The gene ther­a­py pric­ing de­bate gets re­al as Spark sets $850,000 charge for its pi­o­neer­ing drug

Years of de­bate, spec­u­la­tion and analy­sis have boiled down to this: Spark $ONCE Ther­a­peu­tics has set an $850,000 whole­sale ac­qui­si­tion cost for the US’s first gene ther­a­py — $425,000 per eye dam­aged by an RPE65 gene mu­ta­tion.

Set to roll out in a mat­ter of weeks, the WAC price for Lux­tur­na falls to­ward the high­er end of an­a­lysts’ bets, which ranged from about $600,000 to just un­der the $1 mil­lion mark for what’s in­tend­ed as a one-time treat­ment for the rare, sight-steal­ing ge­net­ic con­di­tion. Now the high­est priced ther­a­py in the coun­try — out­pac­ing drugs like Spin­raza at $750,000 for the first year of ther­a­py — it falls on Spark to come up with the right pric­ing mod­el that can per­suade pay­ers to cov­er the pro­ce­dure for a small group of un­der 2,000 po­ten­tial pa­tients, with few­er than 20 new pa­tients per year.

Spark’s ex­pe­ri­ence will have an im­mense im­pact on the en­tire gene ther­a­py field, blaz­ing a far wider path that will heav­i­ly in­flu­ence the com­mer­cial for­tunes of a whole wave of gene ther­a­py com­pa­nies look­ing to field once-and-done cures for some of the worst dis­eases to af­flict mankind. And know­ing full well just how much to­day’s close­ly-watched mar­ket­ing plan will be re­viewed by the health­care sys­tem, Spark’s pric­ing team has come up with a mix of re­bates and pro­posed stag­gered pay­ment mod­els de­signed to ease past barbed pay­er bar­ri­ers that can crip­ple any drug launch.

From the time that Jeff Mar­raz­zo first start­ed at the helm of up­start Spark Ther­a­peu­tics about 5 years ago, he’s been think­ing about what the first gene ther­a­py in the US would cost.

And think­ing. And think­ing. And think­ing.

“Did you ever see The Nev­erEnd­ing Sto­ry?” Mar­raz­zo asks me jok­ing­ly in a rare break from his care­ful­ly pre­pared pre­view of the plan, still sound­ing some­what amazed that he’s ac­tu­al­ly reached this stage of the game.

To­day, fi­nal­ly, is the be­gin­ning of an­oth­er im­por­tant chap­ter in the gene ther­a­py sto­ry. And the $850,000 tal­ly Spark is rolling out now is, like all health­care pric­ing in the US, a lot more com­pli­cat­ed than the big round WAC fig­ures peo­ple re­act to.

True to his metic­u­lous na­ture, Mar­raz­zo wants to care­ful­ly ex­plain the mul­ti-tier pay­ment mod­el Spark’s team has been craft­ing and the ob­jec­tive be­hind it all: Not just steer­ing the first gene ther­a­py to an ap­proval, but mak­ing sure that pay­ers will cov­er it so that pa­tients will be able use it to save their vi­sion.

In do­ing this, Mar­raz­zo is al­so acute­ly aware that the first pay­ment mod­el will like­ly heav­i­ly in­flu­ence what and how he charges for a gene ther­a­py for he­mo­phil­ia, now well down the clin­i­cal path. And left un­said is the im­pact that his plan will bear on the en­tire field in­volv­ing blue­bird bio and every­one else press­ing in be­hind him.

Keep in mind, he notes in Busi­ness 101 mode, that there are two key items that de­ter­mine the com­mer­cial val­ue of any new ther­a­py. The price you charge, and the units you sell.

“If the units sold is ze­ro you have ze­ro in the rev­enue line,” says the CEO, what­ev­er the price. And that’s not what Mar­raz­zo and this pub­licly trad­ed com­pa­ny have been in the hunt for.

For some time Mar­raz­zo has re­sist­ed the idea of of­fer­ing re­bates for pa­tients who fail to ben­e­fit fol­low­ing treat­ment. That, he tells me, had more to do with man­ag­ing ex­pec­ta­tions as the com­pa­ny nav­i­gates a com­plex set of hur­dles built in to fed­er­al and com­mer­cial pric­ing poli­cies. But the Spark pric­ing team has worked it out so that un­der one mod­el Spark can of­fer pay­ers un­spec­i­fied re­bates at 30 days and 30 months — which is about the av­er­age amount of time a pa­tient stays in a com­mer­cial plan — if Lux­tur­na falls short of es­tab­lished ef­fi­ca­cy goals on vi­sion.

