The promise of regenerative medicine is that altering the course of disease will eliminate the need for daily therapies, reduce hospitalizations and avert expensive medical procedures, thus enabling patients to lead healthier and more productive lives.

In turn, analysts estimate that the availability of regenerative medicines will decrease overall healthcare costs for patients and create positive economic impacts through increased productivity and healthcare effectiveness.

Regenerative medicine is not just a future hope, it is a reality today. Cell-based therapies and products are on the market now and, as highlighted elsewhere in this report, many more are in advanced stages of being tested in patients. These products provide insight 
into what the future holds in terms of patient health and economic impact.

Cell-based replacement skin products from two companies, Advanced BioHealing (now owned by Shire) and Organogenesis have been available for several years to treat diabetic foot ulcers. Over 18 million patients suffer from diabetes in the U.S. alone, and each year nearly 140,000 of those patients will see a wound care specialist for a diabetic foot ulcer that results from poor circulation. The consequences of not effectively managing the wound include chronic infections, laborious cleaning of the wound and in the worst cases, amputation of the foot. While there are drugs to fight infection, no drug available today will help the skin to grow back. Engineered skin products, Dermagraft and Apligraf, are the only therapies that actually accelerate healing, effectively closing the wound and preventing infection and other dire consequences.

Understanding and Measuring the Potential Economic Benefit

Throughout the health care system, the growing question is whether our society can afford innovative medical advances.

Clearly, it will be the responsibility of clinical researchers, payer organizations and companies to demonstrate clinical and economic value for new therapies. The discipline of understanding the cost-benefit trade-offs associated with new treatment alternatives is known as pharmacoeconomics. For example, a patient with diabetes that pricks her finger eight or more times a day and must endure multiple insulin injections to maintain proper blood sugar levels may one day be treated with beta cells that replace her own dysfunctional pancreas. Pharmacoeconomic analysis will determine which of these approaches is most clinically and economically effective, capturing such factors as the downstream costs associated with managing heart disease, kidney disease, loss of sight and limb amputations that result from poor control of blood sugar. Taking this logic one step further, analysts assess the downstream impact of a new treatment on patient quality of life and compare it with the incremental cost of treatment over time. For example, living with reduced vision, kidney disease or an amputated limb would all significantly reduce the quality of life value for a diabetic patient. While determining intermediate values to represent states of partial health is necessarily an approximation, the methodology allows comparison of different treatment approaches and different diseases. When such data are available, it is possible to develop a reliable set of outcomes and economic scenarios, consider trade-offs and make better decisions regarding the value of a novel therapy.

Emphasis on economic justification for patient care is evident across all aspects of healthcare, from reimbursement decisions by CMS, to payers demanding data that support treatment pathways, to large payer systems that collect and analyze their own data. Companies are incorporating pharmacoeconomic assessment tools and decision analysis processes earlier in product development. More frequently pivotal clinical studies are designed to capture cost data as well as clinical outcomes. Every advanced cellular therapy developed today will undergo some level of pharmacoeconomic analysis.

Cellular Therapies Cost – Benefit Arguments

By applying increasingly sophisticated pharmacoeconomic tools, the cost- benefit of cellular therapies can be assessed, validated and justified.

The advantages of these therapies are clear as long as pharmacoeconomic benefits are adequately detailed. For example:

Complete Solution For Complex Physiologic Processes: Heart tissue damaged by atherosclerosis, chronic ischemia or a heart attack is weak and ineffective. Drugs can make the heart beat stronger and can reduce workload by controlling blood pressure, but even our best tools are frequently overwhelmed, and patient health declines quickly. Neither is
a heart transplant the perfect solution, given the necessary immunosuppressive regimens required to prevent rejection, the high cost of complicated surgery and the limited supply of donor organs. However, cell-based therapies that rescue and heal infarcted heart tissue could adequately address the multifactorial demands on a compromised cardiovascular system
and prevent the decline in functional capacity resulting from the loss of heart tissue.

