Why a $158,000 Drug With Unclear Benefits Hurts Whole Health System

Price tag for a recently approved ALS drug illustrates broad industry problems. From a report: Like many patients suffering from amyotrophic lateral sclerosis, or ALS -- also known as Lou Gehrig's disease -- Layne Oliff didn't have any time to waste. Even before the drug Relyvrio was approved late last month by the Food and Drug Administration, he has had his own do-it-yourself method: he gets sodium phenylbutyrate in liquid form from a New Jersey pharmacy and taurursodiol online from Amazon. That costs him over $7,000 a year, but he says it has been well worth it because he feels the combination has helped stabilize a disease that often causes death within a few years. Now that the drug combining those two known compounds has been approved in the U.S., the official list price is going to be $158,000 for a year's supply, or over 20 times more than he was spending. While that may be excellent news for Amylyx, which makes the drug and whose shares are up 159% over the past 6 months, the exorbitant price tag is bad news for the U.S. healthcare system. Patients won't be footing the entire bill themselves -- insurers pick up most of the tab, which is finalized after rebates are made by pharmaceutical companies to get the drug covered. And of course making the drug available through the proper channels will be a more affordable and more reliable way for patients to take the medication, especially those who can't afford the out-of-pocket costs Mr. Oliff was able to pay for his unorthodox, but doctor-supervised method. But the jarring price difference underscores just how out of whack drug prices have become in the U.S. Each time a drug is priced up in the stratosphere, it sets a precedent for the next manufacturer to do the same, sending drug costs in an upward spiral with no real ceiling except for public outcry.

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