Michael Sher­man

He al­so per­suad­ed Har­vard Pil­grim CMO Michael Sher­man to of­fer a key en­dorse­ment: “This out­comes-based re­bate arrange­ment is tru­ly in­no­v­a­tive, as it ties pay­ment for the ther­a­peu­tic not on­ly to a short-term goal, but al­so to a longer-term, 30-month as­sess­ment of ef­fi­ca­cy.”

Mar­raz­zo’s not say­ing how much he’s of­fer­ing in re­bates, but when I asked him why not a full re­fund for pa­tients who don’t re­spond ad­e­quate­ly, he said that’s not pos­si­ble. There are so few pa­tients in­volved for each health plan that a full or near full re­bate would take the low­est pos­si­ble price down to ze­ro, which he would have to of­fer to fed­er­al pay­ers — mak­ing it a com­mer­cial dis­as­ter.

To avoid putting hos­pi­tals in a fix over the “buy and bill” re­im­burse­ment mod­el, which leaves them on the hook for the ini­tial cost of the treat­ment, Spark is con­tract­ing di­rect­ly with pay­ers on the price, leav­ing the providers to charge for their end of the pro­ce­dure.

Still in the works is a pro­pos­al to CMS for stag­gered pay­ments, with an up­front amount and bills due through a set pe­ri­od of time. And the com­pa­ny is al­so work­ing on cov­er­ing pa­tients’ out of pock­et costs as part of the over­all price.

Tak­en as a whole, he says, the Spark pric­ing strat­e­gy of­fers the best chance of win­ning cov­er­age for a rad­i­cal­ly new and ex­pen­sive ther­a­peu­tic ap­proach.

In Eu­rope, where the first two gene ther­a­pies have been rolled out to a mere hand­ful of pa­tients in sin­gle pay­er sys­tems, the fail­ure to gain ac­cep­tance has been a vir­tu­al death sen­tence for man­u­fac­tur­ers. Up against a much more in­tri­cate set of US hur­dles, Spark’s team think they have many of the ba­sics worked out.

We’ll know soon whether Mar­raz­zo found the key to open­ing the mar­ket to gene ther­a­pies, or fash­ioned a jour­ney in­to a blind al­ley.

IDC: Life Sci­ences Firms Must Em­brace Dig­i­tal Trans­for­ma­tion Now

Pre-pandemic, the life sciences industry had settled into a pattern. The average drug took 12 years and $2.9 billion to bring to market, and it was an acceptable mode of operations, according to Nimita Limaye, Research Vice President for Life Sciences R&D Strategy and Technology at IDC.

COVID-19 changed that, and served as a proof-of-concept for how technology can truly help life sciences companies succeed and grow, Limaye said. She recently spoke about industry trends at Egnyte’s Life Sciences Summit 2022. You should watch the entire session, free and on-demand, but here’s a brief recap of why she’s urging life sciences companies to embrace digital transformation.

FDA ap­proves one of the prici­est new treat­ments of all time — blue­bird's gene ther­a­py for be­ta tha­lassemia

The FDA on Wednesday approved the first gene therapy for a chronic condition — bluebird bio’s new Zynteglo (beti-cel) as a potentially curative treatment for those with transfusion-dependent thalassemia.

The thumbs-up from the FDA follows a unanimous adcomm vote in June, with outside experts pointing to extraordinary efficacy, with 89% of subjects with TDT who received beti-cel having achieved transfusion independence.

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Bayer's first DTC ad campaign for chronic kidney disease drug Kerendia spells out its benefits

Bay­er aims to sim­pli­fy the com­plex­i­ties of CKD with an ABC-themed ad cam­paign

Do you know the ABCs of CKD in T2D? Bayer’s first ad campaign for Kerendia tackles the complexity of chronic kidney disease with a play on the acronym (CKD) and its connection to type 2 diabetes (T2D).

Kerendia was approved last year as the first and only non-steroidal mineralocorticoid receptor antagonist to treat CKD in people with type 2 diabetes.

