How willing have payers been to cover high cost therapies such as Zolgensma and Zynteglo?
On the surface, this year has seen the launch of the two most expensive therapies ever. Zolgensma launched in May 2019 in the US for $2.1 million and is a gene therapy to treat spinal muscular atrophy (SMA), whilst Zynteglo (another gene therapy) for beta thalassemia which was launched in the EU in June 2019 at $1.8 million. Both these prices are significantly above the previous high price benchmark of $850,000 for Luxturna (another gene therapy). What are payers’ thoughts on these new treatments and how successful have they been at gaining reimbursement?
There are a couple of considerations for each of these therapies. Firstly, these diseases are chronic, secondly, these treatments are effectively one-off administration processes. The treatment does not need to be re-administered each year, so there is no annual cost and the benefits should extend across the patient’s lifetime. Additionally, the prices mentioned are the list prices, with the final confidential net prices likely to be significantly lower. Finally, the companies have been working with payers to put in managed entry agreements to spread the cost over several years or agree to pay for performance contracts. When put into context, this makes the costs for these therapies seem much more realistic.
For Zolgensma (onasemnogene abeparvovec-xioi), Novartis has developed outcomes-based instalment payments contracts that spread the cost over 5 years, which equates to ~$425,000 per year. This is roughly half the cost of using Biogen’s Spinraza for 10 years, its direct competitor. Additionally, ICER, the US cost-effectiveness body, initially stated that Zolgensma was not cost–effective beyond a price of $1.5 million, but with the instalment payments and additional information, ICER recommended Zolgensma was cost–effective even at its list price of $2.1 million.
US payers have yet to be fully convinced though and seem to be pushing back against the price level, with only 40% of commercial lives covered by July. Payers are restricting access beyond the labelled population, with some not covering it in combination with Spinraza or for presymptomatic SMA patients. However, rationally it would seem a better option to treat presymptomatic patients, to prevent them progressing further and requiring subsequent drug therapy.
Zynteglo (autologous CD34+ cells encoding βA-T87Q-globin gene) is facing similar challenges, but this time in the EU. Like Novartis, Bluebird Bio has also proposed a five-year instalment plan. Initially €315,000 (~$356,000) euros would be paid upfront with additional payments due only if the treatment proves effective. The manufacturer has argued that Zynteglo provides lifelong benefit whilst avoiding costly blood transfusions for the rest of patients’ lives.
But what if patients don’t respond to Zynteglo? Bluebird Bio has stated that if the patient fails in the first year, none of the 4 subsequent payments will be made. But if the patient fails after 5 years on the treatment, the full price of Zynteglo has been made and the patient would still require expensive regular blood transfusions. With a steady launch of Germany, Italy, France, then the UK in June 2020, it will take time for payer’s reactions to Zynteglo to be known. Bluebird Bio will also be looking to avoid the pitfalls associated with Glybera (alipogene tiparvovec), the world’s first gene therapy which was subsequently withdrawn from the market.
When put into the context of lifetime treatment costs, which can range up to $18 million per patient for Cinryze (Shire’s angioedema drug, which costs $551,700 per year with potential for use over many years), Zolgensma and Zynteglo seem to be much more modest at $2.1 and $1.8 million each. However, the key question that remains to be seen is how effective these therapies are in the real-world setting. If they demonstrate the clinical benefits shown, there would be a strong case for justifying the price and even questioning if there was additional value that was not captured. If effectiveness is not demonstrated, these treatments could go in the same direction as Glybera. What seems certain is that Zolgensma and Zynteglo have established new price benchmarks for therapies and we can expect to see other gene and CAR-T therapies following their lead.