Biotech of the Year: Spark Therapeutics
Spark's Chief Operating Officer said that by the end of June Luxturna had "favorable" coverage on 81% of commercial lines.
Expensive, but selling:
Sales of about $16 million to date in 2018 suggests around several dozen Luxturna injections, each of which comes at a list price of $425,000, have been given this year.
It's still early to tell whether outcomes-based deals for Luxturna are panning out as planned, but the industry is paying close attention as they could have big implications for gene therapy commercialization.
It was almost a year ago the Food and Drug Administration gave a first-of-its-kind approval to Spark Therapeutics' Luxturna, creating a milestone moment for gene therapy and the science backing it.
But perhaps more important than the approval itself was the potential effect it could have on the drug payment system. In that respect, Spark has played the role of a trailblazer. How it navigates the commercial landscape will be eyed by a slate of biotechs hoping to bring other one-time gene treatments to market.
Indicated for a rare eye disease, Spark's therapy carries a list price of $425,000 per injection, or $850,000 for each patient. Such a high price tag, coupled with Luxturna being billed as a one-time treatment, has been a tough pill to swallow for a payment system built around chronic illnesses treated over time with more moderately priced medicines.
"Our system cannot handle unjustified prices like this," David Mitchell, president and the patient group Patients For Affordable Drugs, said in a January statement that came as Spark announced Luxturna's list price. He added that new payment models, like outcomes-based contracts, were "merely a way to disguise a price that is simply too high."
The past 12 months provided a first glimpse of whether Mitchell's criticism holds water.
In many ways, the jury is still out. What is clear, though, is patients are getting Spark's therapy. Through the first nine months of 2018, the biotech recorded $15.6 million worth of Luxturna sales, suggesting several dozen injections have been given.
To help ensure uptake, Spark reached outcomes-based agreements with Harvard Pilgrim and affiliates of Express Scripts. It also submitted a payment proposal to the Centers for Medicare and Medicaid Services. By the end June, 81% of commercial lines had "favorable" coverage of Luxturna, according to Spark's Chief Operating Officer, John Furey.
"We found an appropriate pricing level which could accommodate all of the respective needs: our need to have a financial model that could support the onward development of Spark and its pipeline, and payers felt that they were getting good value and physicians and patients felt that they were getting reasonable access," Furey told BioPharma Dive in an interview.
He further contended that payers have shown interest in Spark's larger pipeline strategy, which takes aim at diseases either with either a small affected population or high cost of treatment, like hemophilia. As a result, Spark can make the case that most patients in a coverage network won't need its therapies — but when they do, their use should lower overall healthcare costs.
It may be a while, however, before Spark can truly call those deals a success. According to a presentation Spark gave to investors last month, the first two patients were treated under the outcomes-based rebate model in the three-month period from July to September.
"We really don't have an update at this time," an Express Scripts spokesperson wrote in an email to BioPharma Dive in mid-October. "Still early for us to measure how it's working."
Still, many aspects of the pricing system look like they'll need reworking to handle a pipeline of gene therapies anticipated to arrive in the coming years.
For instance, what happens when a payer takes on the upfront costs associated with a gene therapy, which could offer decades of benefit, only to have the patient in question switch to another commercial insurer? That's a structural issue in the U.S. drug payment model yet to be resolved, according to Furey.
Many outside of insurance circles have criticized the high prices on gene therapies, too.
Peter Bach, director of Memorial Sloan Kettering's Center for Health Policy and Outcomes, told BioPharma Dive that pharmaceutical companies over the past roughly 15 years have increasingly latched onto one "innovative" feature of their new drugs, like gene therapies' one-time administration, and tried to push payers on why it warrants higher prices.
"On things like gene therapies, it's as if nothing else that goes on in healthcare that provides long-standing benefits even though it's delivered once ever existed," Bach said. "You take out someone's infected gallbladder, infected appendix ... that's a one-time service that often saves the person's life. Everyone gets paid only one time for that. I don't know why we suddenly need to try and charge a million dollars for something like that."
"The reality is these are monopolies — that's not a bad word, that's the policy approach we have chosen to take to incentivize pharmaceutical innovation," Bach said.
Spark won't just be contending with stateside markets, either. The biotech won approval for Luxturna in Europe earlier this month. There, previous gene therapy launches underscore the strain these treatments are putting on healthcare systems.
"I would go back to the fact that in Europe there were two launches that were less than commercially successful," Furey said, "and, you know, we were cognizant that we were third up, and we really need to demonstrate that this could be turned from a incredible clinical advancement into a commercially viable business."
Furey's referring to uniQure's Glybera and GlaxoSmithKline's Strimvelis, each approved in Europe, for which market success proved elusive. UniQure stopped selling its treatment in 2017, while GSK treated only a few patients with Strimvelis before offloading the drug in a licensing deal earlier this year. Price tags pushing $1 million per patient hampered both launches.
Luxturna hasn't run into as much pushback, in turn putting more pressure — and industry expectations — on it to succeed in the coming years. How it performs will likely shape the way other gene therapy developers commercialize other one-time products now nearing markets.
Follow Jacob Bell on Twitter