply because the government gave the “all clear” for patients and companies to bypass the established approval process?

New Treatments Cost Big Money

As Cortez correctly notes, much of the innovation in medicine is occurring in small pharma and biotech companies, not Big Pharma. Those companies do not have the deep pockets to make their treatments available to patients at no charge. BrainStorm’s treatment is also not easy to administer. It is unique to each patient, and involves extracting stem cells from bone marrow. Similar therapies that were recently approved carry a price tag of over $350,000.

Lebovits noted his company would only seek a modest profit, not an amount that would exploit the need and desperation of patients. But what BrainStorm describes as a modest profit, others will most certainly describe as price gouging at the expense of the patient. If pricing becomes a viral discussion, no executive would want to be in the position of Lebovits.

To be clear, BrainStorm’s treatment does not cure ALS. It has also not been proven to reverse the underlying cause. The 48 patients who have tried it thus far appeared to have a positive response that did not last.

While opponents of the RTT legislation note it does not explicitly mention pricing, the office of one of the bill’s authors states companies can only charge for a drug’s direct costs. But if that’s the case, then what incentive does a company have to provide the treatment to patients?

All of this makes you wonder what will be the end result of RTT. Right now it is too early to say. RTT proponents will say the legislation was written for companies to be altruistic with their treatments. Companies will say there needs to be an incentive for them to provide it. FDA has not yet decided how it will implement the new law. Stuck in-between will be the possibly thou-sands of patients who have to decide whether to pay $300,000 for a treatment they don’t know will work.

STATNews has already called the actions of BrainStorm “extremely dangerous and potentially exploitive.” It notes the legislation could prompt unscrupulous drug companies to simply bypass clinical trials and the FDA and take unproven and unapproved treatments directly to patients. “Snake oil” treatments could again be sold to desperate patients in need of a cure. That, of course, is one of the reasons why so many opposed the legislation in the first place.

Unfortunately, BrainStorm will not be the first opportunity for us to see the new RTT legislation in action. The mild media storm that immediately erupted over BrainStorm’s marketing plans has already caused the company to rethink its position. On June 26, 2018 the company announced that after careful evaluation, it will not make NurOwn available to patients under the new law. 

I’m sure other companies have been watching this situation unfold. Even in medicine, the effects of the law of unintended consequences cannot be suppressed.