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At $2.1 million, newly approved Novartis gene therapy will be world’s most expensive drug

STAT News – by Adam Feuerstein

he Food and Drug Administration on Friday approved the first gene therapy for a type of spinal muscular atrophy, a lifesaving treatment for infants that will also be the most expensive drug in the world.

Known as Zolgensma, the gene therapy treats children under 2 years of age with spinal muscular atrophy, an inherited neuromuscular disease that causes progressive loss of muscle function. The most severe form of SMA causes infants to die or rely on permanent breathing support by the age of 2. The disease is caused by a defect in a gene that makes SMN, a protein necessary for the survival of motor neurons. Zolgensma uses a re-engineered virus to deliver a functional copy of the defective gene so that SMN protein can be produced. 

Novartis is pricing Zolgensma at $2.125 million, or an annualized cost of $425,000 per year for five years, the company said.

Launching Zolgensma will be a big test for Novartis and CEO Vas Narasimhan, now two years on the job. Shareholders expect the gene therapy to deliver blockbuster sales to justify the $8.7 billion that Novartis spent to acquire it last year.

To achieve commercial success, Novartis must persuade doctors who treat SMA patients that the muscle-preserving benefits from a one-time injection of Zolgensma will be durable. Complex payment and insurance reimbursement arrangements required for expensive gene therapies need to be handled deftly.

Novartis is likely to face backlash from critics who believe charging millions of dollars for any medicine — no matter how effective — renders it unaffordable for a healthcare system already under financial stress.

There’s also competition. Spinraza, approved in late 2016 and sold by Biogen, has already been used to successfully treat thousands of patients with severe and milder forms of SMA. The drug requires regular spinal infusions costing $750,000 in the first year and $375,000 annually thereafter, for life. Sales last year totaled $1.7 billion. Zolgensma may be more convenient than Spinraza, but Roche is developing a daily pill for SMA called risdiplam that could reach the market in 2020.

The FDA approved Zolgensma to treat children under 2 diagnosed with SMA, regardless of genetic mutation. In its pivotal clinical trial and an ongoing clinical trial, a majority of the infants and young children injected once with Zolgensma remained alive, could breathe on their own, and showed improvements in motor milestones like being able to sit up without support.

Zolgensma “is markedly better than any other therapy out there, particularly in the clinical trials of type 1 that we’ve released,” Narasimhan told STAT in a recent interview. “Clearly, parents will know right away that this is a medicine that performs extremely, extremely well in these infants and has this kind of marked effect on their well-being.”

In its announcement, acting FDA Commissioner Ned Sharpless said the approval marks “another milestone in the transformational power of gene and cell therapies to treat a wide range of diseases.”

A survey of 30 doctors currently treating SMA patients, conducted by the analysts at Jefferies, found that 30% would use Zolgensma in newly diagnosed SMA patients one year after launch. Doctors were also interested in trying combinations of Zolgensma and Spinraza. Jefferies is forecasting Zolgensma sales to reach $2.6 billion, above the $1.9 billion consensus peak sales estimate.

Biogen disagrees, not surprisingly. On a recent conference call, executives argued that even with Zolgensma’s arrival, Spinraza remains the standard of care treatment for SMA, based on the drug’s broader label and more than 7,000 patients treated, some for as long as six years. Spinraza is approved for all types of SMA — from the sickest type 1 infants to adults with milder forms of the disease where loss of muscle function starts later and is more gradual.

“Biogen welcomes additional therapeutic options to help individuals with this rare disease, the company said in a statement issued after Zolgensma’s approval. “We are proud to have helped more than 7,500 people with SMA. Spinraza continues to be the only treatment available for a broad age range of patients with SMA.”

Dr. John Brandsema, a pediatric neurologist at Children’s Hospital of Philadelphia, has treated SMA patients with Spinraza and Zolgensma. He believes comparisons are premature.

“There’s a reluctance on the part of the academic community to directly compare the patients from the gene transfer trial [Zolgensma] to the patients from the nusinersen [Spinraza] trial. They were different in their inclusion criteria, in their age at initiation of therapy and in some of the outcome measures that were being studied,” Brandsema told STAT. “I think you really need real-world experience to be able to do comparisons to that level and we don’t have real-world experience yet with gene transfer.” Brandsema has received consulting fees from Biogen and AveXis, the biotech company that developed Zolgensma and was acquired by Novartis.

Dr. Ed Smith, an SMA expert at Duke University, said awareness of Zolgensma is already high among his patients and their caregivers.

“I will say that talking to the patients and families who are doing Spinraza currently, many of them are eagerly awaiting the option potentially for a one time dose of a gene therapy if that’s an option for them,” Smith told STAT. “Most of them that I’ve asked, and I’ve asked most of them, sort of eagerly await this as an option and want to know, is it going to be an option for me.”

About that $2.1 million Zolgensma sticker price: Novartis defends its pricing decision, calling the treatment “highly cost effective” and “fair and reasonable” given the benefit demonstrating in clinical trials. Novartis pointed out that chronic injections of Spinraza cost more than $4 million over five years.

Novartis said it is working with insurers to implement pay-over-time and outcomes-based agreements to accelerate patient access and reimbursement for Zolgensma.

Significantly, Novartis won’t get pushback from the Institute for Clinical and Economic Review, a nonprofit that has become an unofficial force in the country for assessing the economic benefits of new medicines. On Friday, ICER endorsed Novartis’ pricing strategy. An updated ICER cost-effectiveness analysis found that Zolgensma, at $2.1 million, was just slightly higher than its value-based pricing benchmark. A previous ICER analysis pegged the justifiable cost of Zolgensma at $1.5 million.

“Zolgensma is dramatically transforming the lives of families affected by this devastating disease, and given the new efficacy data for the pre-symptomatic population, the price announced today falls within the upper bound of ICER’s value-based price benchmark range,” said Dr. Steven D. Pearson, president of ICER.

Peter Bach, director for the center for health policy and outcomes at Memorial Sloan Kettering Cancer Center, is troubled by Zolgensma’s price and believes ICER’s updated cost-effectiveness analysis takes too many liberties.

“You can look at this in either of two ways. It’s an amazing treatment and only a few kids will need it so a million here and million there is not worth more than shoulder shrug,” he said. “Or we have a big problem. Biopharma has been entirely redirected to rare diseases because the market will tolerate any price and the FDA will require pretty minimal data.”

STAT News

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