Gene therapy in healthcare has become a reality, and it is set to move from a trickle to a stream in the next few years. In fact, Former FDA Commissioner Scott Gottlieb and former Director of the Center for Biologics Evaluation and Research Peter Marks predict that by 2025, the FDA may approve 10–20 new cell and gene therapy products per year. As of January 2019, more than 800 active cell-based or directly-administered gene therapy investigational new drug applications had been recorded, and they anticipated an additional 200 submissions annually beginning in 2020.
More than 60 gene therapies currently in development or clinical trials are expected to be on the market by 2024, with sales for the same period are forecasted to reach $15 billion, according to EvaluatePharma. This activity reflects a turning point in the development of these technologies and their application to human health. It bears a strong resemblance to the period that marked an acceleration in the development of antibody drugs in the late 1990s and led to the mainstreaming of monoclonal antibodies as the backbone of modern treatment regimens.
The Rise of Gene Therapies
In 2003, China became the first country to approve a commercial gene therapy. The product, called Gendicine, is used for treatment of head and neck squamous cell cancer. Its approval has gone largely unnoticed outside of China, however, due to researchers elsewhere having concerns regarding the quality of the clinical trials and therefore the safety and efficacy of the treatment. There are other gene therapies commercially available in Europe that are not approved in the United States. Many of these therapies are directed at very specific patient populations with rare diseases.
Commercial gene therapy eventually became widely discussed in healthcare and insurance arenas in the United States in August of 2017 with the FDA approval of Kymriah, which was used for treatment of B-cell leukemia and later for B-cell lymphoma. This was quickly followed by Yescarta, which the FDA approved on October 18 the same year for treatment of adult B-cell lymphoma. Then on December 19, 2017, Luxturna became the first gene therapy approved for an inheritable disease. (Luxturna is for treatment of retinal dystrophy, a rare condition that destroys cells in the retina needed for healthy vision.)
Zolgensma is the most recent gene therapy approved by the FDA on May 24, 2019. It is intended for use in children less than 2 years old with spinal muscular atrophy (SMA). It comes with a price of $2.4 million average whole price (AWP), and is believed to be the highest price set in pharmaceutical history for a one-time treatment. The next gene therapies anticipated to be approved by the FDA in 2020 are Zynteglo, which treats beta-thalassemia, and Valrox for Hemophilia A. Zynteglo has already been approved by European health regulators. Its cost is $1.8 million, while the predicted cost for Valrox is $2 million for the one-time treatment.
Emerging Therapies and Their Costs
Let’s take a closer look at Zolgensma and the therapies expected to win FDA approval in 2020. We’ll examine what they do and their anticipated costs.
Zolgensma: This drug is approved to treat children younger than 2 years old with SMA. This is a rare genetic disorder where individuals are missing the motor neuron protein called SMN (survival motor neuron). Lack of this motor neuron protein results in deterioration of the neuromuscular functioning of the body evidenced by muscle weakness, breathing and feeding difficulties, and paralysis. Novartis (manufacturer of Zolgensma) estimates there are 400 babies born with this disease in the US per year, or an average of 30 babies per month. An additional 700 patients are also eligible for the treatment.
Managed Care magazine (July/August 2019 issue)
There are two categories of SMA: type I and type II. Type I is a more severe form, causing rapid motor neuron loss and resulting in death or permanent ventilation support in more than 90% of patients if left untreated. Type 2 leads to mortality in more than 30% of patients by 25 years of age. Prior to the advent of Zolgensma, patients were prescribed Spinraza which would be for a lifetime. Spinraza costs $750,000 the first year and $375,000 for each subsequent year. Once a child has received Zolgensma, s/he is no longer eligible to receive Spinraza.
Cost and Payment Plan: Zolgensma is a one-time infusion with an average whole price (AWP) of $2.4 million. If given to the appropriate individual at the right time, it would essentially cure that individual and eliminate the need for a lifetime of ongoing, expensive therapies. Summit Re contacted Novartis, which confirmed that Zolgensma is distributed by a limited number of pharmacies. In September 2019, we contacted each of the pharmacies for pricing, extended payment programs, etc. If interested, contact your Summit ReSources representative for more information.
There has been a fair amount of discussion regarding the FDA approval of Zolgensma and the clinical trial on which the approval was based (STR1VE trial- NCT03306277). The large insurance carriers have recently released clinical policies on how they plan to handle prior authorization requests for Zolgensma which focus on age of the child and severity of the disease.
