With Zolgensma’s Approval, Debate Shifts to Pricing and Availability of World’s Costliest Drug
Zolgensma, approved for children with spinal muscular atrophy (SMA) up to 2 years old, has two claims to fame: It is both the first gene therapy ever developed to treat a neuromuscular disease, and it’s by far the world’s most expensive drug.
At $2.125 million, a 60-minute intravenous infusion of Zolgensma costs more than a 2,000-square-foot apartment in Paris with a view of the Eiffel Tower, a brand-new 2019 Aston Martin One-77 — among the fastest cars ever made — or a Cirrus Vision SF50 private jet.
But for babies and infants with the crippling disorder, Zolgensma is no luxury. It’s being marketed as a single intravenous administration that’ll last a lifetime.
“We’ve been responsible, and analytical and value-based in how we priced the medicine,” Novartis CEO Vas Narasimhan told reporters after the U.S. Food and Drug Administration (FDA) approval of Zolgensma on May 24. “Right now, we’re focused on getting Zolgensma to patients across the United States and trying to address this devastating disease.”
Dave Lennon is president of AveXis, the Novartis subsidiary that developed Zolgensma (onasemnogene abeparvovec-xioi). He called the treatment’s cost — $425,000 per year for five years if paid over an installment plan — a “fair and reasonable price.”
By comparison, Spinraza (nusinersen) — the Biogen therapy approved by the FDA in December 2016 to treat all types of SMA regardless of a patient’s age — costs nearly twice as much over a 10-year period. At $750,000 for the first year and $375,000 every year thereafter, Spinraza’s price tag comes to $4.125 million over the course of a decade.
Lennon said AveXis also benchmarked Zolgensma against therapies for other ultra-rare genetic pediatric conditions.
“When we look at the top five products in those areas, this price at roughly $2 million is 50% below the 10-year cost,” he said. “This price is also backed by five-year, outcomes-based agreements that payers can employ, and allows for rebates should the product not perform as expected.”
‘Better ways’ needed to lower costs
In a comment emailed to SMA News Today, the National Organization for Rare Disorders (NORD), which represents 270 patient advocacy groups, praised the FDA’s approval of Zolgensma as “an exciting development” for SMA patients.
“But we are deeply concerned about the price of this product — both from the perspective of the individual patient and the healthcare system overall,” said Rachel Sher, NORD’s vice president for regulatory and government affairs. “We need to ensure that all patients can benefit from this lifesaving treatment regardless of their income or insurance status.”
Barry Byrne, MD, director of the University of Florida’s Powell Gene Therapy Center, said that given the high cost of Zolgensma, its manufacturer will “need to demonstrate durability, and payment will likely be linked to a requirement for ongoing efficacy.”
Byrne’s facility, located at the UF campus in Gainesville, has done 11 clinical trials with adeno-associated virus (AAV) vectors — more than any biotech company, he said. His current research focuses on dramatically bringing down the cost of AAV production.
“High-cost drugs will place additional burden on healthcare systems, and such drugs marketed only in the U.S. will precipitate a crisis in the worldwide community of rare disease patients related to access,” he said. “To make drugs like Zolgensma broadly available, drug developers will have to develop better ways to test their products quickly and efficiently to reduce clinical development costs and manufacture products at the lowest possible cost.”
To that end, AveXis in February purchased a 700,000-square-foot production facility in Longmont, Colorado, that was previously owned by AstraZeneca.
The company, which Novartis acquired for $8.7 billion last year, has also opened and expanded existing plants in California, Illinois, and North Carolina, and is hiring 1,000 employees this year in anticipation of the huge demand for Zolgensma, which analysts predict could generate annual revenues exceeding $3 billion by 2024.
Getting insurers to pay
Some SMA patients are raising eyebrows at Zolgensma’s seven-figure price tag.
“The price is ridiculous, but these companies can get away with it because insurance companies are going to pay any price so they’re not accused of letting children die,” said Lupa P., a user commenting on the SMA Patient Forum. “These companies are putting up ransoms on children’s lives and there’s no choice but to pay them.”
Tyler Dukes is a 31-year-old software engineer from Dallas with SMA type 3. He said his insurer — Blue Cross Blue Shield of Texas — repeatedly denied him coverage for Spinraza on the grounds he was over 15 years old.
“My insurance company was using my age as an excuse because nobody in the clinical trials [for Spinraza] was over 15,” said Dukes, who uses a power wheelchair to get around. “Insurance companies play by a whole different set of rules.”
Eventually, Biogen agreed to pay for his treatment. But the way Dukes sees it, “the battle for insurance coverage is almost as difficult as the actual science behind this drug, and that’s going to be the next big challenge: getting insurance companies to pay for it.”
In contrast, Kevin Schaefer — a BioNews community development manager who has SMA type 2 — noted that the eight Spinraza injections he’s received in the past year and a half have already cost more than $1 million.
“If you look at adults who could be on Spinraza [for] years, they’ve already surpassed the cost in regards to treatments. So insurance companies will see that it may be an initial upfront payment, which may be a bit more painful for them, but in the long run, there will be cost savings,” Schaefer said.
The Institute for Clinical and Economic Review (ICER), an independent agency that evaluates the value of prescription drugs, appears to agree with that assessment.
Limited impact on Spinraza, for now
In an addendum to its April 3 final evidence report, ICER concluded that AveXis would have to charge between $1.1 million and $1.9 million per treatment to reach cost-effectiveness thresholds of $100,000 to $150,000 per quality-adjusted life year (QALY) gained — a standard method of evaluating the value for money of a given therapy.
Likewise, it found that to reach alternative thresholds of $100,000 to $150,000 per life year gained, a value-based price benchmark for Zolgensma would range from $1.2 million to $2.1 million.
“Given the new efficacy data for the pre-symptomatic population, the price announced today falls within the upper bound of ICER’s value-based price benchmark range,” Steven D. Pearson, MD, president of the Boston-based ICER said in a May 24 press release.
“Insurers were going to cover Zolgensma no matter the price, and Novartis has spoken publicly about considering prices that approached $5 million,” Pearson added. “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.”
Rodney Howell, MD, a pediatrics professor at the University of Miami’s Miller School of Medicine, said he’s not at all surprised by Zolgensma’s $2.125 million price tag.
“It’s a great deal of money for a lifesaving drug, even spread over a five-year period,” Howell said. “Obviously, everybody in the world will not be able to get the drug, but I’m also confident that Novartis will do what other drug companies have done: it will work very hard so that everybody who would benefit from Zolgensma gets it.
“One of the reasons they charge such high prices is so they can help people who can’t afford it.”
Howell, who also chairs the board of directors for the Muscular Dystrophy Association, said “the entire neuromuscular community is very excited about the advent of this drug on the market.”
Even so, he doesn’t expect Spinraza sales to plummet anytime soon.
“A number of families will choose to stick with nusinersen — which has been safe and dramatically effective — rather than introduce a gene into the body,” Howell said.
“There will be some downturn with Spinraza, but I doubt it will be dramatic in the immediate future. We’ll have to see if the viral therapy continues to prove safe and effective over a long period of time.”