Blue­bird en­dors­es plan for in­stall­ment-based pay­ments for cost­ly gene ther­a­py

Pay­ment-by-in­stall­ment to tack­le the sky­rock­et­ing costs of drugs has long been de­lib­er­at­ed in health pol­i­cy cir­cles, but is now gain­ing trac­tion on the man­u­fac­tur­er side in the field of gene ther­a­py, as back­lash to $1 mil­lion-plus prices of these one-shot treat­ments whose long-term dura­bil­i­ty has not been es­tab­lished forces drug­mak­ers to seek cre­ative so­lu­tions to en­sure re­im­burse­ment.

Nick Leschly. GET­TY

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Blue­bird bio $BLUE CEO Nick Leschly float­ed such a mod­el in an in­ter­view with the Wall Street Jour­nal on Tues­day at the JP Mor­gan Health­care con­fer­ence, in re­la­tion to its gene-re­place­ment ther­a­py Lenti­Glo­bin for be­ta tha­lassemia — a rare, in­her­it­ed blood dis­or­der — which is ex­pect­ed to win EU ap­proval this year, and US ap­proval in 2020. Pa­tients with the dis­or­der usu­al­ly re­quire life­long treat­ment with blood trans­fu­sions and med­ica­tion.

The to­tal price of the com­pa­ny’s gene ther­a­py has not been an­nounced, but is ex­pect­ed to be in the sev­en-fig­ure range, al­beit be­low $2.1 mil­lion — which the com­pa­ny be­lieves is the “in­trin­sic val­ue” of the treat­ment — the WSJ re­port said. The com­pa­ny’s pric­ing plan in­volves an up­front 20% of the cost of the treat­ment, while the rest is ex­pect­ed to come in 20% in­stall­ments per year via the in­sur­er if the drug does in­deed work as in­tend­ed.

Leerink an­a­lysts said they had mod­eled the launch price of Lenti­Glo­bin as $1.2 mil­lion in the US and $0.9 mil­lion in the EU.

“How­ev­er, 80% of the cost of gene ther­a­py would be at risk, and while the da­ta for Lenti­Glo­bin has been promis­ing in our view, long-term dura­bil­i­ty is still an un­known and low­er than ex­pect­ed dura­bil­i­ty could erode the as­sumed price,” they wrote in a note on Tues­day.

Blue­bird’s plan — akin to a mort­gage — in­volves an up­front cost, fol­lowed by in­stall­ments of pay­ment. Ex­cept un­like a mort­gage, the in­di­vid­ual (or in this case a pa­tient) sel­dom en­joys the free­dom of treat­ment choice, and pay­ments are based on out­comes. Be­fore he be­came FDA com­mis­sion­er, Scott Got­tlieb, in a re­port for the Wash­ing­ton-based pub­lic pol­i­cy think tank AEI Re­search in 2014, wrote that med­ical ad­vance­ments tan­ta­mount to cures ne­ces­si­tat­ed pay­ment mod­els that can spread the high up­front costs over time dur­ing which the pub­lic health and eco­nom­ic ben­e­fits can be re­al­ized.

In health­care for ex­am­ple the cost of a ro­bot­ic tool for per­form­ing surgery is typ­i­cal­ly spread out (or amor­tized) over the sev­en years dur­ing which the de­vice is pre­sumed to be use­ful, he not­ed. In terms of med­ical treat­ment, amor­ti­za­tion is a more op­er­a­tive con­cept. “In­stead of spread­ing out the costs over the use­ful life of a piece of cap­i­tal equip­ment, amor­ti­za­tion in this con­text would al­low a pay­er to spread out the costs over the pe­ri­od dur­ing which it would ac­crue the ben­e­fits of the re­duced down­stream costs from dis­ease avert­ed,” he wrote.

More re­cent­ly, an ICER re­port pub­lished in 2017 de­bat­ed the mer­its of the amor­ti­za­tion mod­el for gene ther­a­pies, sug­gest­ing that al­though the idea was com­mend­able it may ac­tu­al­ly con­tribute to in­creased over­all prices for al­ready ex­pen­sive treat­ments. Mean­while, there are al­so oth­er chal­lenges to im­ple­ment­ing such a scheme — for in­stance, in the Unit­ed States, where in­sur­ance is of­ten tied to em­ploy­ment, drug­mak­ers will be on the hook if pa­tients change jobs or in­sur­ance car­ri­ers.

The furor sur­round­ing drug price goug­ing has spawned oth­er ideas such as val­ue-based pay­ments, in which in­sur­ers are el­i­gi­ble to re­ceive retroac­tive re­bates if drugs don’t work as in­tend­ed. For in­stance, Spark Ther­a­peu­tics’$ONCE has de­ployed a sim­i­lar plan by agree­ing to re­bate cer­tain in­sur­ers if its $850,000-gene ther­a­py for in­her­it­ed vi­sion loss Lux­tur­na doesn’t work as promised. Tra­di­tion­al­ly, in­sur­ers pay for a drug — re­gard­less of whether it works or not.

Biotech Half­time Re­port: Af­ter a bumpy year, is biotech ready to re­bound?

The biotech sector has come down firmly from the highs of February as negative sentiment takes hold. The sector had a major boost of optimism from the success of the COVID-19 vaccines, making investors keenly aware of the potential of biopharma R&D engines. But from early this year, clinical trial, regulatory and access setbacks have reminded investors of the sector’s inherent risks.

