Spark CEO Marrazzo hints at million dollar price tag
With gene therapies moving from theory to clinic, and now, approaching commercial reality, the problems of pricing and access are more prescient than ever.
Spark Therapeutics Inc., currently awaiting an approval decision from the Food and Drug Administration for its gene therapy for a rare form of blindness, will be in the unique position to set the tone for gene therapy pricing in the U.S.
Finding the right price for the one-time treatment won’t be an easy move. Multiple gene therapies have already entered – and exited – the market in Europe amid a pushback from payers.
Spark CEO Jeff Marrazzo realizes the treatment could face the same fate should it price the blindness treatment too high, but he also made comments that suggest the company hasn’t ruled out a million dollar price-tag either.
"Ultimately, if you price it at a point that is too high, and you don't have access, that's actually not maximizing, certainly first and foremost for the patients, which, I think has to be where we begin," said Marrazzo at the Forbes Healthcare Summit on Nov. 30.
"But also if you don't have patients that get on therapy, get access to this one-time treatment, you're not maximizing anything when it comes to generating revenue and top-line for the business," he added.
For Spark and Marrazzo, determining the price of Luxturna requires considering a number of factors, including the economic consequence of blindness. But it’s a tricky equation because many factors are intangibles or not considered direct costs to the healthcare system. Payers might not see things the same way.
"Something like 70% of people in the United States who are blind are unemployed. You have caregivers who have to leave their wage job and go back and care for their children. Those are significant consequences that we need to be able to capture and speak about when we talk about these [therapies]," said Marrazzo at the conference.
"And of course in the context of these therapies, we need to talk about the fact that we're doing it with a one time treatment … The data is really supporting the fact that this has the potential to be very, very long lasting and we also need to find ways to compensate for that."
Gene therapy makers are breaking new ground. Unlike many other drugmakers that have other treatments to reference on price, gene therapy developers are starting with a fresh slate.
Marrazzo noted that Spark execs didn’t see the value in comparing Luxturna to other marketed products – even innovative therapies like the CAR-T drugs recently approved.
"And so, as we've said recently, what we did was to do some reasonable modeling economically, of not just the quality of life impact, or the healthcare cost impact, but just as important are the indirect costs. Which are the things like their productivity, their ability to be employed, as well as the employment and wage earning potential of the parents. Then we looked at those things and we modeled it, put some reasonable assumptions on it, we thought that you could easily value that at in excess of a million dollars," he said.
"On top of that, we said 'Let's also turn this on its head and think creatively', and it turns out, we actually already have two institutions in our society that value sight in some way," noted Marrazzo.
He first pointed to long-term disability policy insurance that often pays out in excess of one million dollars when policyholders lose their sight as a result of injury. He then pointed to state court cases for people who have lost their sight due to injury during war, noting many of those settlements exceed a million dollars as well.
While a million dollars may seem like a shocking figure, it wouldn’t be unprecedented.
UniQure set the price for its gene therapy Glybera at more than one million euros in Europe. While previously commercialized gene therapies like Glybera arguably didn’t offer the same level of efficacy as Spark’s Luxturna (voretigene neparvovec), their price was considered too high and the drugs were only ever used by a handful of patients. UniQure eventually withdrew Glybera from the market due to the lack of commercial prospects.
Where other execs stand
Even though other drug developers might balk at the million dollar figure, executives in other innovative spaces with one-time infusions have gone through a similar thought process to Marrazzo and Spark.
For instance, the two recently approved CAR-T therapies are priced at $373,000 and $475,000, respectively, and both are only approved as somewhat last-hope efforts for patients who are very sick and have undergone a number of other treatments.
Arie Belldegrun, founder of Kite Pharma, reminded the audience at the same conference that the collective cost of all of the prior treatments used by a single patient before the CAR-T drug is given cost more collectively (and clearly hadn’t given the patients the same life-saving benefit) than the CAR-T therapy alone.
Belldegrun was aiming to show the juxtaposition between the high cost of a one-time, potentially curative treatment and the cumulative high cost of continuing to treat patients with therapies that only extend their lives by weeks or months.
"You have to find a way between supporting innovation versus finding the way of paying for innovations," said Belldegrun, who didn’t offer near-term solutions, but was optimistic that continuing to develop innovative therapies would lead to answers.
"Cancer is the low-hanging fruit, and within the low-hanging fruit, you have the lowest hanging fruit, which is blood cancer. And therefore, in order to show the proof of concept, we started with lymphoma and leukemia, but it's very clear, like [bluebird bio] is doing already in multiple myeloma, and we're going to do it in so many others. So, we will find a way to solve the issue of cost," he added.
Other biotech CEOs agree: Bluebird bio Inc’s top bird Nick Leschly sees innovation as the answer to most of biotech’s problems surrounding both price and delivering on the business front.
"The best thing that I can do for our shareholders, and I'm sure you guys agree, is to focus on innovation, focus on doing transformative products, because you know what? There's a long-term benefit in that for everybody, including I think, share price over time. You start looking at short term, that doesn't work in our world, because nothing happens on a monthly basis. You've got to have a little bit more of a stronger tool, thinking along different type of lines instead. If we started thinking like that, these innovations would just dry up," said Leschly at the conference.
As optimistic as Belldegrun and others are, the issue of pricing isn’t going to be solved overnight – or even with the potential approval of Luxturna; the market likely has a long way to go before there is a solution all sides can live with.
Follow Lisa LaMotta on Twitter