In the TV commercial launched this week, A is for awareness, B is for belief and C is for cardiovascular, explained in the ad as awareness of the connection between type 2 and kidney disease, belief that something can be done about it, and cardiovascular events that may be reduced with treatment.

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James Mock, incoming CFO at Moderna

Mod­er­na taps new CFO from PerkinElmer af­ter for­mer one-day CFO oust­ed

When Moderna hired a new CFO last year,  it didn’t expect to see him gone after only one day. Today the biotech named his — likely much more vetted — replacement.

The mRNA company put out word early Wednesday that after the untimely departure of then brand-new CFO Jorge Gomez, it has now found a replacement in James Mock, the soon-to-be former CFO at diagnostics and analytics company PerkinElmer.

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Joe Jonas (Photo by Anthony Behar/Sipa USA)(Sipa via AP Images)

So­lo Jonas broth­er car­ries Merz's new tune in Botox ri­val cam­paign

As the lyrics of his band’s 2019 pop-rock single suggest, Joe Jonas is only human — and that means even he gets frown lines. The 33-year-old singer-songwriter is Merz’s newest celebrity brand partner for its Botox rival Xeomin, as medical aesthetics brands target a younger audience.

Merz kicked off its “Beauty on Your Terms” campaign on Tuesday, featuring the Jonas brother in a video ad for its double-filtered anti-wrinkle injection Xeomin.

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Marisol Peron, Genmab SVP of communications and corporate affairs

Gen­mab launch­es cor­po­rate cam­paign am­pli­fy­ing its ‘knock your socks off’ an­ti­bod­ies

Genmab often talks about its “knock-your-socks-off” antibodies — and now the term is getting its own logo and corporate campaign.

The teal and purple logo for the acronym KYSO — Genmab pronounces it “ky-so” — debuts on Wednesday and comes on the heels of Genmab’s newly announced 2030 vision. That aspiration aims to expand Genmab’s drug development beyond oncology to include other serious diseases, while also doubling down on its own drug development.

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President Joe Biden signs the Democrats' landmark climate change and health care bill. From L-R: Sen. Joe Manchin (D-WV), Senate Majority Leader Chuck Schumer (D-NY), House Majority Whip James Clyburn (D-SC), Rep. Frank Pallone (D-NJ) and Rep. Kathy Castor (D-FL). (Susan Walsh/AP Images)

Pres­i­dent Biden signs ma­jor drug pric­ing re­forms in­to law: What's com­ing for bio­phar­ma?

President Joe Biden yesterday afternoon signed into law historic, decades-in-the-making new drug pricing reforms as part of a wider reconciliation bill that will likely take a chunk out of biopharma companies’ profits for some blockbusters just prior to generic or biosimilar competition.

The partisan bill (all Democrats in the House and Senate voted for it, and all Republicans voted against it) includes not only Medicare price negotiations — which won’t kick off until 2026, leaving ample time for a legal challenge — but mandatory inflation-related rebates, and a $2,000 annual cap on what seniors’ pay for their prescription drugs.

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James Sabry, Roche global head of pharma partnering

Roche, Genen­tech plunk down $60M up­front to part­ner with Chi­nese phar­ma on PRO­TAC-based prostate can­cer drug

Roche and Genentech are always on the hunt for deals, and on Thursday they found their newest partner.

The pair will team up with the Chinese pharma company Jemincare to push forward a new program for prostate cancer, the companies announced. Roche is ponying up $60 million upfront to get its hands on the candidate and promising up to $590 million in biobucks, plus royalties, down the line.

In return, Genentech will get a worldwide license to develop the program, known as JMKX002992, and bring it to market.

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Andrew Hopkins, Exscientia CEO

Ex­sci­en­tia ter­mi­nates Bay­er pact half a year ear­ly, col­lect­ing small por­tion of €240M promised

Bayer and Exscientia are winding down their three-year collaboration, leaving the big German pharma to take the AI-designed compounds born out of the pact further.

London-based Exscientia revealed in its Q2 update that the partners have “mutually agreed to end” their collaboration, which kicked off in early 2020, after recently achieving a drug discovery milestone. In an SEC filing, Exscientia said it terminated the pact on May 30, about six months early.