• by Thom Forbes , January 4, 2018

What price do you put on something like restoring a person's eyesight? Spark Therapies says $850,000 with a money-back guarantee for its Luxturna gene therapy. 

Reactions to the announcement yesterday range from the headline “U.S. drug firm says it can cure blindness — but it’s going to cost an arm and a leg” in the South China Morning Post to Bloomberg “Gadfly” columnist Max Nisen pointing out that the price tag is less than had been expected and that a performance-based discount program for a drug therapy is “a risky move.”

The one-time treatment “helps restore sight for patients with a rare genetic condition,” Nisen writes. However, “there are very few such patients, and the price of every treatment matters a great deal. 

“But it’s the right move,” he continues, “and highlights a recent trend toward (relative) pricing moderation with big implications for the drug industry.”

Spark, in fact, says there will be three distinct “payer programs” to ensure that U.S. patients who need treatment can get it: “an outcomes-based rebate arrangement with a long-term durability measure, an innovative contracting model and a proposal to [Centers for Medicare and Medicaid Services] under which payments for Luxturna would be made over time.”

Across the pond, “Luxturna could potentially become available free on the [National Health Service] in the U.K. after being submitted for approval by the European Medicines Agency (EMA). A green light from the EMA is a prerequisite for approval by the National Institute for Health and Care Excellence, the U.K.’s healthcare costs watchdog,” Rob Davies reports in The Guardian.

“It's wildly expensive but, to be very frank, I think they've priced it what I’ll call responsibly,” Dr. Steve Miller, chief medical officer of pharmacy benefits manager Express Scripts, tells CNBC’s Meg Tirrell in a joint interview with Spark CEO Jeff Marrazzo prior to the public announcement. “The product is just phenomenally innovative, and we've been talking about gene therapy for over 20 years. We're now at the threshold of having gene therapy reaching patients,” Miller continues.

Express Scripts is partnering with Spark for distribution of Luxturna, Terrell reports.

“It came down to the value we believed was inherent in the therapy,” Spark’s Marrazzo tells her. “We also heard and did market research with payers … and wanted to take into account the questions and challenges they had about affordability. Ultimately, this is about access.”

Marrazzo tells Forbes’s Matthew Herper “that his goal was to create a ‘menu’ of options for insurers … that would allow Spark to stand behind the company’s faith in Luxturna’s efficacy, present an alternative to the current ‘buy and bill' model in which drugs are always purchased for a one-time cost, and address the problem of ‘cost density,’ that is, if you’re a hospital, it’s pretty tough to purchase an $850,000 treatment, or, even worse, to keep such a treatment in stock, even if it is worth the money because it represents such a big capital cost.”

High cost aside, the potential for gene therapies is broad and the field is just coming into its own in the marketplace.

“In August 2017 the FDA approved the first gene therapy for public use in the United States. Called Kymriah, the drug was targeted at a very specific form of blood and bone marrow cancer. The therapy was controversially priced at $475,000 per treatment,” Rich Haridy reminds us on New Atlas. Kymriah, too, carries a guarantee that there will be no charge if the treatment does not work, however.

The FDA then approved Luxturna a couple of weeks ago. 

The inherited disorder it treats often leads to blindness, reports CNN’s Susan Scutti. “The mutation affects both eyes, usually at the same pace, so most patients would need treatment for both eyes, a Spark Therapeutics spokeswoman said,” she writes.

Clinical trials for gene therapies are being conducted for a wide range of other conditions.

“Although much of this may still sound like the realm of mad scientists tinkering with the human body, gene therapy is an accepted experimental technique that is currently being used to help patients with certain types of cancer to ‘target' specific antibodies that can be used to fight the disease,” according to a blog post by Science Care, which runs a whole body donation program. “Gene therapy is also being used to correct deficiencies in the production of dopamine, such as in Parkinson’s disease, correct some immune system problems, and restore components needed for normal blood cell function in those with certain blood diseases, such hemophilia and beta-Thalassemia. Gene therapy holds promise for treating a wide range of diseases, including cancer, cystic fibrosis, heart disease, diabetes, hemophilia and AIDS.”