Spark Therapeutics (NASDAQ:ONCE), a gene therapy company based in Philadelphia, USA, has indicated a price tag of $850,000 per patient for its new gene therapy treatment, “LUXTURNA” (voretigene neparvovec). The treatment, designed for patients with vision loss due to Leber’s congenital amurosis, is undergoing regulatory submission in the United States and Europe. According to the company, the MAA in Europe includes data from three clinical trials comprising 41 patients in total, representing the first randomized, controlled Phase 3 trial for a gene therapy for a genetic disease.
The patient population for the drug in the United States is estimated at between 1,000 and 2,000, yielding a potential market value for Luxturna of between $850 million and $1.7 billion. While clinical data suggests the drug may work for up to 4 years following a single administration, concerns have arisen on what happens if the drug either fails to work in certain patients, or works sub-optimally. To address such concerns, Spark has offered a rebate system to patients for which the drug does not work in the first 3 months, with a further possibility for a rebate 2.5 years after administration if the drug fails to perform. In a press release, Spark Therapeutics stated they “will share risk with certain health insurers by paying rebates if patient outcomes fail to meet a specified threshold, thereby linking the payment for LUXTURNA to both short-term efficacy (30-90 days) and longer-term durability (30 months) measures that are unique to this one-time gene therapy. The short-term and long-term measures will be based on full-field light sensitivity threshold (FST) testing scores, with a baseline to be established for each eligible patient before administration of LUXTURNA.”
Patients on government funded Medicare and Medicaid may be offered a slightly different route for payment, potentially involving some manner of an installment plan however, less detail is available on these structures as discussions are currently underway. While Spark has been highly innovative in both the development of the first ocular gene therapy in the US, and innovative in how the drug is to be priced and paid for, the sheer size of the price tag has attracted criticism. For example, a significant proportion of the cost required to research and develop Luxturna is understood to have originated with public, academic and charitable grant fundings and donations. The exact proportion of such financing does not appear to be publicly available, although presumably such figures may be computed from records within both the university(ies) involved and the company. Such costs may indicate that the public end up paying twice – once as a funder to develop the therapy and then again as a patient receiving the therapy. However, such reasoning may ignore the significant contribution made by investors and the company, and where the line between research and development is to be drawn. Universities on their own are not structured to deliver therapies to the market, while commercial companies are not structured or designed to undertake long-term basic research. Some compromises will be required in order to configure a fair and reasonable arrangement that balances public investment against private enterprise. If Spark’s track record in science is any indicator of the company’s skill in navigating significant challenges, then a solution should hopefully emerge over the coming months that provides a win-win for all stakeholders.