The CEO of Spark, Jeff Marrazzo, when interviewed by Bloomberg’s news service talks about the price stating, “We believe that this….reflects not only the breakthrough, life-altering value of one-time Luxturna, but it will enable us to continue to invest and build on the revolutionary science that supports not only Luxturna but the rest of our pipeline.”

Not to single out Spark for its pricing model which likely will be unaffordable to very few of the 2,000 Americans suffering from the flawed gene, the sticker shock of such new gene therapies and treatments is problematic. And at $850,000 it’s no wonder that the media has focused on price over performance.

In the Spark press release issued this week, it too focuses on payer programs, rebate arrangements, and innovative contracting models rather than the therapy itself. The goal states the release is “to reduce risk and financial burden for payers and treatment centers.”

Coming Up with a New Pricing Paradigm

As much as gene therapy breakthroughs show promise, the current practice of biomedical and pharmaceutical companies focusing on short-term return on investment and mitigating financial risk remains problematic.

One of the reasons is gene therapies like Luxturna are one-time administered cures. There are no repeat sessions. The patient’s eyesight improves and he or she goes home.  Another problem is the nature of the demographics of the targeted diseases that these gene therapies treat. Luxturna is a therapy for up to 2,000 Americans or 0.0006% of the entire U.S. population. When projected to the current world population of 7.6 billion, the entire market universe for Luxturna will equal 4.5 million one-time treatments over the products entire lifetime. Although that number seems fairly large, it represents small potatoes when compared to drugs created to deal with much larger population segments where lower pricing is possible because of scale.

In its announcement, Spark states it is prepared to “share risk with certain health insurers by paying rebates if patient outcomes fail to meet a specified threshold.” In other words, if the treatment doesn’t produce an agreed to outcome based on measurable scores, Spark will credit the treatment payer a percentage of the unit cost.

Since Spark needs a distribution channel to get to those who can benefit from Luxturna, it has created an innovative contracting model that includes hospitals, clinics, and insurance providers that will manage the processing of payments including capping the amount patients have to pay out-of-pocket for the one-time therapy.

Spark’s attempt to create ways to recover their costs and earn a reasonable return-on-investment is a reflection of the sticker shock associated with one-time gene therapies. David Mitchell, President of Patients for Affordable Drugs, an advocacy group concerned with the bankrupting potential of these treatments, states, “drug companies are still going to charge what they think they can get away with.”

So what is going to happen when one-time gene therapy treatments become available for diseases with much larger demographics? In September, Novartis announced an FDA approved $475,000 gene therapy for one form of childhood leukemia, also a rare condition.

But with 504 gene therapy clinical trials currently on the go globally governments and the medical sector including pharmaceutical companies need to create acceptable pricing strategies. Mark Trusheim, Director of MIT’s New Drug Development Paradigms program, has suggested that gene therapies be looked at differently using the analogy of renters who pay a monthly fee for an apartment, versus buyers who make a one-time purchase of a condo. Will the public, the gene therapy developers, and health insurers buy into this new pricing paradigm?

Canada’s primary colour is red. And it is something red that I want to talk about today. As a blood donor for life, I have always been cognizant of the challenges that people with haemophilia face every day. This blood disorder, where those who have it lack blood-clotting proteins, turns small cuts and bruises into dangerous health conditions. Undetected internal bleeding because the body lacks the necessary proteins is life threatening.

Haemophilia is a genetic disorder. So the best way to end it is to tackle the genetic source. That’s what Spark Therapeutics, founded in 2013, aims to do. The company began as a research project at Children’s Hospital of Philadelphia (CHOP). Its focus is gene therapy with 8 different investigational treatments in development and 4 in clinical trials. In 2016 its investigational trial on haemophilia B began a therapy treatment to deliver a healthy gene capable of producing the protein responsible for normal clotting in the body.

A trial of 4 patients involved each receiving an intravenous injection of trillions of engineered retroviruses containing the healthy gene. Post-treatment assessment indicates positive results.

One patient, Bill Maurits, is described in the MIT Technology review article, “Gene Therapy is Curing Hemophilia.” He no longer bleeds when he twists an ankle or bruises a shin. States Edward Tuddenham, a hematologist at University College London, “Right now this looks very close to being as good as it gets.”

Largely a male inherited disease that affects one in 5,000, haemophilia was made famous by the story of how it impacted the last Romanov Tsar and his family when the son and heir was stricken. Some historians argue that The Russian Communist Revolution may never have happened if not for haemophilia.

Before gene therapy, the only disease control technologies to control the condition were clotting factor concentrates, harvested from human blood donors and given to patients intravenously in the case of bleeds. In Canada, between 1982 and 1984, HIV contaminated clotting factor concentrates ended up infecting more than 700 hemophiliacs across the country with most dying from receiving these infected products.

A legacy of clotting factor concentrates between 1982 and 1984, were HIV contaminated products which infected recipients. In Canada, more than 700 hemophiliacs ended up with HIV/AIDS.

Gene therapy may end up curing haemophilia. But it has even greater promise for other genetic and inherited disorders. Retinal, liver-mediated, and neurodegenerative genetic diseases such as Huntington’s and Muscular Dystrophy may all be cured by this amazing technological advancement.