The emergence of genetics-based medicines is pushing the cost of treating certain diseases to new levels, forcing hospitals and health insurers to reckon with how to cover total costs per patient approaching a million dollars.

The therapies deliver new genes or genetically altered cells to tackle some of the hardest-to-treat diseases, including in children. They come at a high price: Novartis AG listed its newly approved cell therapy for cancer at $475,000, while Gilead Sciences Inc. priced its rival drug at $373,000.

But...