Novartis Gene Therapy Could Be Cost-Effective Up to $1.5 Million

(Bloomberg) -- Novartis AG’s new gene therapy targeting a disease that kills infants would be cost-effective at as much as $1.5 million, according to a U.S. nonprofit that assesses the value of drugs, well short of the potential price range the company has suggested.

Zolgensma, a one-time treatment for a severe genetic disorder called spinal muscular atrophy, would provide substantial benefits for patients, according to the analysis from the Boston-based Institute for Clinical and Economic Review. Novartis has said its therapy could be worth $4 million to $5 million.

Switzerland-based Novartis is now wrestling with the question of how to price a potential cure. As a number of drugmakers advance into gene therapy in a bid to fix potentially lethal DNA flaws, governments, insurers and other payers are trying to figure out how to pay for the revolutionary treatments meant to be given to patients a single time.

If therapies like Zolgensma “come in at an appropriate price there’s hope of fair distribution of dollars in such a way that everyone can benefit and everyone can have access,” David Rind, ICER’s chief medical officer, said in an telephone interview.

If the costs are too high “we’re not going to have enough money as a society to pay for all these therapies and continue to pay for medical care for the rest of the population,” he said.

The experimental treatment, which could be launched in the first half of 2019, would be an alternative to Biogen Inc.’s Spinraza, a treatment given in regular doses that patients must take for the rest of their lives. Spinraza costs $750,000 in the U.S. for the first year and $375,000 a year thereafter. It’s been on the market for two years.

ICER, whose reports have become increasingly influential among payers and companies as drug prices rise, developed its peak cost-effectiveness estimate using “alternative measures.” Using a traditional approach, it saw Zolgensma as cost-effective at a price range of $310,000 to $900,000. Novartis said the report also shows that the treatment could be cost-effective at about $5 million using yet another measure.

While both treatments for SMA appear to dramatically improve the lives of children with the disease, Spinraza’s price would require a “substantial discount” to meet traditional cost-effectiveness ranges, the U.S. group said.

The Biogen treatment “is a really good, important therapy,” Rind said. “It does work for a devastating illness. Despite that, the price is incredibly high.”

Biogen Chief Medical Officer Al Sandrock said the ICER report failed to accurately describe differences in robustness and quality of evidence between Spinraza and Zolgensma.

Sandrock said in an interview that the drug’s trials evaluated significantly more patients over a longer period of time. “We stand by Spinraza’s price, which was determined through a rigorous and thoughtful process,” he said.

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