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.

Paying for gene therapy. No easy terms.

An early promise of biotechnology was gene therapy- the correction of Nature’s mistakes by re-writing the genetic code to restore normal function. The complexity of the task, even for single gene defects, has proved immense and several decades on, only two gene therapies have received approval in developed economies.

Glybera®, a treatment for lipoprotein lipase deficiency developed by UniQure, received European approval in 2012 and Strimvelis®,  a treatment for severe combined immune deficiency in children (“bubble boy” disease) developed by the San Raffaele Telethon Institute for Gene Therapy (and licensed to GSK), received European approval in 2016.

In addition to being the first approved gene therapy, Glybera® has the distinction of being the most expensive drug in the world at €1.1 million. Only one patient has ever been treated and the prescribing physician had to personally call the CEO of a German health insurance provider to secure payment.  Strimvelis® is more modestly priced at just under €600,000.

As Glybera® has demonstrated, monetizing gene therapy treatments is a problem. While there are upwards of 4,000 genetic disorders, the number of treatable patients afflicted with any single disorder is minute. Only around 1 in a million individuals suffers from lipoprotein lipase deficiency, with 14 or so “bubble boy” patients in Europe.

A report from the UK’s Office of Health Economics released earlier this week covers a policy summit convened in December 2016 which brought together healthcare payers and companies developing gene therapies to discuss the challenges involved in gauging effectiveness and assigning value. Such therapies do not lend themselves to blinded clinical studies and, with such small patient numbers,  the degree of effectiveness (and cost-benefit) may not become apparent for several years after approval.

Mooted mechanisms include those used with other high cost treatments (discount and rebate arrangements, restricting eligibility or reserving as the treatment of last resort, or outcomes-based agreements, although the latter would seem to be impractical given the difficulty in assessing outcomes. However, this has not prevented GSK offering a money back guarantee on Strimvelis®. Healthcare payers could lay off some of the risk through reinsurance although amortization, where the cost of treatment is spread over time could turn out to suit payers and developers alike.

Paying for gene therapy is far from abstract. Despite a history of failure and unknown commercial return, development continues and there are now over 20 gene therapies in Phase III development. At around €1 million or $1 million a pop, healthcare systems will feel the impact even on limited gene therapy approval. One of the front runners is Spark Therapeutics, which is on the cusp of submitting a rolling Biologics License Application to the FDA for its inherited retinal disease treatment, SPK-RPE65 (voretigene neparvovec) and could win approval this year.