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Our Take: Novartis sets $2.1M price for spinal muscular atrophy gene therapy, watchdog agrees

Jun 03, 2019
AveXis, a Novartis unit, announced that its newly approved treatment for spinal muscular atrophy (SMA), Zolgensma (onasemnogene abeparvovec-xioi), will be priced at $2.125 million. The drug is a one-time treatment for patients with SMA who are less than two years of age. SMA is a rare disease, occurring in about 1 in 10,000 live births, AveXis said, yet it’s the leading cause of genetic infant mortality.

A neuromuscular disease that results in the loss of motor neurons and progressive muscle wasting, in its most severe form, type 1, SMA results in death or the need for permanent ventilation support by 24 months of age if left untreated.

AveXis said Zolgensma is designed to address the genetic root cause of SMA by providing a functional copy of the human SMN gene to halt disease progression through sustained SMN protein expression with a single intravenous infusion.

ICER, a nonprofit research institute that evaluates the cost effectiveness of pharmaceuticals, said Novartis’ price is within the upper bound of the organization’s value-based price benchmark range.

“Insurers were going to cover Zolgensma no matter the price, and Novartis has spoken publicly about considering prices that approached $5 million,” said Dr. Steven Pearson, president of ICER. “It is a positive outcome for patients and the entire health system that Novartis instead chose to price Zolgensma at a level that more fairly aligns with the benefits for these children and their families.”

Our Take: If you are shocked at the price tag, spend a few minutes Googling “spinal muscular atrophy.” Read up on the genetic disorder, watch a few videos and then see if your position has softened a bit.

AveXis has done its homework and is handling the rollout smartly. Initially, Zolgensma was rumored to be priced at $5 million or more. Instead, the company kept the price within ICER’s value-based estimate.

It’s also a one-time therapy designed to replace a lifetime of chronic therapy for patients with SMA. Zolgensma is priced 50% lower than the 10-year cost (at wholesale acquisition cost) of the only other treatment for SMA, Biogen’s Spinraza (nusinersen). Also, according to Novartis, it’s priced 50% below 10-year treatment costs for genetic pediatric ultra-rare diseases, estimated at $4.4 million to $5.7 million.

Right out of the gate, AveXis is working with payers to create five-year outcomes-based agreements, including spreading payments over the five-year time frame. The company has partnered with Accredo for the five-year payment plan, “to help ease possible short-term budget constraints, especially for states, small payers and self-insured employers.”

In AveXis’ most recent press release, Dr. Steven Miller, Cigna’s chief clinical officer, said this:

“While there are many questions that we as a health care system need to consider, what does not change is our work to ensure that these life-saving medications are affordable and available to the patients that need them. We look forward to continuing the work we have started with AveXis to find unique solutions like installment payments and outcomes-based agreements for these life-changing gene therapies.”

Yes, that Steve Miller—the guy who built his brand at Express Scripts as the ultimate pharma hardliner. AveXis is doing something right, for Steve Miller to be quoted in its press release.

There is a larger debate to be had about what we’re willing to pay for novel therapies as pharma continues to focus research efforts on rare diseases.

By our math, about 385 newborns each year in the U.S. will be diagnosed with SMA. That means Novartis will add about $500 million in annual sales to its top line, assuming that it can take 60% of the market away from Biogen. Nothing to sneeze at, but in today’s market, that’s hardly a blockbuster.

More important, there are 385 families who will be unburdened by not having to care for a seriously disabled child — or having to worry about losing that child. It’s hard to put a price on that.

What else you need to know
A broad bipartisan draft health care legislation package containing dozens of provisions was recently released by the Senate Health Committee. The Lower Health Care Costs Act of 2019 addresses issues such as surprise billing, prescription drug prices (via changes in patent protections), transparency surrounding drug rebates, vaccine “hesitancy,” pregnancy-related mortality and access to personal health records. The package does not address more controversial issues such as Medicare for All or repealing the Affordable Care Act. The intent is to bring the legislation to the Senate floor for a vote this summer.

House committee leaders alsreleased draft legislation to lower drug costs through reforms to Medicare Part D. The bipartisan drug pricing bill would cap patients’ out-of-pocket costs and increase the proportion of costs that health plans are responsible for in the “catastrophic” phase.

Forcing oncology practices to take on downside risk in CMS’ Oncology Care Model in July could result in more than half of them owing the government, an analysis by Avalere Health indicates. Currently, CMS is planning to require practices that haven’t achieved a performance-based payment in the first four performance periods of the bundled-payment model to switch from a one-sided, upside risk arrangement to a two-sided risk arrangement next month — or leave the program.

The FDA’s recent approval of Novartis’ Piqray (alpelisib) is noteworth for several reasons. The drug, a PI3K inhibitor, is the first in its class to be indicated for solid tumors, and it’s the first new molecular entity approved under the FDA’s Real-time Oncology Review pilot program. According to Novartis, Piqray is the first treatment approved specifically for patients with advanced HR-positive/HER2-negative breast cancer who have a PIK3CA mutation. The mutation affects approximately 40% of all patients with this type of breast cancer and has been linked to poor prognosis. The FDA also approved a companion diagnostic test, Qiagen’s therascreen.

People with migraine pain may have a new treatment option now that the FDA has cleared Theranica’s Nerivio Migra, a device that’s worn on the upper arm and uses electronic pulses controlled by a smartphone to alleviate pain. The wearable is indicated for the acute treatment of migraine with or without aura in adults who do not have chronic migraine. The Israel-based company plans to launch the product in the U.S. later this year.

UnitedHealth Group pointed to price variations for diagnostic tests as a potential way to reduce overspending. In a neresearch brief, the country’s largest private health insurer stated that consumers could have saved $18.5 billion in 2017 if high-priced services for seven groups of common diagnostic tests — including MRIs, ultrasounds, CT scans and mammography — were reduced to amounts that many providers have already agreed to accept. As an example, the analysis revealed that the price for an echocardiogram ranged from $210 to $1,830 for UnitedHealth’s commercial plan members. The researchers said geographical differences did not account for the variations in pricing.

Mallinckrodt plans to spin off its specialty generics business to shareholders, according topress statement by the U.K.-based biopharmaceutical firm. If the board approves it, the move will result in two publicly traded companies: one (re)named Sonorant Therapeutics that focuses on specialty branded drugs and one that will retain the Mallinckrodt name and focus on specialty generic products, along with the manufacture of active pharmaceutical ingredients (APIs).

What we’re reading
Scripps Health detangled clinical workflows for 3,000-plus physicians. Becker’s Hospital Review 5.29.19 (Registration required)

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