The US regulators approved the use of Luxturna last month, making the medicine the first type of therapy, where a healthy gene replaces a non-functional or a disease-causing condition. Called Kymriah, the drug was targeted at a very specific form of blood and bone marrow cancer.
Just like two other gene therapies which got approved previous year in the in the US, Luxturna is more expensive than nearly every medicine across the global market. Now the highest priced therapy in the country - outpacing drugs like Spinraza at $750,000 for the first year of therapy - it falls on Spark to come up with the right pricing model that can persuade payers to cover the procedure for a small group of under 2,000 potential patients, with fewer than 20 new patients per year.
Speculation about how Spark would price the one-time therapy has been ongoing for several years now. Drugmakers have historically offered little explanation for the prices they charge, other than to cite the high cost of developing a drug and the fact that so many drugs fail during trials and must be abandoned. Developers in Europe found this out the hard way when they priced gene therapy treatments at upwards of $1 million, and were unable to market the drugs. Both are recurring treatments versus the one-time nature of Luxturna. The pharmaceutical company said that is now negotiating with other insurers for similar payment schemes linked to treatment outcomes.
And on the other side of the Atlantic the Association of the British Pharmaceutical Industry (ABPI) has often suggested that expensive treatments could be funded by instalments, or vary price per patient according to effectiveness.
Traditional models usually require the hospital or institution administering a specialty medication to purchase it upfront and then charge the payer. So this means the company will pay rebates to certain health insurers if the treatment is not wholly effective. And knowing full well just how much today's closely-watched marketing plan will be reviewed by the healthcare system, Spark's pricing team has come up with a mix of rebates and proposed staggered payment models created to ease past barbed payer barriers that can cripple any drug launch. Under one arrangement with the non-profit insurer Harvard Pilgrim, Spark will repay some of Luxturna's costs if patients don't experience the expected improvements in vision. "We are encouraged by CMS' willingness to engage with us in exploring a new model".
Express Scripts has a deal with Spark to distribute Luxturna.
Marrazzo's not saying how much he's offering in rebates, but when I asked him why not a full refund for patients who don't respond adequately, he said that's not possible.
After the FDA approval, speculation turned to its price. "Our system can not handle unjustified prices like this, and the new payment models announced today are merely a way to disguise a price that is simply too high".
Firstly Spark suggested a rebate system based on the efficacy of the treatment. The genes to be taken by injection treat a rare form of blindness caused by an inherited genetic mutation.