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Home / Business / Massachusetts payment plan for Novartis’s $5 million gene therapy

Massachusetts payment plan for Novartis’s $5 million gene therapy



In recent years, no treatment was available for the rare and devastating disease known as spinal muscular atrophy.

Now, within a few months, an experimental therapy once designed to address the underlying genetic cause of the disease could treat the disorder. But first, someone has to pay for his potential multimillion dollar price.

A new effort is underway in Massachusetts to figure out how to do it. The idea is to let health insurers pay for treatment for several years. If it succeeds, the organizers hope it can be a viable model for the entire United States.

The AveXis unit of Novartis, which makes gene therapy, Zolgensma, and suggested a price of up to $ 5 million may be appropriate, is in talks to participate. Business Insider is the first to report both the plan and the interests of AveXis of Novartis.

Americans have long paid large items such as homes and automobiles in a similar way. But the plan ̵

1; if it is finalized – will mark one of the first approaches of this kind for a medicine. And Novartis will only receive each of its payments if the treatment is effective.

Paying drugs on an installment plan

"Think of an installment plan that is related to how well therapy works: it would be a car loan but you still have to see if the car is going to work," Mark Trusheim, strategic director of the NEWDIGS program of the MIT Center for Biomedical Innovation, told Business Insider.

NEWDIGS brings organizations together to discuss how the US healthcare system will be able to pay for expensive care, and the Massachusetts initiative has come out of it, Trusheim said.

This work has become increasingly important as it is likely that more genetic therapies will become available in the coming years for various diseases, according to experts interviewed for this story. The gene therapies are typically administered in a single treatment and may have very high price tags compared to other types of drugs. This could impose huge costs and challenges to an unprepared healthcare system

Read more: From gene therapy that has stimulated a $ 9 billion acquisition to a CBD drug for rare types of childhood epilepsy, here are the 12 promising drugs to keep an eye on in 2019

Making the unthinkable, at an exceptional price

Gene therapy is a cutting-edge technology with the potential to cure diseases by fumbling with the genetic material of the body. Drug manufacturers have cited the value these new products could bring to patients and the medical system to justify their high prices.

Spinal muscular atrophy is a rare genetic condition that affects muscle movement in children and is the main genetic cause of mortality in children.

It is estimated that between 10,000 and 25,000 individuals in the United States have SMA, according to the SMA Foundation. But far fewer individuals would probably be treated with Zolgensma, since it is thought that only newborns would be suitable.

In Massachusetts, only one or two dozen patients are expected each year to the maximum, according to Trusheim. A US approval decision, Zolgensma, is scheduled for May, and Novartis will probably not publish a precise price until then.

An independent group that evaluates drug prices said the treatment could merit a price of $ 1.6 million to $ 5 million, Novartis Pharmaceuticals CEO Paul Hudson told Business Insider this week, noting that cost of the ventilators and another expensive therapy for the rare disease over a five-year period were, in total, comparable.

AveXis intends to explore the "creative" ways to get paid for her new treatment

Hudson directs the activity that oversees AveXis SMA gene therapy. AveXis has not commented specifically on its participation in the Massachusetts program, but said in a statement that gene therapies require new approaches in the US health care system.

"Our goal is to ensure that patients have access to this therapy, so we can make a significant difference in their lives," said the AveXis statement. "We are working closely with payers to ensure we set appropriate prices that reflect the value of gene therapy and explore creative options for payers, including payment options, as well as performance-based agreements."

Whilst the Massachusetts pilot is currently in place, the price of Zolgensma would be paid by the health insurers in five annual installments spread over four years. It is similar to a blueprint presented by Bluebird Bio biotech at the start of this week, said MIT's Trusheim.

Read more: A biotech is proposing a plan to pay for the expensive treatment of rare diseases in the same way as buying a TV or a dishwasher

The program starts with the Novartis product, but intends to add other gene therapies over time. Many, but not all, Massachusetts health insurers are involved in the discussions, Trusheim said, and others could possibly join. Its organizers hope to launch it later this summer and believe they have faced many of the challenges of this type of approach.

"We should not let costs intrude"

A crucial challenge for these types of installment plans is what happens when patients replace health insurers. In this case, insurers wishing to participate in the Massachusetts pilot project agreed to recover the remaining payments remaining in installments.

"If you believe that these things can change the lives of those in need, then we should not let the costs intrude," Dr. Michael Sherman, chief medical officer of the non-profit health insurer Harvard Pilgrim, said Business Insider. If the program takes off, Harvard Pilgrim intends to be part of it, he said.

The planners are still processing more details. For example, even if the payment structure and performance metrics for gene therapy would be the same among insurers, every single health plan would negotiate its price for Zolgensma.

Insurers will also have to solve with Novartis what happens if a patient moves to another state. This could include continuing to make payments or potentially make a one-time exit payment.

Another challenge is the legal requirement that the government's Medicaid program obtain the "best price" for a drug. This could complicate this type of installment plan, since a failed treatment in which only one installment is paid could be interpreted as a violation of the "best price" guarantee.

To learn more: Bill Gates warns that no one is paying attention to genetic editing, a new technology that could further worsen inequality

Why atrophy Spinal muscular tissue is so rare, health insurers have not expressed concerns about the price tag of Zolgensma specifically, Hudson told Business Insider this week. Instead, they would like the flexibility to pay in installments, if necessary, according to Hudson.

"What they are not saying is," We're worried about the price. "What they're saying is," We might have concerns about temporary payments, "Hudson said.

Learn more about Lydia Ramsey

More information on pharmaceutical innovation:

The $ 230 billion pharmaceutical giant Novartis CEO explains why he is not afraid to buy biotechnology at an earlier and more risky stage

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One of the biggest drug producers in the world thinks they have 26 billion dollars of drugs coming – that's what they're aiming to treat [19659037]
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