JPM24: Bluebird CEO points to 'very innovative contract' to defend Lyfgenia's pricing premium over CRISPR rival

San Francisco—Bluebird bio’s 40% list-price premium for Lyfgenia compared with Vertex and CRISPR Therapeutics’ sickle cell disease drug surprised many industry watchers last month. But bluebird CEO Andrew Obenshain argues the prices for the gene therapy rivals shouldn’t be compared directly.

“You can’t just compare the $3.1 million [to] the $2.2 million; you have to do [the comparison] with the fact that you only pay if it works,” Obenshain said during a session at Fierce JPM Week alongside the annual J.P. Morgan Healthcare Conference.

Obenshain was referring to the outcomes-based contracts that his company is offering to payers for Lyfgenia. Under the deals, patients are followed for three years after treatment with the gene therapy, and payers won’t pay the full price if a patient is hospitalized because of vasco-occlusive events associated with sickle cell disease.

Citing competitive considerations, the bluebird CEO couldn’t give further details about the deal terms, only saying the company offered a “very innovative contract” that has been well received by payers.

In the month since Lyfgenia’s approval, bluebird has signed two major reimbursement deals with separate insurers that together cover about 200 million people in the U.S. The company is further in “advanced discussions” with 15 different Medicaid agencies, Obenshain said. The contracts for Medicaid will vary slightly from commercial payers, and bluebird will be flexible when working with government organizations, he added.

In addition to the payer deals, bluebird has also offered different contracting mechanisms to treatment centers. Without going into detail, Obenshain said hospitals can either pay for Lyfgenia upfront and assume the risk of reimbursement, or bluebird can help them mitigate the payment risk. Bluebird now has 35 qualified treatment centers for Lyfgenia, and the company expects to expand to 48 soon.

“When we got approval, I had to sit there and say, well, this is what we believe,” Obenshain said of Lyfgenia’s price. “One month after approval, ... I don’t I think need to. I can point to 10 more centers and 200 million lives. That’s how the conversations go.”

By comparison, Vertex hasn’t shared specifics about its reimbursement strategy for CRISPR Therapeutics-partnered Casgevy. Still, the company has signed an agreement with Blue Cross Blue Shield’s Synergie Medication Collective covering 100 million people, CEO Reshma Kewalramani said during a presentation at the JPM conference.

Previously, reimbursement hurdles tripped up bluebird in Europe. The gene therapy biotech had to withdraw from Europe and revert to being a clinical-stage biotech in 2021 because of disappointing pricing discussions in the region.

“If we were to do it again, we definitely would have partnered,” Obenshain said. But at the time, “it wasn’t a decision to leave Europe, it was a necessity,” the chief executive said, pointing to the cost of setting up infrastructure in Europe and delayed reimbursement for gene therapies there.

“So bluebird was carrying an European infrastructure that was very expensive, in a rare disease market where the pricing we received in Germany was quite a bit lower than the value and put real pressure on our margins,” he said. “And it would’ve taken us years […] to be able to recoup any sort of investment that we made in Europe.”

For its part, Vertex is about to go down the European path, too. The European Medicines Agency in December adopted a positive opinion for Casgevy in sickle cell disease and transfusion-dependent beta thalassemia, teeing up an official approval likely set for early this year.

“I’m very much rooting for Vertex and CRISPR in Europe to pave the way,” Obenshain said. “I’m glad there’s an option for patients there.”

As to whether bluebird will revisit the European market, Obenshain said: “We are always interested in a partner. Right now, I really can’t say anything. We are really focused on the U.S. right now. The better we execute in the U.S., the more likely our Europe options.”