Just weeks after Novartis floated the idea that $4-5 million was fair value for its new gene therapy against a deadly neuromuscular disease, a major benefits manager is pushing back. The Swiss drugmaker’s assessment of AVXS-101’s value for treating spinal muscular atrophy (SMA) has put the company front-and-center in the debate over what “super drugs”, for rare diseases afflicting relatively few patients, are really worth.
Among the first to react was pharmacy benefits manager Express Scripts, which helps U.S. employers manage workers’ prescription costs.
Its chief medical officer, Steve Miller, told Reuters he “loves the science” behind Novartis’s therapy, a potential cure for newborns who are diagnosed early.
But $4 million or more per patient? “You just can’t keep pushing these price points up,” Miller said. “I just don’t think we can allow it. It is not sustainable over time.”
Novartis, which bought U.S.-based AveXis for $8.7 billion in April to add the SMA therapy to its portfolio, is still mulling its asking price as it awaits U.S. Food and Drug Administration approval, likely in early 2019.
But the company has begun its campaign to convince insurance groups and governments to cover AVXS-101, contending the one-and-done infusion will save society money over the long haul, even with a cost near the highest ever for a one-time therapy.
There’s now only one approved drug for SMA, Biogen’s two-year-old Spinraza, and it is listed at $750,000 for the first year and $350,000 thereafter. Spinraza is not a cure and must be taken indefinitely.
“When we look at 10-year costs, you see somewhere between $2.5 million to $5 million being spent by societies to care for these types of patients,” Dave Lennon, AveXis’s president, said. “Four million dollars is a significant amount of money, but we believe this is a cost-effective point.”
A diagnosis of SMA, which affects one in 10,000 live births, is devastating. Forty percent of victims have the severest form and historically die within months. Children with less severe SMA can live to adulthood, although with profound physical disabilities. Though cognitively normal, many cannot feed themselves and require 24-hour care, wheelchairs and machines to help them breathe and cough.
As Novartis prepares to launch AVXS-101, it also hopes for tacit endorsement of its pricing strategy from the non-profit Institute for Clinical and Economic Review (ICER), which is currently reviewing the cost-effectiveness of SMA therapies.
The Boston-based non-profit, established in 2006, carries out cost-benefit analyses on drugs that it calls independent of “Big Pharma”, insurers and government.
Unlike European price regulators, ICER cannot dictate costs. But it has steadily gained influence in the U.S. pricing debate, as companies like Express Scripts and CVS Caremark and governments rely on its analyses.
ICER has conducted 11 assessments in 2018, some covering multiple drugs. In seven of the reviews, it concluded drugs’ prices aligned with their benefits, like when it said Roche’s $482,000 hemophilia medicine Hemlibra could save the U.S. system up to $1.9 million for the hardest-to-treat patients.
Four times, however, ICER concluded drugmakers were asking too much, giving payers ammunition to bargain them down. For instance, the New York Department of Health told Reuters that ICER’s finding that a $270,000-per-year cystic fibrosis drug from Vertex Pharmaceuticals represented “low long-term value” helped underpin the state’s demand for a steep discount.
Novartis and Biogen, as well as Switzerland’s Roche, which also has an SMA drug in development, are all lobbying ICER to broaden what it considers a meaningful benefit, potentially helping their therapies fare well in the group’s review.
Treatments for rare diseases like SMA are increasingly popular among drugmakers, because they command high prices while insurers are hard pressed to reject claims, especially for sick children. Sales of rare disease therapies will rise 11 percent annually, nearly twice the overall market rate, through 2024, when they’ll hit $262 billion, consultancy Evaluate Pharma has forecast.
Novartis Chief Executive Vas Narasimhan, with ambitions of treating hundreds of SMA patients annually, highlights 90 kids in AVXS-101 trials over four years, including some who would otherwise have been incapacitated and fed through tubes.