Biogen, Novartis need to think smaller—much smaller—on SMA drug prices: ICER

Cost watchdog ICER has released an Evidence Report for Biogen and Novartis spinal muscular atrophy drugs. (Pixabay)

Biogen needs to get serious about discounts for its spinal muscular atrophy drug Spinraza, the cost-effectiveness watchdogs at ICER say in a new report. And if Novartis was thinking about putting a $1 million-plus price tag on its forthcoming SMA gene therapy? It should think more along the lines of $900,000 instead.

The Institute for Clinical and Economic Research's pricing analysis, released Friday, says Biogen should cut Spinraza's price by 83% as more doctors prescribe it for patients early on, before symptoms show up. That means instead of $750,000 the first year and $375,000 thereafter, Spinraza would run $72,000 to $130,000 for the first year and $36,000 to $65,000 after that.

As for a sub-$1 million price on Zolgensma, that's not even close to the figures Novartis—and AveXis, its original developer—had been floating. AveXis president Dave Lennon has said the drug could be cost effective at $4 million to $5 million.

ICER's analysis of Spinraza leans in part on the drug's expansion prospects. Thanks to positive clinical data and better screening for SMA, ICER predicts Biogen’s drug will be used more often in presymptomatic patients. That's the basis for the company's own growth forecasts, too. And at least one analyst doesn't see the group's assessment hurting Spinraza's prospects.

Leerink analyst Mani Foroohar said that cost-effectiveness analyses are “inherently limited in severe, rare diseases, and are unlikely to really influence established payer coverage in the U.S.” And as such, ICER's recommendations are “unlikely to change Spinraza’s price, nor alter its market outlook."

His team already predicts Spinraza sales will peak next year and start to decline as Novartis’ gene therapy Zolgensma take up share. The Novartis drug faces a May FDA decision.

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And despite the yawning gap between the $4 million to $5 million Lennon quoted and ICER's findings, Foroohar thinks the watchdog's findings could actually help Zolgensma. ICER suggests pricing of up to $900,000 for the gene therapy, but up to $1.5 million under alternative calculation methods. That, in turn, will “set a floor” for Novartis’ pricing at $1.5 million, the analyst figures, and the “favorable analyses of Zolgensma’s value relative to Spinraza will support rapid uptake of Zolgensma in infantile-onset SMA.” His team believes Novartis will price its drug at $2 million.

A Biogen spokeswoman said ICER’s analysis fails to account for a “significant difference in robustness and quality of evidence for Spinraza as compared to Zolgensma.” She noted that Spinraza is the standard of care in SMA and “has benefitted the lives of more than 6,600 people.” Zolgensma is an experimental drug that’s only reported results in 15 patients, she said.

For its part, Novartis is pleased ICER “acknowledges cost-effectiveness thresholds up to $500,000 per quality-adjusted life-year (QALY) gained, which both the rare disease community and various governmental bodies have suggested is the appropriate standard to protect vulnerable populations and allow access to innovative, transformational therapies for a small number of patients," a spokesman said. At that threshold, ICER found Zolgensma to be cost-effective at a price of $5 million, the company said.

“AveXis knows that the introduction of one-time, transformative therapies will require rethinking how our healthcare system manages diagnosis, treatment, care and associated costs for patients with genetic disease,” the company said. “We look forward to discussing ways to better recognize, quantify and value the potential lifetime benefits of groundbreaking gene therapies at the upcoming public meeting.”

ICER previously released a report on the therapies and updated its findings after feedback from patients, doctors, pharma companies and others. Next up is a March 7 meeting to discuss the findings. The group previously concluded Zolgensma could be cost-effective at a price of $1.6 million to $5.4 million, Novartis CEO Vas Narasimhan said at the J.P. Morgan Healthcare Conference in January.

Spinraza launched in early 2017, and market watchers worried at the time that the high price would put yet another spotlight on pharma’s pricing at a tough time for the industry. But the drug hasn’t trigger any pricing controversy and has instead taken off commercially. Last year, sales were $1.72 billion.

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Meanwhile, Novartis has a big pricing decision to make with Zolgensma, picked up in last year’s $8.7 billion AveXis buyout. Late last year, AveXis head Dave Lennon said on a conference call the drug could be cost-effective at $4 million to $5 million, but CEO Vas Narasimhan said it was too early to comment. Novartis has explored how new pricing models can support rollouts for one-time, costly therapies.