Gene therapy and fair value.

Retinal pigment epithelial cells in
RPE65-mediated retinal disease

Back in March, I wrote a piece regarding the coming impact of high ticket gene therapies on healthcare budgets. December saw the FDA approval of Spark Therapeutic's Luxturna™ (voretigene neparvovec), a unique treatment for biallelic RPE65-mediated inherited retinal disease, a form of Leber's congenital amaurosis, which results in early onset, progressive loss of vision.

Predictably, Luxturna's approval has reopened the debate around the cost of leading edge therapies. At around $850,000 to treat both eyes, Luxturna™ pricing is somewhat lower than the $1 million plus price tag anticipated by industry analysts, although it's still the most expensive drug in the US by list price.

Justifiable? Perhaps. Gene therapy product approval is not a guaranteed path to riches. As with other genetic disorders, the potential treatment population is small, being around 1000-2000 sufferers in the US, with around the same number in Europe. Moreover, Luxturna™ is a one-time treatment. While even modest uptake should cover Spark's development costs, the overall return to Spark will be, by pharma standards, unremarkable.

Spark appears pragmatic in its approach to reimbursement, offering insurers rebates should patients fail to achieve an agreed degree of benefit, although with only limited and short-term study data available, defining a improvement for rebate purposes will not be easy. Spark is also thought to be considering an annuity model, allowing insurers to pay over time [see update of 12th January below]. 

So much for cost, but what about value? Although not an easy calculation, tallying the lifetime benefit accruing from reduced direct and indirect medical costs, increased individual economic activity and quality of life improvement, might come close to justifying Luxturna’s price tag.

A draft assessment published by the Institute for Clinical and Economic Review published just prior to Luxturna's approval concluded that, although likely to result in better outcomes than standard care, Luxturna would probably not prove to be cost-effective at an assumed acquisition cost of $1 million.  Another crank of the spreadsheet incorporating the actual drug price and post-approval efficacy data, particularly the durability of benefit, could tip the balance in Luxturna's favour.

The UK's National Institute for Health and Care Excellence (NICE) recently concluded that, compared with the cost and risk associated with stem cell transplantation for the treatment of adenosine deaminase deficiency–severe combined immunodeficiency (ADA-SCID or "bubble boy" syndrome) GSK's gene therapy, Strimvelis™, provided both the best treatment option and value for money, despite its  €594,000 (around £505,000) price tag.

Although invariably flawed, cost-effectiveness analysis needs to be at the centre of gene therapy pricing and adoption debates. Such analyses may not always prove favorable, but without an objective means of establishing fair pricing and reimbursement, gene therapies could become out of reach for many patients. The commercial abandonment of Glybera™,a gene therapy for lipoprotein lipase deficiency and announcement of GSK's intention to abandon Strimvelis® (and rare disease therapy development in general) are portents that should not be ignored.

Photo credit: National Eye Institute, National Institutes of Health.

Update added 12^th January 2018

An article in Scrip by Jessica Merrill throws more light on Spark’s pricing arrangements for Luxturna. Outcomes-based reimbursement, with rebates pegged to efficacy (measured by full-field light sensitivity threshold testing), will review benefit at 30-90 days and again at 30 months. 

The size of the rebate has not been disclosed in part due to the need to accommodate a mandated “best pricing” discount (currently 23.1%) under Medicaid. Spark is stated as being in discussions to have this waived in return for larger outcomes-based rebates.

Spark is also looking to reduce the markup levied by hospitals on the payers for administering the product by separating drug purchase and treatment charges, allowing the payer to negotiate the markup directly with the hospital.

Spark innovates on pricing and reimbursement. Merrill, J. Scrip 3887, 12^th January 2018 (subscription required). 

Final evaluation determination. Strimvelis for treating adenosine deaminase deficiency–severe combined immunodeficiency National Institute for Health and Care Excellence. December 2017. http://tinyurl.com/y7ceunzv

Voretigene Neparvovec for Biallelic RPE65-Mediated Retinal Disease: Effectiveness and Value. Draft Evidence Report November 14, 2017. Banken, R et al. Institute for Clinical and Economic Review, 2017. http://tinyurl.com/y92e3sye

FDA approves Spark Therapeutics’ Luxturna™ (voretigene neparvovec-rzyl), a one-time gene therapy for patients with confirmed biallelic rpe65 mutation-associated retinal dystrophy. Company press release online 19th December 2017. http://tinyurl.com/yb6v5smx