May 29, 2019

The Food and Drug Administration (FDA) approved Zolgensma (onasemnogene abeparvovec-xioi), which is indicated for treatment of pediatric patients less than two years of age with spinal muscular atrophy, type 1 (SMA1).^1,2 Immediately after approval, its manufacturer announced it would be priced at $2.125 million per treatment, making it what is believed to be the most expensive pharmaceutical in the history of the world. The eye-popping price was quickly noted by CNBC, NPR, the NYT, Reuters and others.

While ground-breaking in innovation and potentially curative technology, this continues a “new normal” of high-priced pharmaceutical approvals. Other recent examples include Luxturna, a gene therapy that treats a rare, inherited form of blindness, costs $850,000 and Kymriah, a one-time cell therapy treatment for leukemia, costs $475,000. ^3,4

Background

The disease

• A “rare disease,” there are different types of SMA. They vary in severity. SMA1 is characterized by loss of motor neurons in the spinal cord and lower brain stem, resulting in severe and progressive muscular atrophy and weakness, which can lead to paralysis and difficulty breathing and swallowing.
• SMA1 is the most common form of the disease, accounting for an estimated 50% to 70% of all cases of childhood-onset SMA.
• There is no cure for any type of SMA, and there is no way to prevent it, as it is an inherited condition.
• Diagnosis of SMA1 is suspected by symptoms and confirmed by genetic testing.
• SMA1 is the leading genetic cause of infant mortality.

Current therapy

• Approved in 2016, Spinraza is the leading SMA therapy and is administered intrathecally (into the spinal canal) via four year-one doses (day 1, 15, 30 and 60) and then every 4 months thereafter at a list price of $750,000 for year one and about $375,000 per year thereafter. ^5,6,7
• Prior to Spinraza, there were no other effective treatments for SMA.

Newly approved therapy

• Zolgensma is designed to be a one-time treatment administered via a 60-minute intravenous infusion and its manufacturer has noted its price is 50% less than 10 years of the current therapy. The increased efficacy is due to clinical differences in gene targeting and binding methodology.
• Though being touted a “near cure” if delivered soon after birth, it may be too early to know how long the benefit of the treatment lasts since current data extends to only about five years and the medicine cannot reverse damage already done.

Key differences

• We defer detailed clinical discussions on the product to appropriate professionals but understand there are two key differences: 1) it is estimated that Zolgensma can be used to treat about 80% of SMA1 patients, while Spinraza is closer to 100%, and 2) Zolgensma will come with a “black box” warning for acute serious liver injury (see p. 2). ^8,9

Why Your CEO May Care

Your CEO may ask what the impact will be of Zolgensma and other suspected high-priced drugs awaiting FDA approval on the company.

• It is estimated there are approximately 700 patients currently eligible for the treatment in the United States and roughly 30 new babies are born each month with the disease.
• Rare-disease drugs have become increasingly popular with pharmaceutical and biotech companies and are expected to comprise 21.4 percent of worldwide prescription sales by 2022. ¹⁰
• Zolgensma is one of seven drugs set to enter the market in 2019 which are believed to become “blockbusters” by 2023. Immune-related and genetic disorder products dominate the list. ¹¹
• Wall Street analysts have forecast sales of Zolgensma will reach $2 billion by 2022; Spinraza sales hit $1.7 billion last year. ¹²

What Employers Can Do

• Spinraza was assigned a permanent J-Code in January 1, 2018. To get a sense of current exposure, you can search for J2326. ¹³
• Talk to your vendors about potential payment plans, as the manufacturer has stated it is “working closely with insurers to create 5-year agreements based on success of the treatment as well as other novel pay-over-time options.” It’s currently in “advanced discussions” with more than 15 insurers on payment options. ¹⁴
• Additionally, get an understanding of how the drug will be accessed since distribution will be limited to two specialty pharmacies, one of which is Accredo, yet market signals indicate the product will flow through the medical benefit. ¹⁵
• In addition to the payment plan, the manufacturer has also said it would provide a discount — how much has not been decided — if a patient who takes Zolgensma dies or eventually needs permanent ventilator support.
• Talk to your consultants and medical carrier about potential prior authorization criteria including among other things 1) increased coverage for companion diagnostics, 2) product limitations, 3) physician specialty requirements, and 4) how to handle patients who may currently be taking Spinraza.
• Also, ask about how both products may interact with another SMA-related drug in development, Risdiplam, which will be an oral drug. ¹⁶

Additional Resources

• What Your CEO is Reading: Potential Impact of Alleged Generic Price Fixing

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