Perhaps this year, Spark Therapeutics could be the first ever in the U.S. to win approval of a gene therapy with its one-time treatment for an inherited form of blindness. But an approval could also throw Spark into the line of fire in the U.S. fight over drug pricing that includes angry members of Congress, Presidential threats, and a drug industry both defensive and, in some quarters, eager to find solutions.
Spark CEO Jeff Marrazzo, speaking at the BIO CEO & Investor Conference in New York Tuesday, says he has been in the “solutions” camp for years, working to figure out a complex pricing model even before drug prices became a hot issue across the country.
If its blindness therapy passes FDA muster, Spark (NASDAQ: [[ticker:ONCE]]) faces a tough test. Insurers and their agents have pushed back more and more on drug prices, even against treatments for rare or “orphan” diseases with no alternatives.
Spark’s voretigene neparvovec would fit that description. It’s meant for children or young adults with inherited retinal diseases (IRDs) triggered by a mutation to the RPE65 gene. Spark has been testing its therapy on a subset of people with an IRD called Leber’s congenital amaurosis, or LCA2.
Leerink Partners analyst Joseph Schwartz, in a recent research note, estimated there are only 325 patients in the U.S. with LCA2, but the FDA said last month that Spark’s LCA2 data could potentially apply to other IRDs caused by RPE65 mutations, which could expand the use of voretigene. For example, there could be 3,000 people in the U.S. with the IRD retinitis pigmentosa, according to Leerink’s Schwartz. Spark has said it could complete an FDA application early this year, meaning an FDA decision is possible in 2017.
Marrazzo says these patients can range from “profound early and progressive [vision] loss to complete blindness.” Spark’s treatment is meant not just to halt that progression but potentially gain back vision that had been lost. The tiny potential population of patients is why Leerink’s Schwartz expects to “see little pushback” from payers should it win FDA approval.
Marrazzo expressed confidence this week about his talks with payers so far, but payers have begun taking hard stances against other rare disease drugs. Analysts, for instance, also predicted little resistance to Sarepta Therapeutics’s (NASDAQ: [[ticker:SRPT]]) Duchenne muscular dystrophy drug eteplirsen (Exondys 51), only to see several insurers try to limit coverage after the drug was approved in September.
Spark has an additional challenge: Voretigene is a gene therapy, a single treatment meant to produce a long lasting if not permanent effect. That makes it an unusual case for payers, who are used to dealing with claims for monthly supplies of pills or weekly injections. One question many gene therapy companies and others are wrestling with: What happens if the drugs don’t work, or the predicted long-term benefits wane over time?
The two gene therapies that have reached the market in Europe were priced with high lump sum payments to frontload the treatment costs: about $1 million for UniQure’s (NASDAQ: [[ticker:QURE]]) Glybera and $665,000 for GlaxoSmithKline’s Strimvelis. Strimvelis reportedly has a money back guarantee.
While Spark CEO Marrazzo has pledged to explore “alternative ideas,” as he reiterated in an interview with Xconomy in January, he also continues to express concern that the current healthcare policy landscape does not provide the right incentives for drug makers to produce one-time treatments that “restore health,” in his words. (In Spark’s case, that means voretigene potentially restoring people’s vision.)
That concern was echoed this week by John Glasspool, until recently the head of corporate strategy at Baxalta, which is now owned by rare disease treatment giant Shire. Glasspool was also in New York for the BIO CEO conference, speaking about payment models for gene therapy. It’s going to be tricky for drugmakers and insurers to come to terms on such payment structures, he said. Each patient’s response may vary. In addition, Glasspool questioned, what should be used to measure the value of each patient’s benefit? Should it simply be
