Gene Therapy, Pricing, Rare Diseases

To be cost-effective, Biogen should slash Spinraza price, and Novartis cannot justify a $4M-$5M price tag for Zolgensma — ICER

As treatments for rare diseases and gene therapies make strides on the US market, the issue of pricing is once again center stage. Biogen should cut the price of its spinal muscular atrophy (SMA) treatment Spinraza and the price for Novartis’ one-shot Zolgensma — which is expected to win FDA approval by May — is justifiable up to $1.5 million, Boston-based ICER concluded on Wednesday.

Akin to NICE in the UK, ICER is an independent body that analyzes the cost-effectiveness of drugs and other medical services in the United States. Unlike NICE, though, ICER is not government-affiliated, but its determinations are increasingly becoming influential with payers.

Spinraza was approved by the FDA amidst much fanfare in 2016 as the first and only disease-modifying treatment for SMA, a rare and but leading genetic cause of infant deaths. But the price tag of $750,000 for the first year of therapy (and a $375,000 thereafter) sparked heavy criticism, even though many payers eventually agreed to reimburse the treatment. It generated $1.7 billion in 2018 sales for Biogen.

Novartis’ Zolgensma is currently under FDA review and the agency is expected to announce its decision in the coming months. The Swiss drugmaker has suggested a price of $4 million for the gene replacement therapy, which it acquired via its $8.7 billion takeover of AveXis, may be justified.

David Rind

“(T)he current price of Spinraza far exceeds common thresholds for cost-effectiveness. The price of Zolgensma is not yet known, but there has been public discussion of prices above commonly accepted cost-effectiveness thresholds as well. These treatments will be covered by US insurers regardless of the pricing, but the ripple effect of pricing decisions like these threatens the overall affordability and sustainability of the US health system,” ICER’s chief medical officer David Rind said in a statement.

In the initial draft ICER recommendations issued late last year, ICER had suggested Zolgensma — priced at $2 million — could be more cost-effective in the long run versus Spinraza.

On Wednesday, ICER’s final report suggested although Spinraza’s price “should be far lower than it is, and the price for Zolgensma should be lower than the hypothetical $4-5 million price the manufacturer has suggested could be justified.”

ICER conducted its analyses using two measures: 1) QALYs, or quality-adjusted life-years, are a measure of the state of health of a person or group in which the benefits — in terms of length of life — are adjusted to reflect the quality of life. Essentially, one QALY is equal to one year of life in perfect health. 2) Life years gained (LYG), which expresses the additional number of years of life that a person lives as a result of receiving a treatment.

Historically, life expectancy in the most common and severe form of SMA (type I) is less than two years. Survival depends on respiratory function, and many infants and children eventually require permanent ventilation.

Using the QALY measure for cost-effectiveness, Spinraza’s value was assessed in the presymptomatic population, as there are data supporting its effectiveness in these types of patients. The drug’s price should be between $72,000-$130,000 for the first year of treatment and between $36,000-$65,000 for each successive year. Under the LYG benchmark, Spinraza would need to be priced between $83,000-$145,000 during the initial year and $41,000-$72,000 for each successive year, ICER said.

“As the report notes, there is a significant difference in robustness and quality of evidence for Spinraza as compared to Zolgensma. The analysis, however, fails to account for those differences. Spinraza is the standard of care in SMA and has benefitted the lives of more than 6,600 people. In contrast, Zolgensma is an experimental therapy which has reported results to date for only 15 patients followed for up to 2.5 years, seven of whom are reported to have subsequently initiated treatment with Spinraza,” a Biogen spokesperson said in an emailed statement.

Meanwhile, ICER did not vote on the long-term value of Zolgensma, as its final price is not yet known. It conducted its assessment for the SMA type I population as this is the only population in which it has been clinically evaluated. Using QALY, the therapy’s price for type I SMA would need to be between $310,000-$900,000 per shot, while under the LYG benchmark it would need to be between $710,000-$1.5 million per treatment, ICER concluded.

“The value measures and thresholds employed by ICER in this report are designed around the status quo of chronic care management and cannot possibly capture the full benefits of disease-modifying treatments delivered as a one-time administration,” a Novartis spokesperson said in an emailed statement.

ICER also recommended payers endorsed the concept of value-based contracts, a system in which a reimbursement for a substantial portion of the treatment is not passed on to the drugmaker, should patients not receive adequate clinical benefit.

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Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT
Director of Operations
Atlas Venture Cambridge, MA

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