Dramatically Reduced Morbidity In Chronic Diseases: Complications from poor control of blood sugar leads to extensive morbidity in diabetes patients. Testing methods have improved and better forms of insulin have contributed to a higher life expectancy, but adverse consequences are a major risk for a large number of Type 1 and Type 2 diabetes patients. Studies show that a cellular approach may allow for near-natural response to peaks and troughs of insulin demand, providing better glycemic control and dramatically reducing the downstream consequences of chronic diabetes. Additionally, cell-based therapies are proving effective treatments for diabetes complications such as diabetic foot ulcers, an ischemic disease that often leads to amputation.

Improved Quality Of Life: Promising clinical research of retinal cells is underway that has potential to restore sight to those with age- related macular degeneration (AMD) and other incurable disorders of the eye. It is possible through pharmacoeconomic tools to compare the cost benefit of scenarios in which a patient is either limited by blindness or experiences restored vision. In such cases, quality of life
is viscerally understood and one can easily imagine a favorable evaluation of a therapy capable of restoring vision.
Cell-based therapies have the potential to deliver dramatic clinical benefits and address important unmet medical needs. It is possible to translate clinical improvement into a robust assessment of the economic benefit derived from superior clinical outcomes. With pharmacoeconomic analysis, companies, payers and policy makers will be able to accurately assess long-range cost benefit trade-offs for regenerative medicine products compared to traditional therapies, providing a level playing field for overcoming concerns about affording innovation.

Source: Alliance for Regenerative Medicine.

Economic Impact of Health Research in Missouri

Investment: Funding sources for overall research and development (2008)

Source of R&D Funding

Investment

State Rank

Federal Government

$676,000,000

27

Industry

$2,857,000,000

20

Universities

$223,000,000

16

Total

$3,756,000,000

26

Source: Calculated from National Science Foundation, Science & Engineering Indicators, 2012 


Population (2011)

 

Residents

State Rank

Population, June 1, 2011

5,988,927

18

Source: U.S. Census Bureau, 2010 Census Data


Economic Impact: Statistics for research-driven health industries (2008)

Industry

Employment

Annual Salary

Pharmaceutical

5,080

$70,222

Medical Device

4,688

$44,845

Research, Testing, and Laboratories

13,259

$93,953

Overall Private Sector

2,285,271

$40,712

Source: Battelle and Biotechnology Industry Organization (BIO), BIO State Bioscience Initiatives, 2010


Highlights from local economic impact studies

United for Medical Research’s 2011 study, An Economic Engine, shows that in 2010, NIH invested $493,000,000 in Missouri, producing 7,820 new jobs.

According to the most recent BioEnterprise Midwest Healthcare Venture report, in 2010 over $19,000,000 was invested in Missouri’s biotechnology companies.

The Association of American Medical Colleges reports that the member medical schools and teaching hospitals in the state had a combined economic impact of $11.6 billion and atotal employment impact of 76,500 in 2008.

Every dollar from the state to the University of Missouri System generates $5 in annual operating revenues. The system employs nearly 26,000 people with a total payroll of $940 million.

The Center for Emerging Technologies in St. Louis began with an initial investment of $27.1 million. The incubator drew in $719 million from outside investment and created26 companies and 300 knowledge-based jobs.

In 2004, the University of Missouri-Columbia generated $1.93 in the Missouri economy for every dollar spent by the University. The University had a total economic impact of $3.7 billion on the state and supported 68,000 jobs.

In FY 2006, Washington University in St. Louis had a total economic impact of $2.2 billion on the local economy and directly employed 12,400 people. The University received $546 million in research funding, more than 80% of which came from federal sources. This funding supported about 12,000 jobs.

The Lewis and Clark Discovery Initiative invests in improvements to public higher education institutions in Missouri and is expected to generate $22 for every dollar invested.

Source: Research America