How much is your vision worth? Spark CEO Jeff Marrazzo has a price in mind
Just how much is your vision worth?
That’s the billion-dollar question at Spark Therapeutics now as the FDA winds up with an odds-on approval for its gene therapy used to fix a rare form of inherited blindness called RPE65-mediated retinal dystrophy.
It’s verboten in biopharma for CEOs to discuss hard prices ahead of an approval, but Spark $ONCE CEO Jeff Marrazzo has been doing the math on the economic value of vision, and came up with a substantial 7-figure number: $1 million-plus for Luxturna.
“While it is not our intention today to guide you with the potential price if it is approved, we are encouraged that by modeling reasonable assumptions about the impact of Luxturna on these types of indirect costs, as well as on quality of life and direct medical cost over a patient’s lifetime that there is support for the value of the therapy in excess of $1 million per patient,” he said during Spark’s Q3 call with analysts on Tuesday.
Marrazzo then carefully walked through the economic argument for a price that could land the company’s lead treatment right at the top of the list of the 10 most expensive therapies on the planet.
There are several factors to consider in evaluating their therapy’s price, Marrazzo said. Start with the value of a job, something 70% of the blind in the US don’t have. There’s the cost of a caregiver for blind children, often a parent who can’t work. And there are state court decisions that place the value of sight for plaintiffs at more than $1 million.
Spark’s move here is crucial for the entire gene therapy field. This is the first such treatment to reach the threshold of an FDA approval, and its marketing plan will influence the market valuation of every biotech in the field. And while a couple of gene therapies have been sanctioned in Europe, they’ve only been rarely used, falling well short of the kind of commercial success needed for a viable marketing effort.
Over the last year there have been a variety of wide-ranging discussions about the coming price discussion on gene therapies. Some have suggested that the manufacturers should spread the price over a period of time, to make it easier to cover or limit the price if the gene therapy’s effect waned over time.
Marrazzo, for his part, says reimbursement rules in the US make such spread out payments virtually impossible, suggesting that Spark will wind up with a 7-figure sticker that gets paid on delivery. While he says that the final price has yet to be nailed down, at this stage of the game it’s more than likely that Spark has a hard price in mind for the rollout to come soon.
And the CEO just made a blockbuster economic case for Luxturna.