[gfodor]

in society, we have another large, one-time purchase people often make in which there are special financial arrangements and rules: buying a home. it seems to me that gene therapies (high priced, one-time use drugs) are going to warrant alternative financial instruments. there's absolutely no reason this drug should have failed when the amortized cost over 10 years is less than an inferior product. regardless of the other questions this is a pure market failure by the financial industry.

edit: the downvotes probably assume I mean the patient is going to pay out of pocket. of course not. the insurance companies would be paying. the only inferiority between gene therapies and non-cures is their pricing structure. we invented a solution to this problem thousands of years ago: debt.

[wrong_variable]

The problem is with a house / car / TV / phone you can always reposes it.

[nradov]

We have loans for education even though lenders can't repossess knowledge.

[gfodor]

It just backs out to interest rates commensurate with the risk. Lack of collateral doesn't mean you can't get a loan.

Perhaps the economics wouldn't work, but it sure sounds like nobody tried in this case. What it would boil down to is if the insurance company expected a larger net cost on a traditional drug regimen for the life of the patient, vs servicing a loan at the market rate over N years. Interest rates are still very low so in general debt is seeking out risk.

[ThrustVectoring]

Insurance companies don't cover total health costs over the life of the patient. They cover the next month of health costs, and a certain percentage of their customers churn afterwards. For insurance companies, providing treatment that lasts a longer amount of time can often be a terrible business decision - if the customer switches insurance providers afterwards, then they're essentially subsidizing the insurance company they switched to.

This more commonly happens with prescription quantities. Medication compliance is far better when people can pick up a three-month supply of medication. Insurance companies want patients to pick up one month supply instead, so that they aren't paying for two months of medication for every patient who switches insurance companies.

[gfodor]

Right, so what is necessary is for Gene therapy to have similar financial characteristics to an insurance company as a monthly perscription for a chronic illness. There is no reason this cant be securitized properly, unless a) the lifetime healthcare costs for a person are higher with the therapy than without (unlikely for most chronic illnesses) or b) the interest rate would need to be so high as to make it so. If gene therapy provides a more optimal use of resources and capital than continual therapy for chronic illness than the up-front high price tag nature of it being a problem is an opportunity for someone to come along and make the market more efficient.

[DoreenMichele]

Insurance is how the US deals with health care. It isn't how all countries do it. There are other models and there's no reason we couldn't invent new ones if none of the existing ones work.