AveXis managed to grab the industry’s attention when researchers posted early and stunning results for their life-saving gene therapy to treat rare cases of spinal muscular atrophy. They were back in the spotlight when Novartis reached out to buy the company for $8.7 billion. And now they’re making a return trip to center stage with an argument that their once-and-done approach to SMA — AVXS-101 — could justifiably be priced at $4 million to $5 million.
“Four million dollars is a significant amount of money, but we believe this is a cost-effective point,” Dave Lennon, president of AveXis told investors earlier today, according to a report from Reuters. “We’ve shown through other studies we are cost effective in the range of $4-$5 million. And ultimately, this is important context as we consider how we’re going to evaluate value for (the therapy called) AVXS-101.”
Novartis outlined their argument in a slide that used price guidelines from the cost watchdogs at ICER and NICE to make their case. ICER, for example, backed Roche’s $482,000 first-year price for Hemlibra, with a 10-year cost of $4.5 million. But it’s hard to see either group going for $4 million worth of sticker shock for a one-time therapy. ICER rejected Spark’s $850,000 price tag for its gene therapy for a rare form of blindness as extreme and needed to be cut by at least 50% to reflect its true value to patients. And NICE has had no problem rejecting other rare disease drugs with much smaller prices attached.
Novartis may not actually be planning to try and collect $4 million for their drug, and execs demurred on projecting the cost today. But they seem intent on softening up the payer market for something significantly higher than $1 million — once considered a jaw-dropping, break-the-bank sum.
And that would put them at the very top of the heap of the most expensive drugs on the planet.
In their favor: Rivals at Biogen charge $750,000 for the first year of Spinraza, then $375,000 a year after that — for life. That’s $1.87 million over 4 years. And they don’t get much grief for it.
At the very least, you can expect a whole new discussion around the pricing of gene therapies, as developers discuss different pay plans to spread out the cost or offer various money-back guarantees.
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