There is no one-size-fits-all model for cell and gene therapy pricing plans says Orchard Therapeutics, but industry must adapt a system set up for chronic care to incorporate curative one-off treatments.
There have been questions over how payors and insurance firms would cope with such next-generation therapeutics have been asked ever since Novartis launched its first cell and gene therapy product Kymriah (tisagenlecleucel) in 2017 at a list price of $475,000.
But the recent US Food and Drug Administration (FDA) approval of Novartis’ Zolgensma (onasemnogene abeparvovec) has taken pricing to a new level, with the $2.1 million price tag somewhat overshadowing the one-off curative nature of the spinal muscular atrophy (SMA) gene therapy.
Along with the approval announcement, Novartis issued a press release justifying the price and announcing a pay-over-time option of $425,000 per year for five years, in unison with an educational program aimed at payors and reimbursement firms.
Such strategies and models will need to become more commonplace as more personalized medicines become available, Mark Rothera, CEO of Orchard Therapuetics said on his firm’s financial call in light of Novartis’ success.
“Clearly, when it comes to things like value and pricing, we need to take a highly individualized approach to all of our programs, and we’ll be looking at them all individually. These are really complex, highly technical, personalized medical treatment,” he said.
Orchard Therapeutics’ pipeline includes the former GSK autologous ex vivo hematopoietic stem cell (HSC) gene therapy Strimvelis approved by the EMA in 2016, and five clinical stage programs.
“We’re talking about harvesting a person’s own stem cells, inserting a working copy of the defective gene, and returning these to patients, and we’re looking at potentially stopping or curing these conditions in a single administration.”
One size does not fit all
He added “the once-and-done nature of these therapies has tremendous potential to free-up healthcare resources over the long-term that would otherwise be consumed by patients, and that financial impact shouldn’t be underestimated.”
Novartis stressed this point in its press release, claiming the long-term cost of Zolgensma will be “50% less than multiple established value-based pricing benchmarks including the 10-year current cost of chronic SMA therapy.”
As such, Orchard will look at its programs to think about their medical value and the overall long-term cost to the system, Rothera said.
“We see ourselves as part of the conversation of how do we adapt to a system, which was really originally set up for chronic care from a payer and reimbursement point of view to one that can successfully integrate curative or transformative one-off treatments.
“We’re really open as far as the different possible structures to that, and we alluded to that in the actual earnings call. We are engaged with many stakeholders in this conversation. We’re open to the possibility of things like risk sharing or stage payments, but I don’t think it’s a one-size-fits-all model. There are many different payers that may have different needs, and once we’ve agreed on the value proposition, we need to think about how we tailor the payment model to their needs.”