Notes From The JPM ’17 Vortex: Trump, Rainstorms & The Price You Pay

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the spotlight or funding that drug companies do; there’s long been resentment that pharma for years has gotten everything it wants from Washington.

Perhaps the universe was exacting some small measure of revenge this week with all the rain—some of San Francisco’s heaviest in decades—that pounded the conference. (Although device makers get rained on, too. Perhaps it was the weather equivalent of punching Shkreli’s wife.)

The wet, windy weather left dozens of umbrellas strewn on sidewalks and in gutters like roadkill. Desperate attendees searching for replacements ducked into chain drugstores like CVS and Walgreens, which were more than happy to oblige with $15 and $25 umbrellas. The hasty mark-up was obvious from the garish orange price stickers. Wait a second… CVS and Walgreens also own drug-purchasing middlemen that work on behalf of insurers and employers—and are a source of some of the markups that get blamed on the drug companies, say the drug companies. Sounds like something the president-elect should tweet about. Wet! Sad!

What Price Gene Therapy: No discussion about what drugs are actually worth is complete without a mention of gene therapy. Spark Therapeutics (NASDAQ: ONCE) could be the first to test the American market, as it expects to complete an FDA application for its treatment for certain kinds of inherited blindness, voretigene neparvovec, in the next few months, CEO Jeff Marrazzo told Xconomy this week. If accepted, it would be the first FDA review of a gene therapy. If approved, the pricing question would follow.

Unlike other drug types, gene therapy is a single procedure meant to produce a long lasting, if not permanent treatment. Drug companies would love to be paid based in large part on the long-term savings that a cure would save. But what if a treatment stops working after a few years? After its Strimvelis was approved in Europe last year for a rare immune system disease, GlaxoSmithKline said it would charge $665,000 upfront but would give money back if it didn’t work. (Before Strimvelis, the $1 million gene therapy Glybera from UniQure was approved in Europe but barely got off the ground.)

Spark CEO Marrazzo wouldn’t talk about specific pricing models, but he did note that 93 percent of the patients in the voretigene neparvovec Phase 3 trial have gained back some visual function, and that the treatment has been proving more and more durable, which Spark will take into account when building a case about the drug’s value. “You multiply that out, and then you have a value point,” Marrazzo said, but added it’s unclear whether that value will be paid up front or over time. “We’re going to at least put a stake in the sand on alternative ideas as we go through this year.”

There’s plenty of talk about gene therapy pricing, including a meeting Marrazzo says the nonprofit group ICER convened last month with payers and gene therapy manufacturers to talk about how to price and pay for gene therapies in the U.S. “The good news is the conversations are happening and people are talking about the different ways of trying to do this,” he says. “The question is how much will get accomplished before [Spark] has something that can help people.”

Coulda, Woulda, Sarepta: One of the biggest biotech stories of 2016 was Sarepta Therapeutics (NASDAQ: SRPT), which saw its eteplirsen (Exondys 51) become the first-ever approved therapy for Duchenne muscular dystrophy. It was highly controversial, with the FDA drug chief Janet Woodcock overruling negative recommendations from her staff. The FDA gave eteplirsen an “accelerated” approval; to stay on the market, Sarepta must prove by 2021 that the drug is actually working.

Sarepta CEO Ed Kaye told investors at J.P. Morgan that the launch is off to a rocky start, but it was good enough to send shares up more than $9, or 31 percent, before Trump’s Wednesday comments shaved a bit of cream off the top.

Mention of the approval was enough to make BioMarin Pharmaceutical (NASDAQ: BMRN) CEO Jean-Jacques “JJ” Bienaimé bristle. The San Rafael, CA, company had bet on a rival Duchenne drug, drisapersen, by buying Prosensa for $680 million in November 2014. But the FDA rejected the drug last January, and BioMarin shelved it five months later. Bienaimé wasn’t surprised to see insurers pushing back against Sarepta’s scanty clinical evidence. “Payers are not fools,” he told Xconomy.

Some FDA staffers questioned whether the eteplirsen approval, pushed by a powerful patient community, opened the door for other patient groups to pressure FDA. The agency has moved recently to include patient perspectives into their decisions—and the new 21st Century Cures Act directs it to do so even more.

But Bienaimé and his chief medical officer Hank Fuchs said the eteplirsen approval was an outlier, and we’re not likely to see the same amount of pressure work again for such a poorly characterized drug. Like any good clinical expert, Fuchs expressed the moment in statistical terms: “The ratio of patient-activism voices divided by number of patients successfully treated in clinical trials might be an all-time exceptional ratio.”

Old postcard of the St. Francis Hotel in San Francisco from K P via a Creative Commons 2.0 license.

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