SAN FRANCISCO – If 2017 marked a year of big wins for scientific innovation with the FDA approvals of the first three gene therapies – Novartis AG's Kymriah (tisagenlecleucel) CAR T immunotherapy for B-cell acute lymphoblastic leukemia, Kite Pharma Inc.-developed CAR T Yescarta (axicabtagene ciloleucel) for certain types of non-Hodgkin lymphoma and more "traditional" gene therapy Luxturna (voretigene neparvovec-rzyl) from Spark Therapeutics Inc. to treat RPE65 mutation-associated retinal dystrophy – then 2018 might be the year when the innovative capabilities on the payer side are put to the test.
"It's an unbelievable time to be alive in this industry," said Ron Cohen, president and CEO of Acorda Therapeutics Inc., during a discussion at the Biotech Showcase meeting on whether the industry is at a tipping point. For his part, Cohen disagreed with the term "tipping point," preferring to view the sector's activity as "an arc of progress that accelerates."
But, he noted, "paradoxically, the fact that we have many better and better medicines" emerging onto the market is exacerbating the increasingly politically charged issues of drug pricing and patient access in the U.S. The industry does not have the luxury to sit at lab benches focusing solely on scientific breakthroughs "without spending just as much of our intellectual capital" addressing patient access and out-of-pocket costs, Cohen said.
With the approval of the first potentially one-off, curative gene therapies, solutions need to be found sooner rather than later.
In its August approval for Kymriah, Basel, Switzerland-based Novartis priced the one-time treatment at $475,000, though the company said it would work with payers on an outcomes-based pricing model, reimbursing for treatment only when patients respond to therapy. Gilead Sciences Inc., which picked up rights to Yescarta through last year's acquisition of Kite, set a slightly lower price tag of $373,000 but without outcomes-based pricing. (See BioWorld, Aug. 31, 2017.)
Disclosing the price last week for Luxturna, the first gene therapy cleared for a rare disease, Philadelphia-based Spark came in under the $1 million-per treatment projection – the treatment was priced at $850,000, or $425,000 per eye. "We believe this reflects not only the life-altering and durable clinical value that we spoke about in the preceding months before the approval of Luxturna, but we think it also appropriately balances the access concerns of patients and the budgetary concerns of payers and, ultimately, Spark's need to create a path to a sustainable business model," Spark's co-founder and CEO Jeffrey Marrazzo said Monday afternoon during a presentation at the J.P. Morgan Healthcare Conference.
While it might not have offset the sticker shock streaking across mainstream news headlines, the company did outline a number of efforts it planned for enabling access to patients who qualified for treatment with the adeno-associated virus vector-based gene therapy. The first of those is an outcomes-based rebate arrangement – already reached with Harvard Pilgrim and in discussions with other commercial insurers – that would provide rebates for patients whose outcomes fail to meet efficacy outcomes based on measurements at 30 to 90 days and again at 30 months. Rebates would "go up to but not exceed the standard Medicaid rebate," Marrazzo said.
Spark also is lining up a contracting model that allows the firm to sell directly to the payers – or their specialty pharmacy – to eliminate the markup that is typically added. That model should have the added benefit of speeding up the coverage process and getting the treatment to patients faster, Marrazzo said.
Perhaps most importantly, the company has launched efforts to help establish a pathway that would allow patients to make payments in installments over time. "We believe this is an important principle to work toward, not just with Luxturna but with the pipeline we have growing, not only at Spark but also in general with gene therapy," Marrazzo said.
Such an installment option is currently not possible under the government's price reporting requirements, so the company has submitted a proposal to the Centers for Medicare & Medicaid Services for a demonstration project designed to allow commercial and government payers such an option.
The company also has expended considerable effort highlighting the effects of Luxturna treatment on the lives of patients, data that proved persuasive to the FDA's Cellular, Tissue and Gene Therapies Advisory Committee, which voted unanimously in favor of Luxturna in October, as well as the FDA, which gave its blessing to the treatment earlier than expected and allowed a broad label. (See BioWorld, Oct. 13, 2017, and Dec. 20, 2017.)
Spark's groundwork did not go unnoticed by Acorda's Cohen, who said during Monday's plenary at Biotech Showcase that the firm "did an amazing job," in disclosing price and value for Luxturna. "We should be studying that playbook."
Meanwhile, greater challenges lie ahead, as more one-time gene therapies head toward the market, particularly those aimed at larger patient populations.
'Fancy footwork and creativity'
According to Janet Lambert, CEO of the Alliance for Regenerative Medicine (ARM), of the 82 phase III studies ongoing in cell and gene therapy, 30 involve gene therapy candidates – another nine involve modified gene therapy treatments.
But trying to find a one-size-fits-all approach for pricing gene therapy is unlikely to work, and companies working on programs need to start as early as possible figuring out how to calculate the value of their specific treatments to the overall health care sector.
"We have to be careful not to paint them all with the same brush," said Amber Salzman, president and CEO of Adverum Biotechnologies, during a Monday session at Biotech Showcase hosted by ARM.
Menlo Park, Calif.-based Adverum, for example, is advancing as one of its lead programs ADVM-022, a preclinical-stage AAV 7m8-aflibercept candidate designed for administration as a single intravitreal injection to minimize the injection burden with current treatments for wet age-related macular degeneration (AMD).
Given the prevalence of wet AMD, "there's no way we can charge per eye what Luxturna costs," Salzman said. "So you have to look at what is the standard of care right now for that disease." For AMD patients, what is the value of avoiding the weekly or monthly intravitreal injections currently required as standard of care? And what is the value of not treating vs. treating?
"We have to look at it in a more complete, holistic way," she said.
Gene therapy developers will be pressed to demonstrate value of the treatment.
Sangamo Therapeutics Inc., for instance, is developing gene therapy treatments targeting hemophilia – SB-525, an AAV carrying a clotting factor VIII gene construct partnered with Pfizer Inc. in phase I/II development for hemophilia A, and SB-FIX, a treatment designed to provide continuous production of factor IX clotting protein for the lifetime of patients with hemophilia B, also in phase I/II.
Current therapies for hemophilia can add up into millions of dollars per patient, noted Sangamo President and CEO Sandy Macrae. When calculating costs of one-time gene therapies, the value to society in terms of costs that will no longer be required has to be taken into consideration.
Richmond, Calif.-based Sangamo isn't alone in the hemophilia space. Spark presented promising data at the American Society of Hematology meeting in Atlanta last month from a phase I/II trial of SPK-8011 in hemophilia A. It also has a hemophilia B program partnered with Pfizer.
But it likely would be Biomarin Pharmaceutical Inc. that will be one of the first to potentially commercialize a gene therapy for hemophilia, pending positive data from its phase III program testing valoctocogene roxaparvovec (formerly BMN-270) in hemophilia A patients. (See BioWorld, Dec. 12, 2017.)
"We tend to take the view there will probably be multiple models around the world, in order to reach agreement" between the innovators and the payers, said Geoff Nichol, senior vice president of global clinical development and chief medical officer at Novato, Calif.-based Biomarin.
Not all gene therapies will be the same in terms of treatment effect and not all payers are the same, he added. "There will be a need for some fancy footwork and creativity as we move forward."