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.

It’s fi­nal­ly over: Bio­gen, Ei­sai scrap big Alzheimer’s PhI­I­Is af­ter a pre­dictable BACE cat­a­stro­phe rais­es safe­ty fears

Months after analysts and investors called on Biogen and Eisai to scrap their BACE drug for Alzheimer’s and move on in the wake of a string of late-stage failures and rising safety fears, the partners have called it quits. And they said they were dropping the drug — elenbecestat — after the independent monitoring board raised concerns about…safety.

We don’t know exactly what researchers found in this latest catastrophe, but the companies noted in their release that investigators had determined that the drug was flunking the risk/benefit analysis.

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It's not per­fect, but it's a good start: FDA pan­elists large­ly en­dorse Aim­mune's peanut al­ler­gy ther­a­py

Two days after a fairly benign review from FDA staff, an independent panel of experts largely endorsed the efficacy and safety of Aimmune’s peanut allergy therapy, laying the groundwork for approval with a risk evaluation and mitigation strategy (REMS).

Traditionally, peanut allergies are managed by avoidance, but the threat of accidental exposure cannot be nullified. Some allergists have devised a way to dose patients off-label with peanut protein derived from supermarket products to wean them off their allergies. But the idea behind Aimmune’s product was to standardize the peanut protein, and track the process of desensitization — so when accidental exposure in the real world invariably occurs, patients are less likely to experience a life-threatening allergic reaction.

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Lisa M. DeAngelis, MSKCC

MSK picks brain can­cer ex­pert Lisa DeAn­ge­lis as its next CMO — fol­low­ing José Basel­ga’s con­tro­ver­sial ex­it

It’s official. Memorial Sloan Kettering has picked a brain cancer expert as its new physician-in-chief and CMO, replacing José Baselga, who left under a cloud after being singled out by The New York Times and ProPublica for failing to properly air his lucrative industry ties.

His replacement, who now will be in charge of MSK’s cutting-edge research work as well as the cancer care delivered by hundreds of practitioners, is Lisa M. DeAngelis. DeAngelis had been chair of the neurology department and co-founder of MSK’s brain tumor center and was moved in to the acting CMO role in the wake of Baselga’s departure.

Penn team adapts CAR-T tech, reengi­neer­ing mouse cells to treat car­diac fi­bro­sis

After establishing itself as one of the pioneer research centers in the world for CAR-T cancer therapies, creating new attack vehicles to eradicate cancer cells, a team at Penn Medicine has begun the tricky transition of using the basic technology for heart repair work.

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Tal Zaks. Moderna

The mR­NA uni­corn Mod­er­na has more ear­ly-stage hu­man da­ta it wants to show off — reach­ing new peaks in prov­ing the po­ten­tial

The whole messenger RNA field has attracted billions of dollars in public and private investor cash gambled on the prospect of getting in on the ground floor. And this morning Boston-based Moderna, one of the leaders in the field, wants to show off a few more of the cards it has to play to prove to you that they’re really in the game.

The whole hand, of course, has yet to be dealt. And there’s no telling who gets to walk with a share of the pot. But any cards on display at this point — especially after being accused of keeping its deck under lock and key — will attract plenty of attention from some very wary, and wired, observers.

“In terms of the complexity and unmet need,” says Tal Zaks, the chief medical officer, “this is peak for what we’ve accomplished.”

Moderna has two Phase I studies it wants to talk about now.

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Sanofi takes a $260M hit to ex­tri­cate it­self from a dis­as­trous al­liance with Lex­i­con

Sanofi spent $300 million in cash to get into a $1.7 billion alliance with Lexicon on their SGLT1/2 diabetes drug sotagliflozin. And now that the drug has been spurned by the FDA after burning through a program that provided mixed late-stage data and a late shot at a last-place finish, the French pharma giant is forking over another $260 million to get out of the deal.

Sanofi’s unhappiness was already apparent when the company — now under new CEO Paul Hudson — posted a statement back in July that they were dropping the deal. But it wasn’t that simple. 

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Rit­ter bombs fi­nal PhI­II for sole lac­tose in­tol­er­ance drug — shares plum­met

More than two years ago Ritter Pharmaceuticals managed to find enough silver lining in its Phase IIb/III study — after missing the top-line mark — to propel its lactose intolerance toward a confirmatory trial. But as it turned out, the enthusiasm only set the biotech and its investors up to be sorely disappointed.

This time around there’s little left to salvage. Not only did RP-G28 fail to beat placebo in reducing lactose intolerance symptoms, patients in the treatment group actually averaged a smaller improvement. On a composite score measuring symptoms like abdominal pain, cramping, bloating and gas, patients given the drug had a mean reduction of 3.159 while the placebo cohort saw a 3.420 drop on average (one-sided p-value = 0.0106).

Ear­ly snap­shot of Ad­verum's eye gene ther­a­py sparks con­cern about vi­sion loss

An early-stage update on Adverum Biotechnologies’ intravitreal gene therapy has triggered investor concern, after patients with wet age-related macular degeneration (AMD) saw their vision deteriorate, despite signs that the treatment is improving retinal anatomy.

Adverum, on Wednesday, unveiled 24-week data from the OPTIC trial of its experimental therapy, ADVM-022, in six patients who have been administered with one dose of the therapy. On average, patients in the trial had severe disease with an average of 6.2 anti-VEGF injections in the eight months prior to screening and an average annualized injection frequency of 9.3 injections.

Alex Ar­faei trades his an­a­lyst's post for a new role as biotech VC; Sanofi vet heads to Vi­for

Too often, Alex Arfaei arrived too late. 

An analyst at BMO Capital Markets, he’d meet with biotech or pharmaceutical heads for their IPO or secondary funding and his brain, trained on a biology degree and six years at Merck and Endo, would spring with questions: Why this biomarker? Why this design? Why not this endpoint? Not that he could do anything about it. These execs were coming for clinical money; their decisions had been made and finalized long ago.