The world’s first gene therapy may be teaching pharma an important lesson: There’s a ceiling on drug prices, even for outright cures, unless and until pharma and payers come up with new payment models.
Glybera, the treatment for an ultra-rare disease called lipoprotein lipase deficiency approved back in 2012 in Europe, carries a price tag of $1 million. Developed by UniQure ($QURE), the drug isn’t likely to appear in the U.S. anytime soon, because the company abandoned its plans to win an FDA approval after the agency asked for new trials.
As MIT Technology Review reports, there’s good reason for UniQure to be wary of spending the millions required to test Glybera in a new round of patients. Only one doctor has braved the intensive process to win insurance reimbursement for the drug, despite its curative powers--and despite the fact that it obviates some serious spending on hospitalizations.
That German physician, Elisabeth Steinhagen-Thiessen, had to submit a thick dossier of documents and then call the CEO of one of Germany’s insurers to win approval to use Glybera on one of her seriously ill patients. It worked. The patient had been hospitalized 40 times before, and since her treatment, hasn’t been to the ER once, the doctor told MIT Tech Review.
Still, the drug hasn’t been used since. The Italian company that took over marketing in Europe, Chiesi Farmaceutici, says it’s been “challenging” to sell the med. Glybera “has not been a success,” UniQure CEO Dan Soland told the pub. “It still drains a lot from the company.”
Several other gene therapies are in the pipeline, and GlaxoSmithKline ($GSK) won a European recommendation last month for Strimvelis, its immune deficiency med for “bubble boy” syndrome.
GSK has said it won’t price its med anywhere close to $1 million. "We're trying to create a balance between nurturing innovation and creating value for the healthcare system,” spokeswoman Fiona McMillan told FiercePharma last month. “I know there are concerns about Europe's first gene therapy approval [Glybera] costing around $1 million, but I can say that Strimvelis will be significantly less than that.”
GSK is working on some payment models that could help, McMillan said. But however Strimvelis is priced and paid for, it’s not a commercial slam-dunk, the company’s gene-therapy development chief, Sven Kili, told the Review. “From a pure business, money-making perspective, it’s a challenge,” he said.
It’s not cheap to develop any new drug. With the potential payoff from gene therapies looking tough under current conditions, those conditions will have to change to make the treatments more viable.
For one thing, prices may have to be more conservative, as GSK apparently realizes. Dr. Steinhagen-Thiessen told MIT Technology Review that Glybera’s cost is a definite problem. “I think the price is absolutely too high. I am not sure that other insurance companies are willing to pay that,” she said.
For another, to be willing to pay, insurance companies will need a new payment model, as GSK and others have been saying since Glybera hit the market. Annuities are one approach. Performance-based deals are another, with periodic payments as long as the treatment keeps working.
And there’s time, the great healer. One expert told MIT Tech Review that the field still isn’t quite ready for prime time, if prime time means making a profit. Gene therapy developers should focus on well-known disease targets “where there is a big chance for medical success, whether or not there is commercial success,” David Schaffer, a gene-therapy expert and UC Berkeley professor, told the pub.
Those successes would help build a foundation for other therapies that could deliver returns for their companies--and they’d give payers and pharmas a chance to experiment with new payment models that work for both sides.
GSK is in it for the long haul, McMillan told us. ”Whatever we decide, it needs to be fit for the future because from an ROI perspective--well actually, we won't achieve a return for Strimvelis alone, 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."
- read the MIT Technology Review story
German cost watchdogs look askance at uniQure's $1.4M gene therapy
GSK weighs 'staggered payments' for gene therapy Strimvelis
GlaxoSmithKline files for gene therapy OK as a case of the jitters sets in