GlaxoSmithKline ($GSK) has struck a Strimvelis deal in Europe. The gene therapy for “bubble boy” disease, only the second of its kind, raised questions about pricing and payment in the up-and-coming field--and GSK’s arrangement offers some potential answers.
According to MIT Technology Review, GSK will offer the one-time treatment with a money-back guarantee. Priced at 594,000 euros ($665,000), it’s among the most expensive therapies in the world. But it’s also a cure for severe immunodeficiency stemming from a lack of adenosine deaminase (ADA-SCID), rather than an ongoing treatment as other rare disease drugs are.
“The drug has to deliver what you say or we don’t pay,” Luca Pani, director general of the Italian Medicines Agency, told the publication. “If it does not work, they will return the money.”
Strimvelis won approval in Europe earlier this year, and at the time, GSK said it would price the drug “significantly less” than the $1 million-plus tag assigned to the world’s first gene therapy, Glybera.
GSK did not respond to FiercePharma’s request for comment before press time, but when Strimvelis was approved, spokeswoman Fiona McMillan told us that the company was considering “different models” on pricing. Those models could include staggered payments--which are part of the Italian deal now--and outcomes-based arrangements, she said.
“[I]f a patient needs to go back onto a different therapy down the line, or if their health declines, we will look at refunding some of the cost,” McMillan said.
The drug will be distributed only in Milan, Italy, which means families have to travel for treatment, and the Italian health authorities’ arrangement with GSK covers all European patients, MIT Tech Review says. Strimvelis was developed in partnership with Italy’s San Raffaele Telethon Institute for Gene Therapy.
Money-back guarantees aren't unprecedented in Italy. In fact, the country has been striking risk-sharing deals on cancer meds. It sees the money-back approach as a way to stay on the leading edge of treatment without breaking the bank on drugs that don't work as promised. The country's medicines regulator had full-refund deals on more than 90 drugs by the end of 2014, up from fewer than 20 in 2012, Bloomberg research shows. Last year, it collected about €200 million ($220 million) under those money-back deals.
Pani told MIT Tech Review that GSK first proposed a price in the $1 million ballpark, as a starting point for negotiations. The fact that Italy and GSK came to a price so far under $1 million apparently came as a shock to some pharma-watchers.
“I was expecting a higher price,” Christian Hill, managing director of the consulting firm Map Biopharma, told MIT Tech Review. “My initial gut feeling was ‘Hmmm, that’s really surprising.’”
McMillan said in April that GSK doesn’t expect a return on Strimvelis, what with only 8 patients per year expected to seek treatment in Europe. “But clearly we’re not looking at Strimvelis in isolation,” she said. “There will be an entire new platform coming from this drug and a set of other possible ultra-rare indications coming through, giving us greater commercial opportunities in the future.”
- see the MIT Tech Review story
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