Earlier this week, Bluebird  Bio announced it may have a found a way to handle the expected seven-figure cost of its experimental gene therapy: getting customers  to pay on installment. The price of its therapy to rare inherited blood disease is expected to be ~$2 million and the company is proposing to offer the treatment on a five-year installment plan, with each annual payment contingent on its treatment’s continued effectiveness.

If you are expecting outrage from health  insurers, you would be wrong. It turns out that several drug companies and health insurers have been eyeing such an approach as a solution to the high prices of emerging treatments, which could cost $1 million or more. Typically, health plans pay for a drug whether or not it helps the patient. And if Bluebird is successful in pulling this off, the pharmaceutical companies which have been facing increasing scrutiny of high drug prices from patients, doctors, lawmakers and health plans will begin launching these new payment plans in short order.

And this payment will add to the plethora of monthly payments that already put savings at an all time low – student debt payment, cable bill, phone bill, rent or mortgage payment, credit card payment, car payments, iPhone payment, Netflix and the list goes on.

Future Wealth’s View

The fact that drug prices have been creeping up is no secret. In the United States, where drug companies set their prices based on whatever they believe the market can bear, the drug and pharmaceutical companies haven’t held back. Last year, Spark Therapeutics Inc. priced Luxturna, its gene therapy for an inherited vision loss, at $850,000. Alnylam, prices its drugs for rare diseases in the range of $250,000 to $650,000. But, $2 million price tag  is a shocker even to the drug companies. It is almost as if the company is saying – if Apple can price a simple phone for $1000 and offer customers an installment plan to pay for it, lets do the same.

The problem is that acceptance of this model would precipitate all new important treatments for cancer, alzheimer’s, AIDS and others to follow suit. And pretty soon, everyone is going to be on a payment plan for one drug or the other. And is most cases, like student debt or credit card debt, the payment never ends and continues into retirement.

As a result, savings for retirement is never enough. Already, healthcare is one of the biggest concerns for a retiree and adding more monthly installment payments in retirement is worst possible choice. Nick Leschly, CEO of Bluebird Bio must have gotten his inspiration from Gordon Gekko, who famously said “Greed is Good”.