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The impending age of million-dollar drugs

Six things to consider as gene therapies hit the market.

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Million-dollar treatment costs aren’t completely new. For example, it’s not uncommon to spend over seven figures to treat some hemophilia patients per year. But that’s for multiple treatments. Now we are looking squarely into a new dawn of genetic therapies that will cost upwards of $1 million per treatment.

1. Gene therapies represent a paradigm shift in how we treat some diseases

Gene therapies are not just another new class of drugs. Unlike most conventional pharmaceuticals which treat symptoms of a given disease, gene therapies aim to cure diseases by correcting the underlying genetic abnormalities causing the disease.1 As the name implies, gene therapies work by modifying a stretch of DNA on a gene.1 Scientists use highly targeted techniques to actually change the genetic code of specific tissues.1

2. The first FDA-approved approved gene therapy is now available

Luxturna™ (voretigene neparvovec-rzyl) is a gene therapy used to treat an inherited form of vision loss known as retinal dystrophy. Approved by the U.S. Food and Drug Administration in December 2017, Luxturna targets mutations in a specific gene linked to retinal dystrophy and can be used to treat patients who have a specific mutation known as RPE65.2 The first patient to receive Luxturna, a 13-year old boy from New Jersey, received the treatment in March. His vision is already improving.3

3. The cost implications are momentous

The list price of Luxturna is $850,000 or $425,000 per eye. The price came in below the million-dollar threshold and was less than what some analysts had predicted.4 But the interesting part for us is how the maker of Luxturna, Spark Therapeutics, arrived at a price for the therapy. The CEO of Spark says that in addition to research and development costs, the company also considered the indirect costs of untreated retinal dystrophy, including the high rate of unemployment among blind people and the costs of caregivers, while determining the cost of Luxturna.5 Extrapolate this pricing philosophy to upcoming gene therapies for conditions such as hemophilia, where total annual treatment costs of up to $1 million are not uncommon, and list prices of $1.5 million – or more – for a potential “one-shot” treatment become a real possibility.6

4. Gene therapies can be difficult to produce

Given their inherent complexity and biological nature, gene therapies can be difficult to manufacturer at scale.7 Generating a large amount of a given gene therapy, consistently, and even finding the raw materials to deliver the drug , can present a challenge.7 For example, “viral vectors” are specially engineered viruses that are used to essentially “smuggle” the altered genetic material past the body’s immune defenses.8 However, few gene-therapy companies have the expertise or manufacturing facilities to make their own viral vectors. So even with all the other challenges met, obtaining the viral vectors necessary to deliver the gene therapy can also present a bottleneck.8

5. The FDA has expedited reviews of gene therapies

Much as manufacturers are making adjustments to account for gene therapies, so are regulators. In November 2017 the FDA released new guidance noting that gene therapies are eligible for the FDA’s expedited approval programs, including fast track designation, breakthrough therapy designation, accelerated approval, and priority review designation.9 For example, a gene therapy for hemophilia was given a breakthrough therapy designation by the FDA, which is intended to expedite development and review of new drugs to address unmet medical needs in the treatment of a serious condition.10

6. Many more gene therapies are in development

The type of retinal dystrophy treated by Luxturna is rare, with an estimated 1,000 and 2,000 people in the U.S. eligible for the treatment.2 But gene therapies are also in development for a wide array of other diseases. Many of the gene therapies furthest along in clinical trials are for disorders caused by a mutation in a single gene, such as hemophilia, sickle cell anemia and cystic fibrosis.11 Elsewhere, gene therapies are being developed to target diseases resulting from mutations in multiple genes, including cancer11, Alzheimer’s12 and amyotrophic lateral sclerosis13 (ALS). Gene therapies are even being considered for infectious diseases such as HIV.14

Moving forward, as more gene therapies are developed for more common diseases, it is reasonable to expect overall spending in the class to rise. OptumRx closely monitors and evaluates the drug development pipeline landscape for upcoming drug approvals, and new treatment classes. As gene therapies enter the market, we will be ready to offer members the resources, programs and clinical assistance they will need to manage their new medications effectively, safely and with confidence.

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  1. FDA. “What is gene therapy? How does it Work?” Accessed at: https://www.fda.gov/ForConsumers/ConsumerUpdates/ucm589197.htm
  2. FDA. “FDA approves novel gene therapy to treat patients with a rare form of inherited vision loss.” Accessed at 
  3. STAT. “After nerve-wracking eye surgery, the world comes into focus for early gene therapy recipient.” Accessed at: https://www.statnews.com/2018/05/17/Luxturna-gene-therapy-surgery-followup/
  4. CNBC. “First US drug priced at more than $1 million may be on the horizon.” Accessed at: https://www.cnbc.com/2018/05/07/uss-first-drug-priced-at-more-than-1-million-may-be-on-the-horizon.html
  5. Endpoint News. “How much is your vision worth? Spark CEO Jeff Marrazzo has a price in mind.” Accessed at: https://endpts.com/spark-ceo-jeff-marrazzo-has-done-the-math-on-blindness-and-hes-come-up-with-a-blockbuster-price-for-lead-gene-therapy/
  6. BioSpace. “Gene therapies for hemophilia could hit $1.5 Million, analysts speculate.” Accessed at: https://www.biospace.com/article/gene-therapies-for-hemophilia-could-hit-1-5-million-analysts-speculate/
  7. BioPharma. “Cell and gene therapies face manufacturing challenges.” Accessed at: http://www.biopharminternational.com/cell-and-gene-therapies-face-manufacturing-challenges
  8. New York Times. “Gene therapy hits a peculiar roadblock: a virus shortage.” Accessed at: https://www.nytimes.com/2017/11/27/health/gene-therapy-virus-shortage.html?_r=0
  9. FDA. “Expedited programs for regenerative medicine therapies for serious conditions.” Accessed at: https://www.fda.gov/BiologicsBloodVaccines/GuidanceComplianceRegulatoryInformation/Guidances/CellularandGeneTherapy/default.htm
  10. PharmaPhorum. “Breakthrough status for BioMarin ratchets up hemophilia A competition.” Accessed at: https://pharmaphorum.com/news/breakthrough-status-biomarin-ratchets-haemophilia-competition/
  11. Genetic Engineering &Biotechnology News. “25 up and coming gene therapies.” Accessed at: https://www.genengnews.com/the-lists/25-up-and-coming-gene-therapies/77901090
  12. National Center for Biotechnology Information. “Gene therapy models of Alzheimer's Disease and other dementias.” Accessed at: https://www.ncbi.nlm.nih.gov/pubmed/26611599
  13. ALS News Today. “First trial of potential ALS gene therapy VM202 Shows Treatment’s Safety.” Accessed at: https://alsnewstoday.com/2017/09/15/potential-als-gene-therapy-vm202-vm-biopharma-seen-safe-first-clinical-trial/
  14. Cell.com “Gene therapy for infectious diseases.” Accessed at: https://www.cell.com/molecular-therapy-family/molecular-therapy/fulltext/S1525-0016(00)90164-3
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This article is directed solely to its intended audience about important developments affecting the pharmacy benefits business. It is not intended to promote the use of any drug mentioned in the article and neither the author nor OptumRx has accepted any form of compensation for the preparation or distribution of this article.