The $850,000 list price for a new medicine that treats a genetic form of childhood blindness is about four times too high for the value the drug provides, a nonprofit that studies the cost-effectiveness of new drugs said Friday, though it added that the price of the drug is cost-effective for select patients and with certain assumptions.
The report from the Institute for Clinical and Economic Review focused on the medicine Luxturna, the first-of-its-kind gene therapy approved for the U.S. market and the most expensive medicine by list price. It is the latest flashpoint in the debate over how to afford an innovative medicine — in this case, a therapy that corrects a genetic mutation in people’s cells — that carries, and in some views, deserves, a pricey list cost.
In its report, ICER said a cost-effective price for Luxturna would be $153,000 to $217,000 — a discount of 75 percent or more. ICER cited a lack of data that Luxturna causes permanent improvements in vision as a key reason that its developer, Spark Therapeutics, should not be charging so much.
“While the evidence is clear the therapy improves vision for patients over several years, the long-term duration of this benefit remains unknown,” Dr. David Rind, ICER’s chief medical officer, said in a statement. “Assuming a 10- to 20-year period of benefit, at list price the treatment does not meet standard cost-effectiveness thresholds, even after accounting for the broader societal benefits improved vision has on productivity and education costs.”
Spark did not immediately return a request for comment.
ICER reached its suggested list price for Luxturna by assuming that a 15-year-old person (the average age of the patients enrolled in the clinical trials) would experience improvements for a decade or two and taking into account the benefits to the health care system. It added that when it also took into account the benefits related to education, caregiver burdens, and productivity, the drug’s list price should still be cut in half.
ICER, however, did say that the drug’s list price met its standards for “cost-effectiveness thresholds” when it analyzed treating 3-year-old patients. In that case, it took into account both medical and societal benefits, and assumed the vision improvements would last for the patients’ whole lives.
Ahead of Spark’s pricing announcement earlier this month, some analysts forecasted the price could reach $1 million. Between the list price coming in under those expectations and the reimbursement arrangements the company struck, some experts credited Spark with crafting a thoughtful payment plan and picking a price that was in the range of other medicines that pushed the boundaries of what past therapies could do.
The Food and Drug Administration approved Luxturna in December to treat people with a rare and progressive retinal disease caused by a mutation in the RPE65 gene. People with the mutation can eventually go completely blind.
The pricing of gene therapies like Luxturna has been closely watched, and raised a fascinating question: How much are we willing to pay for a cure?
While Luxturna is a one-time therapy, it does not “cure” people born with mutated RPE65 genes; instead, it is meant to stop disease progression and restore some visual strength. But other gene therapies in pipelines could, by replacing faulty genes with functional ones, actually amount to cures. If they are able to reverse or prevent disease — and avoid all the future medical costs that accompany long-lasting conditions — how much is fair for the drug makers to recoup?
Spark has said it is negotiating deals with health plans to repay them should patients not be successfully treated. It is also discussing allowing insurers to pay for the therapy over several years instead of all at once.