Bluebird proposes installment plan for LentiGlobin gene therapy
- Bluebird bio told investors it wants to allow insurers to pay for its LentiGlobin treatment for transfusion-dependent beta-thalassemia over a period of as many as five years.
- After an initial upfront charge, Bluebird would only get paid if the one-time infusion continues to benefit patients. And the company said it will commit to not raising prices in the future any more than inflation, as tracked by increases in the Consumer Price Index.
- The actual price for LentiGlobin is still being determined, but it will be less than what the company calculates as $2.1 million in "intrinsic value" of the therapy, according to slides the company presented at the annual J.P. Morgan Healthcare Conference on Jan. 8.
Bluebird is attempting to tackle one of the biggest challenges facing companies with innovative — and pricey — gene therapies. The treatments offer the promise of cures and big savings in healthcare costs throughout a patient's life, yet they are poised to encounter an insurance system not accustomed to pay millions of dollars for a single infusion.
In its presentation at JPM, Bluebird executives said they are willing to put as much as 80% of the cost of the LentiGlobin at risk to prove the value of its treatments. The company also stated it wants to lead the way in changing how the market handles pricing and reimbursement for gene therapies in general.
LentiGlobin is designed to address the underlying cause of transfusion-dependent beta-thalassemia, which affects about 300,000 people in the world and 1,000 in the U.S., according to the Wall Street Journal. Because of a genetic mutation, patients with the condition can’t effectively produce red blood cells and often require transfusions every two to five weeks to fight anemia.
The company is betting that patients and insurers will see the value of LentiGlobin in reducing the need for blood transfusions and fending off complications, some caused by the transfusions themselves.
“We only get paid if we do what we said we’d do,” the biotech's CEO Nick Leschly said in an interview with the Wall Street Journal, which first reported the proposed pricing plan.
The strategy has a lot of upside, analysts at Leerink wrote in a Tuesday note to clients. The installment proposal “could potentially expand access to the gene therapy while preserving pricing power,” they stated. Leerink estimates LentiGlobin’s price at about $1.2 million in the U.S. and $900,000 in the EU.
The downside is that the long-term effectiveness of LentiGlobin is unknown, so the question of how much money would come in during the installment phase is an open one, the Leerink analysts said.
Bluebird was also upfront about the strategy's challenges, including how to define and track patient outcomes, how to handle installments when a patient switches insurers and how to handle the requirement that Medicaid gets the best price for any therapy. While it offered some potential solutions, much would depend on agreements it can reach with insurers and government entities.
The company is aiming for regulatory approval in Europe of LentiGlobin this year and U.S. approval in 2020.