Another Gene Therapy Arrives With a Million-Dollar Price Tag

(Bloomberg) -- Another million-dollar gene therapy is hitting the market.

Bluebird Bio Inc.’s treatment for a severe, inherited blood disorder will cost 1.58 million euros ($1.8 million), the Cambridge, Massachusetts-based company said Friday. Called Zynteglo, the product is Bluebird’s first and was cleared by Europe’s drug regulator last month.

Zynteglo joins Novartis AG’s $2.1 million Zolgensma in the vanguard of new one-time therapies aimed at correcting genetic defects that cause serious disease. While the treatments offer dramatic benefits and potential cures, they also come with steep price tags that pose challenges for governments and insurers, while raising questions about long-term benefits and safety.

Bluebird’s Zynteglo is authorized for patients aged 12 years and older who are afflicted with beta thalassemia, a rare disorder that curbs the blood’s capacity to carry oxygen throughout the body. Children with the disease may fail to grow and gain weight normally, and some patients need regular transfusions to replenish their blood supply.

Costs for Zynteglo will be spread over five years at 315,000 euros a year, and the last four payments will be dependent on whether it eliminates patients’ need for transfusions, said Nick Leschly, Bluebird’s chief executive officer. By averting a lifetime of treatment, the therapy stands to save on long-term expenditures, he said.

“After five years we say, even though the treatment benefit continues, the cost to the system stops,” he said in an interview. “I think it’s the sensible, right thing to do.”

Getting the therapy to EU patients will still take some time. Bluebird, which expects approval in the U.S. in 2020, has said it will carry out a country-by-country effort across Europe to gain reimbursement.

“This a model that’s new and different,” Leschly said. “It’s not well trodden ground.”

The company is planning nine treatment centers in Europe, including four in Italy. That’s where the disease has its greatest concentration in the region, with about 7,000 patients suffering from a severe form. Bluebird has a manufacturing site in Germany.

Companies have struggled to sell gene therapies. Only a handful of patients received Strimvelis, a $665,000 treatment for a rare immune disorder, before GlaxoSmithKline Plc offloaded it to Orchard Therapeutics Plc, and UniQure NV in 2017 withdrew its $1 million gene therapy for another rare condition because of extremely limited use.

Novartis is also planning to offer novel payment options, including spreading out costs over years, refunds when treatment fails to work and discounts for insurers that provide swift coverage. Some of those discount proposals are threatened by a law that requires drug companies to charge the U.S. Medicaid program their lowest price; that could mean deep discounts for patients covered by the government program, whether or not they benefit from the new therapies. Companies are working with lawmakers and payers to make the payment arrangements work, Leschly said.

“It is something we need to sort out,” he said. “It’s not just a few patients and it’s not just one disease; it’s going to be many diseases over time. There should be no barrier to doing it.”

--With assistance from John Lauerman.

To contact the reporter on this story: James Paton in London at jpaton4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, John Lauerman, Thomas Mulier

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