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Spark Therapeutics Announces $850 000 price tag of gene therapy treatment Luxturna

Spark Therapeutics has announced its recently approved Luxturna (voretigene neparvovec-rzyl), a gene therapy treatment for biallelic RPE65 mutation-associated retinal dystrophy will cost $425 000 per eye, or $850 000 in total, in the U.S. This is below the $1 million price tag that was originally speculated. Spark Therapeutics is also working with Harvard Pilgrim, a health services company, to make the gene therapy available under an outcomes-based rebate programme. The company has also suggested that the U.S. Centers for Medicare & Medicaid Services (CMS) could pay for the treatment in installments over time. (January 3, 2018)

P4A Thoughts

The U.S. price . for Luxturna will likely act as a benchmark for other countries when determining whether to reimburse the treatment. While the cost is high, it is still lower than the expected price tag of $1 million which was attributed to the small patient population of approximately 6,000 in the U.S. and Europe. Luxturna is indicated for only a subset of patients with a rare inherited disorder known as Leber congenital amaurosis.

Luxturna will be available at six U.S. treatment centers and Spark therapeutics has taken the responsibility of ensuring financial support and logistics for travel and accommodations. This distribution channel employed by Spark in the U.S. can pave the way for similar systems in other countries and by similar drugs.

It is the first gene therapy of its kind to be approved in the U.S., it is the only approved treatment to target a disease caused by a specific gene. This as well as Novartis’ Kymriah, and Gilead/Kite’s Yescarta, both of which were approved in 2017 in the U.S., may encourage other biotechnology and biopharmaceutical companies to invest in gene therapy treatments.

Spark has been pursuing an installment based payment method within the U.S., in which Luxturna would be paid for over several years. However, the current government price reporting requirements prevent this from being possible. If Spark continues to pursue this and an agreement is reached, Luxturna could act as a model and provide easier price decision making process for future gene therapies and other one-off treatment options.

Spark therapeutics is also working with U.S. Centers for Medicare & Medicaid Services (CMS) on a pay-for-performance based approach, where risk is shared though rebates contingent on the efficacy of the therapy. An agreement has already been reached with Harvard Pilgrim, a nonprofit health plan covering 1.2 million people, to pay rebates if the drug fails to meet preset criteria in 30 to 90 days, and then 30 months after treatment. This willingness of insurance companies to work with drug producers may encourage other companies to pursue this outcomes-based pricing approach.

Finally, Spark therapeutics has started a partnership with Express Scripts, a pharmacy benefit manager, to allow insurers to pay for Luxturna directly, which would be the first of its kind. This contrasts with the currently employed buy and bill model in which treatment centers administering the drug must pay for the therapy up front and seek compensation from the insurance companies later. This model focuses on short-term value, mainly because the average U.S. patient will switch health insurance companies every three years. If this direct payment model can be enforced, it could reduce the burden on healthcare budgets and increase the likelihood of expensive treatments being covered. This could be especially important for future treatments whose patient populations is higher than that of Luxturna. The question remains however if this alternative model will prove successful for Luxturna.

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