WASHINGTON -- A first-of-its kind genetic treatment for blindness will cost $850,000, less than the $1 million price tag that had been expected, but still among the most expensive medicines in the world.
Spark Therapeutics said Wednesday it decided on the lower price for Luxturna (Lux-turn-a) after hearing concerns from health insurers about their ability to cover the injectable treatment.
Consternation over skyrocketing drug prices, especially in the U.S., has led to intense scrutiny from patients, Congress, insurers and hospitals.
"We wanted to balance the value and the affordability concerns with a responsible price that would ensure access to patients," said CEO Jeffrey Marrazzo, in an interview with The Associated Press.
Luxturna is still significantly more expensive than nearly every other medicine on the global market, including two other gene therapies approved earlier last year in the U.S. Approved last month, Luxturna, is the nation's first gene therapy for an inherited disease. It can improve the vision of those with a rare form of blindness that is estimated to affect just a few thousand people in the U.S.
Luxturna is an injection - one for each eye - that replaces a defective gene in the retina, tissue at the back of the eye that converts light into electric signals that produce vision. The therapy will cost $425,000 per injection.
The treatment is part of an emerging field of medicine that could produce dozens of new gene-targeting medications in the next few years.
These therapies are generally intended to be taken once, a fact which drug developers argue sets them apart from traditional drugs taken for months or years.
But even compared to other one-time gene therapies Luxturna is still an outlier. Two customized gene therapies for blood cancer approved last year are priced at $373,000 and $475,000, respectively.
Many older drugs for ultra-rare diseases also cost hundreds of thousands of dollars per year, and can quickly exceed a million dollars. For instance, a drug from Biogen called Spinraza, which treats a rare neuromuscular disorder, costs $750,000 for the first year's supply and $375,000 for subsequent years. The drug intended to be taken for life.
Drug prices are not regulated in the U.S., as they are in many other countries, so drugmakers can price their goods like any other manufacturer. Drugmakers have historically offered little explanation for the prices they charge, other than to cite the high cost of developing a drug and the fact that so many drugs fail during trials and must be abandoned. However, some companies have begun to offer more detailed reasoning as the backlash against drug prices has grown more heated.
Spark Therapeutics, based in Philadelphia, has said that the cost for a lifetime of blindness - including lost earnings and caregiver wages - can easily exceed $1 million.
Not everyone agrees with that argument. A preliminary analysis by one group found the drug would have to be priced significantly lower "to be a cost-effective intervention."
The estimate by the non-profit Institute for Clinical and Economic Review assumes the drug would maintain patients' vision for 10 years. However, Spark expects the drug's effect to be long-lasting, if not lifelong, though it has only tracked patients for about four years.
At least one gene therapy sold overseas has already crossed the $1-million price threshold, a treatment for a rare protein disorder launched in Europe. Manufacturer uniQure stopped selling the therapy last year after seeing a lack of demand. It was never approved in the U.S.
Like most prescription medicines in the U.S., most of the immediate costs of Luxturna will be borne by insurers - not patients - including private plans and government programs. For patients, Spark said it would cover all out-of-pocket expenses needed to obtain the medication, including transportation to hospitals trained to administer the injections.
Given Luxturna's federal approval and strong study results, experts say U.S. insurers will likely cover the drug.
"If they decided not to cover it they would immediately have to face negative publicity," said Meredith Rosenthal, a professor of health economics at Harvard University. She added that while insurers excel at negotiating price cuts on conventional drugs with multiple competitors, they have little leverage on the prices of breakthrough drugs.
Spark will try to deflect some pricing concerns by offering unconventional payment plans to insurers. Under one arrangement with the non-profit insurer Harvard Pilgrim, Spark will repay some of Luxturna's costs if patients don't experience the expected improvements in vision. The company did not disclose how much money would be returned to the insurer, which covers more than a million people in New England.
Spark said it is also discussing a proposal in which insurers would pay for the drug in installments over several years. That idea would apply to government programs like Medicare and Medicaid, which provide health coverage to the poor and elderly.