Spark CEO Marrazzo on Gene Therapy Pricing & Paving the Way for the Field

Xconomy National — 

[Updated, 1/13/17, 11:15 a.m. ET]  After decades of research and scientific ups and downs, the first U.S. gene therapy, a single, long-lasting treatment called voretigene neparvovec (Luxturna) for rare, inherited blindness, is now on the market. But the commercial challenge facing its developer, Spark Therapeutics, is daunting. Can Spark lead the way in showing that the new kinds of payment models it is experimenting with will succeed in getting the healthcare system to pay for such pricey, one-time treatments?

History isn’t on Spark’s (NASDAQ: ONCE) side. Two gene therapies approved in Europe since 2012, from UniQure (NASDAQ: QURE) and GlaxoSmithKline (NYSE: GSK), launched at high prices and struggled commercially. UniQure’s treatment, known as Glybera, for a rare metabolic disorder, was pulled from the market. GSK’s Strimvelis, for a rare immune disease, included a money-back guarantee if the treatment didn’t work, but still has only reportedly been used in a handful of patients. Two cancer treatments that use genetic modification, known as CAR-T therapies, were approved in late 2017 but have, reportedly, initially struggled in the marketplace with their six-figure price tags. Now here come’s Spark’s Luxturna, with a list price of $425,000 per eye.

Unlike conventional medicines, gene therapies are meant to provide a durable effect, if not a cure, with a single treatment. Determining a value for such treatments, and how to pay for them, has been a major question looming over biopharma and the U.S. healthcare system as more gene therapies inch closer and closer to market. Spark floated the idea of charging north of $1 million for its treatment in late 2017. Analysts at the Institute for Clinical and Economic Review countered in a draft report that Luxturna at $1 million “would require large discounts to reach commonly used thresholds of cost-effectiveness.”

That’s why, Xconomy reported Thursday, gene therapy developers have been closely watching Spark to see how it priced its treatment, what type of payment models it chose, and going forward, how quickly payers reimburse and patients get access. Spark, whose treatment is for the 1,000 and 2,000 people in the U.S. with a genetic mutation (RPE65) that leads to vision loss often starting in childhood, will help set the tone for what they should expect.

In early January, the company announced Luxturna’s price and a deal with New England insurer Harvard Pilgrim Health Care on a plan that includes rebates tied to the drug’s durability. In a departure from typical practices, Spark will sell the therapy directly to Harvard Pilgrim, not the medical center doing the procedure, which avoids potential price markups—something Spark hopes to replicate with drug contact negotiator Express Scripts (NYSE: ESRX).

CEO Jeff Marrazzo (pictured) says “a number” of additional contracts are in the works, with updates coming in the weeks and months ahead. Spark also has proposed payment installment plans to the Centers for Medicare and Medicaid Services (CMS), though it has yet to disclose details.

[Updated with information from new ICER report] On Friday, ICER countered with a new attack on Luxturna’s price. In a revised report, the agency concluded that, assuming Luxturna produces a 10- to 20-year benefit, its price should be reduced by 75 to 82 percent to be cost effective for 15-year-olds—the average age of the patients in Spark’s clinical trials. Even when accounting for indirect “societal benefits” as well, ICER said, the therapy’s price should still be reduced anywhere from 50 to 57 percent. “Even when assuming an as-yet unproven lifetime benefit for the therapy, the cost remains well above commonly accepted thresholds,” ICER said in a statement. (Xconomy reached out to Spark and will update this story with any response.)

With Luxturna’s launch just underway, Xconomy sat down with Marrazzo at the J.P. Morgan Healthcare Conference in San Francisco this week to discuss its strategy on pricing and payment models and the company’s role in paving the way for future gene therapies. Edited excerpts from the conversation follow below.

Xconomy: Do you feel a responsibility to the field of gene therapy to ensure that Luxturna succeeds?

Jeff Marrazzo: I feel a certain responsibility to make sure … Next Page »

Single PageCurrently on Page: 1 2