Brainstorm Health: Gene Therapy Cost, Roche Drug Approval, Medicaid Work Requirements

2017 has been a marquee year for gene therapy and medical technologies which harness—and manipulate—the body’s very biological building blocks to fight disease. But with great innovation comes profound questions about cost. And the expected sky-high price tags for new treatments in the cell-based therapeutics field will be an important factor for patients with deadly rare diseases.

A new report by the U.S. Institute for Clinical and Economic Review (ICER) suggests that the potential $1 million list price for Spark Therapeutics’ gene therapy Luxturna—which recently received a unanimous FDA advisory committee recommendation to treat a rare, inherited form of blindness, considerably bolstering its chances for regulatory clearance—isn’t validated by its expected benefit. (To be clear, no price has actually been set for Spark’s treatment since it hasn’t actually been approved yet.)

“[A]t a placeholder price of $1,000,000, the high cost makes this unlikely to be a cost-effective intervention at commonly used cost-effectiveness thresholds,” said the group.

ICER is a controversial entity among drug makers who argue it gives short shrift to life-changing medical innovation; Spark’s therapy, for instance, would only require a single dose for a potentially long-lasting benefit that gives sight to the blind. From an outside perspective, the notion of a $1 million drug might give many pause; for a patient who desperately wants to reverse his or her condition, the calculus could be more nuanced.

This debate isn’t limited to Spark, whose drug could be approved by mid-January or even sooner. Swiss pharma giant Novartis and U.S. biotech Gilead Sciences unit Kite Pharma both won landmark FDA approvals this year for cancer drugs that re-engineer the body’s immune system cells to kill cancerous cells, for instance. Novartis’ drug, Kymriah, comes with a $475,000 list price. However, that cost only kicks in if the treatment shows signs of working within the first month. Creative reimbursement arrangements like that may become the wave of the future in an age when medical technology and prices alike stun the mind.

Read on for the day’s news.

DIGITAL HEALTH

FDA issues regenerative medicine guidelines. The Food and Drug Administration has issued new guidance documents on regulatory pathways for regenerative medicines, including stem cell therapies. The guidelines are complex; but one important takeaway is that the agency wants to make it easier for treatments to reach the market. (Gizmodo)

INDICATIONS

Why a successful drug approval for Roche sent its rival's stock up. Roche scored an important FDA win on Thursday when the agency approved its hemophilia (a blood clotting disorder) drug Hemlibra. That's a critical development for the company as it attempts to make up for other products which are losing their patent protection; so why did the company's rival in the space, Shire, see its stock rise about 4% in Thursday trading? Roche's treatment will come with a "black box warning" over potential side effects. Still, Hemlibra could ring in more than $1.5 billion in annual sales by 2022, according to analysts. (Reuters)

THE BIG PICTURE

Will (and should) Medicaid beneficiaries face work requirements? Should Americans who are poor enough to qualify for health coverage through Medicaid have work requirements imposed on them? The Trump administration (through Centers for Medicare & Medicaid Services chief Seema Verma) are aiming for just that. The potential shift raises questions about the relationship between employment and health insurance—and the manner in which the two have become historically tied in America. (The Hill)

REQUIRED READING

Here's What Fortune's 20 Hottest CEOs Have in Common, by Clifton Leaf

Butterball to Sell Its First Organic Turkeys, by Natasha Bach

This Man Is Leading an AI Revolution in Silicon Valley, by Andrew Nusca

Airbnb Is Buying a Startup That Helps Accommodate Disabled Travelers, by Reuters