The first gene therapy for Duchenne muscular dystrophy will cost $3.2 million, its developer, biotechnology company Sarepta Therapeutics, said on Thursday.
The price makes the drug, named Elevidys and approved by the Food and Drug Administration earlier Thursday, one of the most expensive medicines in the U.S. on a single-use basis. It’s surpassed only by Hemgenix, a hemophilia B gene therapy cleared last year that costs $3.5 million per patient.
On a conference call following the FDA’s decision, Sarepta CEO Doug Ingram said the price reflected a “conservative” approach to valuing the benefit to patients and their families of Elevidys, which Sarepta claims would be cost-effective at prices between $5 million and $13 million.
"Our approach is to ensure that the cost to the healthcare system is less than the potential benefits of Elevidys,” Ingram said.
Sarepta is expecting statutory discounts, such as through Medicaid or a program known as 340B, and other deductions will result in a net price of about 20% lower than Elevidys’ gross cost.
Despite the multimillion-dollar price tag, Sarepta does not expect insurers will set up many barriers to treatment, given the small number of eligible patients.
“This is still a very, very rare disease,” Ingram said in a recent interview. “Most payers are going to realize that they need to get these kids on therapies.”
As with other gene therapies, Elevidys’ value is built on the idea its benefit will last for years and offset myriad other costs associated with standard care.
Yet it’s still unclear how much help the treatment will provide over time, and whether those effects will wane — a problem other gene therapy developers have attempted to solve by tying the cost of their therapies to patient outcomes. Bluebird bio, for example, has said it will reimburse up to 80% of the cost for its blood disease treatment Zynteglo if it doesn’t free patients from needing blood transfusions.
Ingram said that such pay-for-performance deals aren't "something that's likely or possible" for Elevidys, given the heterogeneous nature of the disease. "We have some innovative concepts that we're working on with payers that would be different than an outcomes-based approach," he told analysts on Thursday’s call. "But none of that will in any way delay or slow down a child's ability to get [treatment]."
So far, most of the gene therapies on the market haven’t become big sellers, as they’re generally for very rare conditions. Wall Street analysts have predicted Sarepta’s treatment could be different. RBC Capital Markets’ Brian Abrahams has forecast sales could reach more than $4 billion annually at their peak.
Yet the lofty projections are based on the assumption that Sarepta’s treatment will eventually be available to most people with the disease. Because of limitations in the data Sarepta brought to regulators, the FDA has only approved treatment for use in children 4 to 5 years of age who can still walk and don’t have genetic mutations that might counteract the treatment’s effects.
The current label restrictions will make “the initial launch more measured than we had planned for,” Ingram said on the call. Sarepta estimates there are about 400 children in the U.S. with Duchenne who are in that age range in any given year.
The approval is also “accelerated,” based on data showing Elevidys produces a form of the muscle-protecting protein people with Duchenne lack. Its continued presence on the market is conditioned on Sarepta proving, in an ongoing late-stage trial, that treatment provides a clear clinical benefit.
Success in that Phase 3 trial is also likely to be necessary for Sarepta to secure a broader approval in older children, too.
If the study meets its objectives, the FDA has indicated it "intends to entertain a non-age restricted expansion of this label," Ingram said Thursday. “We’ve also been assured this will be done with maximal speed by the FDA.”
In the meantime, analysts are expecting a slow ramp up in sales. In a research note Thursday, Abrahams projected only nine patients might be treated this year, as payer negotiations and stringent monitoring protocols might hamper initial uptake. SVB Securities analyst Joseph Schwartz is anticipating faster adoption, forecasting 59 patients and about $117 million in sales for the company’s 2023 fiscal year.
Their assessments mirror that of some experts interviewed by BioPharma Dive this year. After speaking with the heads of various neuromuscular clinics, Tim Lotze, director of a muscular dystrophy care center at Texas Children’s Hospital, said many large centers will only treat one to two patients for month. Lotze noted how patients need to be closely watched not only when they receive treatment, but for follow-up stretching years afterwards.
“Beyond everything else, we have to make sure that we keep everybody safe,” Lotze said.
Ned Pagliarulo contributed reporting.