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Drug pricing legislation may not affect a new $2.1 million gene therapy drug

The blockbuster drug Zolgensma, which treats spinal muscular atrophy, is now the most expensive drug in the world

The outside of the Food and Drug Administration headquarters is seen in White Oak, Md. The agency approved a $2.1 million Novartis therapy for spinal muscular atrophy Friday, making it the world’s most expensive drug. (Al Drago/CQ Roll Call file photo)
The outside of the Food and Drug Administration headquarters is seen in White Oak, Md. The agency approved a $2.1 million Novartis therapy for spinal muscular atrophy Friday, making it the world’s most expensive drug. (Al Drago/CQ Roll Call file photo)

The recent approval of a treatment poised to become the world’s most expensive drug comes as Congress debates measures meant to address high prices — yet so far what lawmakers are attempting might not impact cases like this $2.1 million therapy.

The FDA announced Friday it was approving Novartis AG’s gene therapy Zolgensma, a one-time treatment designed to help young children with spinal muscular atrophy. The agency’s announcement said the safety and effectiveness of the drug was based on clinical trials that yielded positive results for patients with the rare disease.

Around 10,000 to 25,000 U.S. children and adults are estimated to have the disease, which occurs in one of every 6,000 to 10,000 births. Patients rarely live into adulthood.

As Congress considers measures to lower drug prices, its efforts so far could have a minimal impact on products meant to treat rare diseases in children. A bill passed by the House earlier in May is intended to deter industry behavior that can slow the entry of lower-cost generic drugs.

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But products like Zolgensma, which introduce modified genes that are uniquely tailored for each patient, is extremely costly to produce — making it unclear if generic competition would flourish in the same way it has for less complicated treatments.

Lawmakers are also considering a bill meant to require transparency behind how drugmakers set their prices. One version the Energy and Commerce Committee is considering would exclude rare disease treatments from those requirements.

Many of the proposals lawmakers are considering revolve around lowering costs for some beneficiaries in Medicare’s prescription drug benefit, Part D — which is not a population that uses a treatment meant for children 2 years old and younger.

And while the drug has a high sticker price, there are early indications that insurers will be happy to cover it. The health plan Harvard Pilgrim Health Care said that it only sees a small number of newly-diagnosed patients each year and that the benefits are worth the costs.

Children with the rare genetic defect can’t produce enough of a protein allowing specialized motor neuron cells to function properly, and they die from respiratory failure caused by fatal muscle weakness.

The debilitating neuromuscular disease can lead to death if left untreated and can require round-the-clock care for babies with the most severe form, which can prevent them from lifting their heads, breathing or swallowing.

This treatment gives patients a chance to minimize the disease’s progression and improve survival, the FDA release said.

“Compared to the natural history of patients with infantile-onset SMA, patients treated with Zolgensma also demonstrated significant improvement in their ability to reach developmental motor milestones,” the FDA release said.

To soften the financial blow, Novartis announced it would offer a five-year payment plan that would reduce the annual cost of the drug to $425,000. The company also said it is working on payment agreements with insurance companies that would base the price on the drug’s effectiveness.

CEO Vas Narasimhan recently signaled that the therapy could be worth more than $5 million, considering the years of intensive care the drug can replace. An analysis by the Institute for Clinical and Economic Review, which was recently revised to include additional clinical trial data, determined the price falls within what it would consider cost-effective.

“Insurers were going to cover Zolgensma no matter the price, and Novartis has spoken publicly about considering prices that approached $5 million,” ICER President Steven Pearson said in a statement. “It is a positive outcome for patients and the entire health system that Novartis instead chose to price Zolgensma at a level that more fairly aligns with the benefits for these children and their families.”

But David Mitchell, a cancer patient and founder of Patients for Affordable Drugs, lampooned the announcement, pointing to the company’s $8.7 billion acquisition of AveXis, which developed the drug.

“The acquisition price was based not on cost to develop the drug but based on expectations of high returns,” he said. “So the price has been set to deliver those returns with no regard to the actual cost to develop it.”

The disease’s current treatment, Biogen’s Spinraza, costs $750,000 for the first year and $375,000 per year thereafter.

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