RBC Capital Markets recently surveyed investors to take the temperature of the market, a mix of specialists/generalists and long-only/ long-short investment strategies. Heading into the second half of the year, investors mostly see the sector as undervalued (49%), a large change from the first half of the year when only 20% rated it as undervalued. Around 41% of investors now believe that biotech will underperform the S&P500 in the second half of 2021. Despite that view, 54% plan to maintain their position in the market and 41% still plan to increase their holdings.

How to col­lect and sub­mit RWD to win ap­proval for a new drug in­di­ca­tion: FDA spells it out in a long-await­ed guid­ance

Real-world data is messy. There can be differences in the standards used to collect different types of data, differences in terminologies and curation strategies, and even in the way data is exchanged.

While acknowledging this somewhat controlled chaos, the FDA is now explaining how biopharma companies can submit study data derived from real-world data (RWD) sources in applicable regulatory submissions, including new drug indications.

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David Lockhart, ReCode Therapeutics CEO

Pfiz­er throws its weight be­hind LNP play­er eye­ing mR­NA treat­ments for CF, PCD

David Lockhart did not see the meteoric rise of messenger RNA and lipid nanoparticles coming.

Thanks to the worldwide fight against Covid-19, mRNA — the genetic code that can be engineered to turn the body into a mini protein factory — and LNPs, those tiny bubbles of fat carrying those instructions, have found their way into hundreds of millions of people. Within the biotech world, pioneers like Alnylam and Intellia have demonstrated just how versatile LNPs can be as a delivery vehicle for anything from siRNA to CRISPR/Cas9.

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Bris­tol My­ers pledges to sell its Ac­celeron shares as ac­tivist in­vestors cir­cle Mer­ck­'s $11.5B buy­out — re­port

Just as Avoro Capital’s campaign to derail Merck’s proposed $11.5 billion buyout of Acceleron gains steam, Bristol Myers Squibb is leaning in with some hefty counterweight.

The pharma giant is planning to tender its Acceleron shares, Bloomberg reported, which add up to a sizable 11.5% stake. Based on the offer price, the sale would net Bristol Myers around $1.3 billion.

To complete its deal, Merck needs a majority of shareholders to agree to sell their shares.

Some can­cer pa­tients now have to find oth­er op­tions as Bris­tol My­er­s' Abrax­ane falls in­to short­age from man­u­fac­tur­ing woes

When Beth Hogan, a metastatic pancreatic cancer patient, showed up for her infusion at Yale’s Smilow Cancer Hospital in New Haven, CT on Oct. 11, she said she was informed that day that she would not be receiving Bristol Myers Squibb’s Abraxane, part of her combo treatment, because of a shortage.

“I was told we don’t know when you can have it,” she told Endpoints News via email, adding that she doesn’t expect to receive any Abraxane this coming Monday at her treatment appointment either, and she doesn’t know when things will change.

Michel Vounatsos, Biogen CEO (Credit: World Economic Forum/Valeriano Di Domenico)

Up­dat­ed: Bio­gen sells just $300K worth of Aduhelm in Q3, as ques­tions on long-term vi­a­bil­i­ty re­main

Barely anyone is accessing Biogen’s controversial Alzheimer’s treatment, with the company reporting just $0.3 million in Aduhelm sales in the third quarter. Although investors will be looking to the longer term, when CMS may decide to cover the drug and open the floodgates for more reimbursement, use of the drug is currently stalled.

Since June, when the FDA first signed off on the drug under its accelerated pathway, Biogen said Wednesday that it’s sold a total of $2 million worth of Aduhelm. That’s a far cry from the peak Wall Street sales estimate of about $9 billion in annual sales, and even a ways away from the sell-side consensus of about $17 million in Q3 sales.

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Leen Kawas (L) has resigned as CEO of Athira and will be replaced by COO Mark Litton

Ex­clu­sive: Athi­ra CEO Leen Kawas re­signs af­ter in­ves­ti­ga­tion finds she ma­nip­u­lat­ed da­ta

Leen Kawas, CEO and founder of the Alzheimer’s upstart Athira Pharma, has resigned after an internal investigation found she altered images in her doctoral thesis and four other papers that were foundational to establishing the company.

Mark Litton, the company’s COO since June 2019 and a longtime biotech executive, has been named full-time CEO. Kawas, meanwhile, will no longer have ties to the company except for owning a few hundred thousand shares.

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Eli Lil­ly or­dered to pay roy­al­ties on block­buster di­a­betes drugs, though ex­act dam­ages are un­clear

A federal court found Eli Lilly in breach of a royalty agreement with an Arizona company, likely sending the case — which deals with Lilly’s blockbuster diabetes drugs — to a trial.

The Arizona District Court ordered Lilly to pay the royalties to Tucson, AZ-based Research Corporation Technologies, per an opinion delivered Tuesday, stemming from a 1990 agreement involving materials used in manufacturing Lilly’s insulin products. Lilly had agreed to pay a 2% royalty on worldwide sales, and the exact amount of damages will be determined in a trial, Judge Scott Rash wrote.

Sen. Richard Durbin (D-IL, foreground) and Sen. Richard Blumenthal (D-CT) (Patrick Semansky/AP Images)

Sen­a­tors back FDA's plan to re­quire manda­to­ry pre­scriber ed­u­ca­tion for opi­oids

Three Senate Democrats are backing an FDA plan to require mandatory prescriber education for opioids as overdose deaths have risen sharply over the past decade, with almost 97,000 American opioid-related overdose deaths in the past year alone.

While acknowledging a decline in overall opioid analgesic dispensing in recent years, the FDA said it’s reconsidering the need for mandatory prescriber training through a REMS given the current situation with overdoses, and is seeking input on the aspects of the opioid crisis that mandatory training could potentially mitigate.