Spark sets off gene therapy debate with $850K sticker on Luxturna

Spark Therapeutics' Luxturna will cost $850,000, the company announced Wednesday.

There's a new medicine atop of pharma's global pricing charts, and it's Spark Therapeutics' Luxturna. After winning FDA approval in December, the company said Wednesday its gene therapy will cost $850,000, or $425,000 per eye before discounts. 

To soften the blow, Spark is introducing outcomes-based deals with Harvard Pilgrim and Express Scripts affiliates—and it's in talks for more. Under those arrangements, the company won't collect full payment if its superpricey drug doesn't work. The company is also working on a proposal with the Centers for Medicare and Medicaid Services that would allow payments over multiple years.

Luxturna treats a rare inherited disease that can lead to blindness and works by delivering a gene called RPE65 into a patient's retinal cells, which then produce a protein to restore vision loss.

While $850,000 is a staggering figure on its face, the price actually came in lower than a $1 million estimate by Wall Street analysts. Before the launch, Spark CEO Jeffrey D. Marrazzo said the one-time treatment offers "a value in excess" of $1 million.

In a statement Wednesday, Marrazzo said his company believes "access to therapy is a shared responsibility among Spark Therapeutics, payers, health benefit providers, physicians and treatment centers." 

To that end, the company has "been working with stakeholders across the health care sector to help ensure that appropriate patients have access to a product that challenges all of the current conventions of how patients are treated, how products are delivered and how payments are handled," the helmsman said.

But even though Evercore ISI analyst Steve Breazzano said the price came in "generally within expectations," the company quickly ran into criticism from patient advocates.

"Spark Therapeutics is charging as much for Luxturna as they think they can get away with," Patients for Affordable Drugs president David Mitchell said in a statement shortly after the announcement. "Our system cannot handle unjustified prices like this, and the new payment models announced today are merely a way to disguise a price that is simply too high."

Breazzano said Spark is "clearly focused on moving away from this one-time upfront payment to an annuity-like model with payments over multiple years." But for now, those efforts are in early stages, according to the analyst.

How does Luxturna's price compare to some of pharma's other superpricey drugs? The first year of Biogen's Spinraza costs $750,000—the med is $375,000 for subsequent years—while BioMarin's Brineura, approved last year, costs $702,000 before discounts. Both are recurring treatments versus the one-time nature of Luxturna. UniQure's Glybera, now discontinued, cost $1.2 million in Europe, but its commercial use was limited and the drugmaker opted to stop pouring resources into marketing the drug. 

Spark's gene therapy approval followed FDA clearance of CAR-T cell therapies from Novartis in August and Gilead in October. Novartis also has an outcomes-based contract on its Kymriah, which costs $475,000 to treat a rare form of acute lymphoblastic leukemia. Both drugmakers plan to expand the technology into other uses.