Summit Re and Zurich Re have also spent a fair amount of time researching the literature, reviewing the clinical trial, and consulting with our pharmacy partners. We are in agreement with and recommend use of the guidelines outlined in the United Healthcare clinical policy. You can find that clinical policy on United HealthCare’s provider site here: https://www.uhcprovider.com/content/provider/en/viewer.html?file=%2Fcontent%2Fdam%2Fprovider%2Fdocs%2Fpublic%2Fpolicies%2Fcomm-medical-drug%2Fzolgensma.pdf. The policy also provides detailed information about SMA. Please note that Summit Re and the carriers we represent do not provide prior authorization of reinsurance/stop loss reimbursement on any potential claim.
According to Managed Care magazine (July/August 2019 issue), a US law requires a manufacturer to give the Medicaid program a discount – in the case of Zolgensma, the discount totals either 17.1% or a rebate based on the lowest price that the manufacturer sold the drug to other payers during a given quarter. Under the “best price” rules, if AveXis accepted a deeply discounted price for an insurer’s only SMA patient for whom the drug performed poorly (outcome based), it could trigger that same deep discount for all Medicaid sales in the entire country for that quarter. Federal regulators recognize the problem and are open to fixing it but have yet to figure out how to do so under the current law, according to Michael Sherman, MD of Harvard Pilgrim. In January 2019 a bipartisan bill named the Patient Affordability, Value and Efficiency Act designed to fix the problem was introduced by Senators Bill Cassidy and Mark Warner. Hopefully this problem will be solved over the next couple of years, though government wheels often turn slowly.
Of note: all denials of this drug by United and Aetna as of Nov 8, 2019 have been overturned on appeal. These are not related to Summit Re claims.
Zynteglo: Per a press release dated 3 January 2020, manufacturer bluebird bio has been approved to manufacture Zynteglo; it will be distributed by Germany’s Apceth Biopharma. This gene therapy consists of stem cells engineered to hold a functional copy of a modified beta-globin gene. It is intended for treatment of beta-thalassemia patients aged 12 years and older who require regular blood transfusions every two to five weeks to fight anemia and have no matching donor for a stem cell transplant. Patients with this blood disorder carry a genetic mutation that hinders the body from effectively producing the critical oxygen-carrying protein hemoglobin. It is estimated there are between 2,000 and 3,000 patients in the European Union who would be eligible under the approved conditions.
Cost and Payment Plan: Zynteglo’s price tag is $1.8 million per patient. It will initially be offered in Germany, Italy, the U.K., and France, with country-by-country market access to follow. An installment plan offered over 5 years would require later payments only if the treatment continues to benefit patients. Various sources note that the initial payment would be $355,000, with 4 equal installments paid over the next four years as long as the patient is still free of blood transfusions. Bluebird bio said it is also testing Zynteglo for treatment of sickle cell disease. The company expects the therapy to be approved for beta thalassemia in the United States in 2020.
Factor VIII and Factor IX: Factor VIII and factor IX gene therapies to treat hemophilia are both currently in phase III clinical trials.
Valrox (Valoctocogen roxaparvovec) by Biomarin Pharmaceutical is in clinical trials for factor VIII gene therapy and is expected to be approved in the last half of 2020. This therapy uses a viral vector to deliver a functional gene for the factor VIII, the clotting factor missing in this form of the blood disorder. In clinical trials, patients who received the injection saw their bleeding episodes drop from an average of 16.5 to an average of zero, an impact that was sustained for three years. The predicted cost for Valrox is $2 million for the one-time treatment. Per the Wall Street Journal dated 16 January 2020, BioMarin Pharmaceutical Inc. is exploring pricing of its experimental gene therapy for hemophilia patients at between $2 million and $3 million. If it is approved, it may exceed Zolgensma as the most expensive drug in the world. Estimated sales of $1,210 million by 2024 are anticipated if approved.
AMT-061 by Uniqure is a factor IX gene therapy, also in phase III clinical trials. It is estimated to have sales of $458 million by 2024 if approved.
Please contact your Summit Re representative as soon as you become aware of a request for Zolgensma or any other gene therapy. Our Summit ReSources managed care staff is available to answer any questions or concerns you may have. We will continue to investigate and provide information to our clients as this field of medicine continues to evolve.
Article by Ginny Fisher, RN, BSN, CCM, Managed Care Specialist. For more information about how this may affect your plan, please contact your Summit ReSources care specialist. The following sources were used as reference material for this article:
https://www.fda.gov/vaccines-blood-biologics/zolgensma
https://www.nytimes.com/2019/05/24/health/zolgensma-gene-therapy-drug.html
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