Kaftrio for Cystic Fibrosis
Health Economics: A Case Study of Kaftrio for Cystic Fibrosis
Kaftrio is a fixed-dose triple combination therapy containing elexacaftor, tezacaftor, and ivacaftor, used in the treatment of cystic fibrosis (CF). Clinical trial results have been excellent, and the drug has been hailed as a revolutionary innovation in CF management.
The Deal with HSE
In 2017, the HSE and pharmaceutical company Vertex agreed on a deal worth €400 million to provide medications including Kaftrio for CF patients. The first approval for reimbursement of Kaftrio for CF in Ireland was in 2020.
Opportunity Cost
The high price of the medication poses a financial dilemma relating to reimbursement. The National Centre for Pharmacoeconomics estimated the incremental cost-effectiveness ratio (ICER) of Kaftrio to be €263,202/QALY, concluding that this was not cost-effective.
Elasticity
Life-changing medical treatments like Kaftrio are highly price inelastic commodities. This inelasticity offers a significant advantage to pharma companies like Vertex in negotiations. A case study revealed prices far higher than needed to cover costs.
Externalities
Campaigning played a major role in Kaftrio’s approval. Active campaigning from CF Ireland, parents, and other groups piled pressure on the government to provide treatment to the ‘Kaftrio 35’. In March 2023, an agreement was reached for an undisclosed sum.
References
- European Medicines Agency – Kaftrio
- Nichols DP, Paynter AC, Heltshe SL, et al. Clinical Effectiveness of Elexacaftor/Tezacaftor/Ivacaftor in People with Cystic Fibrosis: A Clinical Trial. Am J Respir Crit Care Med. Mar 01 2022;205(5):529-539. doi:10.1164/rccm.202108-1986OC
- Independent.ie – Row between cystic fibrosis drug maker Vertex and HSE over cost leaves children in limbo
- Oireachtas – 24th November 2020
- National Centre for Pharmacoeconomics – The cost-effectiveness of ivacaftor/tezacaftor/elexacaftor (Kaftrio®)
- Independent Review of the provision of Child and Adolescent Mental Health Services (CAMHS) in the State
- Hollis A. Orphan Drug Pricing and Costs: A Case Study of Kalydeco and Orkambi. Healthc Policy. Aug 2019;15(1):70-80. doi:10.12927/hcpol.2019.25937
- CF Ireland – Campaign for Kaftrio
- Irish Times – Cystic fibrosis drug for 35 children approved after lengthy delay caused by price dispute
