Luxturna Carries Potential to Correct Blindness, $850k Price Tag

When the US Food and Drug Administration (FDA) last month approved Luxturna, the first-ever therapy for a genetic disease, excitement abounded. Following the announcement, FDA commissioner Scott Gottlieb, MD, said he believed gene therapies like Luxturna will soon be mainstays “in treating, and maybe curing, many of our most devastating and intractable illnesses.”

Clinical trial evidence suggested that the novel gene therapy holds that potential for patients with biallelic RPE65 mutation-associated retinal dystrophy, which often progresses to blindness. Still, a big question remained: what would it cost?

Jeff Marrazzo

Jeff Marrazzo

Many experts predicted Luxturna (voretigene neparvovec-rzyl) would ring in at about $1 million because it’s designed for a rare genetic disease and a small patient population. They weren’t far off. On January 3, Luxturna’s maker Spark Therapeutics gave the medical community its answer: $850,000 for a complete, one-time operation, or $425,000 per eye.

A blog post co-authored by Spark Therapeutics CEO Jeff Marrazzo said that high gene therapy prices like the one for Luxturna are driven by high early-stage failure rates, lack of formal guidance for good manufacturing practices and supply chain management strategies, and the need for highly specialized treatment centers.

However, on the same day as the pricing announcement, Marrazzo said in a statement that Spark would harness “the same level of innovation applied in development of the treatment to the delivery of, and access to, the treatment.”

“The obligation, as I see it, is to ensure that you have access. Ultimately, if you price it at a point that is too high, and you don’t have access…you don’t have patients who get therapy and get access to this one time treatment. You’re not maximizing anything when it comes to generating revenue and topline for business,” Marrazzo said at the Forbes 2017 Healthcare Summit. “I think that question of access is a really important one, and has, ultimately, a lot of different components to it in the context of these one-time treatments.”

In the statement, Spark summarily outlined 3 new payer programs to facilitate access to Luxturna:

• An outcomes-based rebate arrangement with a long-term durability measure where Spark would share risk with certain health insurers by paying rebates if patient outcomes failed to meet a specified threshold, thereby linking payment to both 30-90 day efficacy and 30-month durability.
• An innovative contracting model, through which Spark would enter into an agreement with commercial payers. The payer or payer’s specialty pharmacy — rather than the treatment center – purchases Luxturna. As part of this agreement, the payer agrees to provide coverage for its members, expedite benefits processing and cap patient out-of-pocket amounts at in-network limits. Separately, the payer would agree with the treatment center on reimbursement commensurate with the type of specialized medical care required to deliver the therapy.
• A proposal to CMS under which payments for Luxturna would be made over time, which is not currently available “due to current government price reporting requirements,” according to Spark. The company has submitted a proposal to CMS that would enable them to offer commercial and government payers an installment payment option and greater rebates tied to clinical outcomes.

“We are encouraged by CMS’ willingness to engage with us in exploring a new model,” Marrazzo said. “We are also eager to work with CMS to enable more meaningful rebates as part of the pay-for-performance model. We are confident in the clinical meaningfulness of Luxturna and willing to stand behind the product’s efficacy and durability from a single dose.”

According to the statement, Harvard Pilgrim and affiliates of Express Scripts have agreed in principle to participate in Spark’s facilitated access programs, and discussions are underway with additional commercial insurers.

Express Scripts Chief Medical Officer Steve Miller, who is well known for his critiques of high drug prices, called Luxturna’s $850,000 price tag “responsible.”

“To be very frank, they’ve hit a responsible price. Is it inexpensive? Absolutely not. But it’s responsible,” Miller told Forbes.