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 Assessments by the nonprofit Institute for Clinical and Economic
Review (ICER) have become increasingly influential in U.S. drug
pricing and are taken into consideration by health insurers and
pharmacy benefit managers making decisions about payments and
patient access to treatments.
Boston-based ICER has been looking at Biogen's Spinraza and Novartis'
Zolgensma since last year. The extremely high cost of new treatments
for rare conditions has placed SMA at the center of the drug
affordability debate.
In its final report that largely mirrors a draft issued in February,
ICER urged the drugmakers to balance innovation with affordability
for health systems, which translates to significantly lower prices.
The group said Spinraza's list price of $750,000 for the initial
year and $375,000 annually thereafter needs to be "far lower" to be
cost effective.
Spinraza, an important growth driver for Biogen, took in $1.7
billion in 2018 sales.
To determine value, ICER used a measure known as "quality-adjusted
life year” (QALY), in which each year of healthy or near-healthy
life resulting from the treatment is worth $100,000 to $150,000.
SMA can lead to paralysis, breathing difficulty and death within
months for babies born with the most serious Type I form of the
disease. It is the leading genetic cause of death in infants.
Novartis has not set a price for Zolgensma, which could get U.S.
approval next month. The Swiss drugmaker has said its one-time
treatment would be cost effective at up to $5 million.
Gene therapies use engineered viruses to carry healthy genetic
material into a person's cells to replace faulty or mutated genes
that cause a disease or condition.
"The price for Zolgensma should be lower than the hypothetical $4-$5
million price the manufacturer has suggested could be justified,"
ICER concluded.
Using the QALY benchmark, ICER said Spinraza would need to cost
between $72,000 and $130,000 for the first year of treatment, and
cost $36,000 to $65,000 per year after that, for infants not yet
showing symptoms of the disease.
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With an alternative benchmark, known as life-year gained (LYG) based
on the additional number of years a person lives due to a treatment,
Spinraza is worth $83,000 to $145,000 in year one, and $41,000 to
$72,000 annually thereafter, ICER determined.
Zolgensma would be worth $310,000 to $900,000 for Type 1 SMA
patients based on the QALY assessment, or $710,000 to $1.5 million
using the LYG calculation, ICER said.
"These treatments will be covered by U.S. insurers regardless of the
pricing, but the ripple effect of pricing decisions like these
threatens the overall affordability and sustainability of the U.S.
health system," said ICER Chief Medical Officer Dr. David Rind.
Novartis contends the rare disease community believes that $500,000
per QALY is a more-appropriate standard for transformational
therapies. At that level, Zolgensma would be cost effective at $5
million.
"The value measures and thresholds employed by ICER in this report
are designed around the status quo of chronic care management and
cannot possibly capture the full benefits of disease-modifying
treatments delivered as a one-time administration," Novartis said in
a statement.
Biogen, in an emailed statement, said Spinraza is the standard of
care for SMA and has benefited more than 6,600 people. It noted that
Novartis has so far reported Zolgensma results for only 15 patients.
ICER also recommended providers, payers, and manufacturers cooperate
on so-called "outcomes-based contracts." Such arrangements pay
drugmakers based on the effectiveness of their treatments or offer
refunds if they do not work.
(Reporting by John Miller; additional reporting by Deena Beasley in
Los Angeles; Editing by Bill Berkrot)
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