|
 Spark Therapeutics Inc plans to launch its recently approved
Luxturna treatment for an inherited genetic mutation that causes
blindness in March. The drug is to be administered only once, by
injection, and Spark plans to charge $425,000 per eye, an
unprecedented price.
But what is grabbing the attention of other drugmakers is not just
what might be called an eye-popping price to treat a condition that
Spark estimates affects 1,000 to 2,000 people in the United States,
but the ways Spark is looking to help payers ranging from the
federal government to private insurers absorb the drug's high cost,
including spreading out payments over several years.
"We're laying the groundwork for the future of our pipeline and the
future of one-time curative gene therapy treatments," Spark's chief
executive officer, Jeffrey Marrazzo, said in an interview at the
JPMorgan Healthcare Conference in San Francisco this week.
The high cost of prescription drugs has become an increasingly
critical and contentious issue.
Healthcare spending accounts for 18 percent of the U.S. economy and
has been rising faster than the rate of inflation as drugs and
medical services costs increase. An influx of very expensive drugs
that offer a one-time cure – such as a hepatitis C treatment from
Gilead Sciences Inc – has already stretched state and federal
budgets.
The U.S. Centers for Medicare and Medicaid Services (CMS), which
provides coverage for 125 million elderly, poor and disabled
Americans, spends hundreds of billions of dollars annually on
medicines.
CMS is trying to tackle the overall high drug costs. It has asked
for input from private health insurers and drugmakers on payment
models that are expected to influence how medical breakthroughs for
millions more patients are covered.
Spark itself is working with CMS on a legal structure to allow
government and private-sector health plans to pay for Luxturna,
which restores some vision for most patients with the inherited
mutation, over several years, rather than in a single payment,
without hurting its profits.
Spark has also offered refunds if the treatment stops working and
ways for payers to buy the drug outside of hospitals, which can
significantly mark up the price of a medicine administered in their
facilities.
In interviews with Reuters, executives from large drugmakers
including Eli Lilly & Co, GlaxoSmithKline Plc, Roche Holding AG,
Merck & Co Inc and Bristol-Myers Squibb Co said they would pay close
attention to the outcome of Spark's payment discussions.
They are also following two revolutionary gene-based therapies for
blood cancers from Novartis AG and Gilead Sciences. Novartis'
Kymriah, with a list price of $475,000, is covered by CMS based on
outcomes achieved for pediatric and young adult leukemia patients by
the end of the first month of treatment.
Spark is also looking at guaranteeing its product. It is working on
a plan with pharmacy benefits manager Express Scripts Holding Co on
a long-term payment schedule for privately insured patients.
[to top of second column] |
Spark plans to sell Luxturna through specialty pharmacies, including
one owned by Express Scripts, so that large employers and health
plans can avoid hospital markups that could reach hundreds of
thousands of dollars. Express Scripts is working with Spark on
provisions to refund money to insurers if the drug does not work as
promised.
"Spark is willing to guarantee its product over a period of time and
potentially extend that payment over a period of time; it needs
someone to be a chassis," Express Scripts CEO Tim Wentworth said.
POTENTIAL ROADBLOCKS
Large drugmakers already offer refunds on some drugs, including
treatments for diabetes or high cholesterol, if they do not provide
a benefit.
But it is tougher to create a long-term payment model for a very
expensive drug administered only once. The U.S. system is built to
cover the whole cost immediately, and CMS needs to determine how
smaller payments could be made without triggering
bigger-than-intended discounts.
CMS does not negotiate prices or purchase drugs, but it sets ground
rules for the managed care companies and state Medicaid agencies
that do. CMS chief Seema Verma told Reuters last year that she was
looking at new payment models for high-priced breakthrough
treatments. [nL1N1O028V]
Another road block under discussion: Patients often change
insurance, or move between private and government-sponsored health
coverage depending on their age or employment status. Under a
deferred payment plan, the government could be billed for patients
who they no longer cover.
"The innovation is there, but the financing vehicles need to catch
up," said Jack Bailey, GlaxoSmithKline's U.S. pharmaceuticals head.
Paul Biondi, head of business development at Bristol-Myers, said the
drugmaker is closely following the payment outcome for gene
therapies. "I'm glad other people are plowing the ground," he said.
The next U.S.-approved gene therapy may come from Bluebird Bio. The
small biotech company expects to submit this year a potentially
one-time treatment for the inherited blood disorder beta thalassemia,
which can cause severe anemia. Bluebird also aims to seek approval
for a gene-based cancer therapy in 2019.
"We've been thinking about pricing for years," Jeffrey Walsh,
Bluebird's chief financial and strategy officer, said. "Now we can
bring in the regulators."
The company is talking to the U.S. government, as well as
governments in the UK, France, Germany and Italy, about pricing over
a period of time and how to prove a drug is working.
"The system in the U.S. isn't built for a single intervention,"
Walsh said.
(Reporting by Caroline Humer; Editing by Michele Gershberg and
Leslie Adler)
[© 2018 Thomson Reuters. All rights
reserved.] Copyright 2018 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
