By Max Rex, Associate Consultant
Zolgensma, Novartis’s blockbuster gene therapy for the treatment of spinal muscular atrophy (SMA), was officially given the green light by the European Medicines Agency on 19th May. The therapy has previously been approved in the US and Japan, and has already generated sales of over $500 million dollars in under a year on the back of its $2.1 million US price.
Almost 2 months ago, when Zolgensma received a positive opinion from the EMA’s Committee for Medicinal Products for Human Use (CHMP), Novartis announced it would be offering a ‘Day One’ access scheme to European countries to “enable rapid access to Zolgensma upon approval”.
The scheme seems to be a combination of different aspects, similar in some ways to what Bluebird bio is offering with its novel gene therapy, Zynteglo. A combination of annual staged payments, an outcomes guarantee, and various services related to supporting patients and treatment centers. The key difference with this ‘Day One’ scheme is the early access clause, which is not commonly seen in these types of agreements.
What Novartis is offering is in many ways similar to current early access programs in Europe (e.g. Temporary Authorization for Use, or ATU, in France). The payers will pay the current list price (current price in Germany pre-AMNOG) initially for Zolgensma as soon as it has gained EMA approval, but crucially, Novartis is guaranteeing rebates on this price in line with what is later negotiated in the HTA process.
When this was proposed in March of this year, it seemed that this scheme would not be relevant in the three largest European markets:
- Germany – all newly approved drugs have free pricing and are immediately reimbursed, so there will already be near-immediate access
- France – the ATU, a paid early access program where the manufacturer sets their price freely, already exists and is being used for Zolgensma
- England – the NICE Highly Specialized Technology (HST) assessment of Zolgensma is ongoing and a reimbursement decision is expected soon after full EC approval is granted
Novartis have confirmed that access is already possible in France due to the ATU and will shortly follow in Germany. However, due to the ongoing pandemic affecting the functioning of NICE in England, the reimbursement decision for Zolgensma will likely be delayed for some time yet.
Novartis have been extremely active in promoting the ‘Day One’ access scheme, having been in contact with over 100 stakeholder groups across Europe. To set up such a novel and complicated scheme, it would require a complicated negotiation and contracting process with each individual country/payer, with different requirements for all local pricing and reimbursement frameworks.
What are the potential benefits of this scheme for Novartis?
- By immediately setting the price of Zolgensma at the high list price, it could get payers used to such high price when it comes to HTA pricing negotiations
- This could potentially decouple the price of Zolgensma from previous (much cheaper) gene therapies (e.g. Strimvelis, Kymriah etc.)
- Early access allows for Novartis to collect additional real-world evidence (RWE) and KOL experience in these countries prior to pricing negotiations – this evidence could bolster the value story and ease payer fears about real-world effects and long-term efficacy
- By pushing for immediate patient access to this treatment, Novartis will be building positive relationships with patient advocacy groups
What are the potential benefits and risks for payers?
- More patients could be treated sooner with a potentially life changing treatment, leading to better clinical outcomes and lower long-term costs
- The guaranteed rebates from Novartis could lower the risks associated with the high initial therapy cost, as the price will be retroactively altered to the post-negotiation price
- They will face an initial higher budget impact from paying list price for many patients (prevalent pool of patients is larger than the expected incidence of SMA moving forward)
- This could impact their ability to negotiate with Novartis, as they will have experience of the high price
- Payers could be exposed to a public relations backlash if they do not approve reimbursement of Zolgensma in HTA negotiations, given that they will have already reimbursed it for a time
The ‘Day One’ access scheme is an extremely interesting proposal from Novartis, that could be an important innovation in how gene therapies are reimbursed in future. Much will depend on how payers respond to this plan, as there is no guarantee that this will be adopted in any country. Although a definite positive for Novartis, there are definite risks for payers involved in this scheme, so there is reason to believe that there will be skepticism from the payer community.
If successful, then we will likely see many other gene therapy manufacturers following suit in offering such innovative access schemes that include an early access clause. There are already examples of innovative access schemes for gene therapies that are combinations of different payment schemes, such as Strimvelis offering an outcomes-based agreement, annual staged payments, and patient services as part of its reimbursement in Italy. Perhaps the ‘Day One’ scheme is just the next step in finding a way for payers to manage reimbursement of such disruptive technologies.