Novartis announced today that it will sell a newly approved gene therapy for $2.125 million for a single infusion, making it the most expensive single-dose drug ever. The Swiss drugmaker said it will implement a five-year payment plan for an annual cost of $425,000.
Novartis’ Zolgensma, which FDA approved earlier in the day, is designed to replace the defective or missing gene causing spinal muscular atrophy or SMA, a rare but often fatal disease. Many children born with it die by their second birthday, and it is the leading genetic cause of infant mortality in the country.
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The announcement came shortly after President Donald Trump appeared on television boasting about lowering drug prices.
The nonprofit Institute for Clinical and Economic Review today estimated a cost-effective price for the new medicine would be $1.1 million to $1.9 million per treatment in one of its analytic models. Executives said in a call with media that the $2 million price falls within the upper bounds of ICER’s benefit ranges.
“Were committed to ensuring children have access to this product,” Novartis CEO Vas Narasimhan said.
Critics noted that the bulk of Zolgensma’s development was done by AveXis, which Novartis bought last year.
“The question in drug pricing isn’t how much is a life worth; it’s what makes a fair return on an investment in R&D and an accessible price,” said David Mitchell, president of Patients for Affordable Drugs, an advocacy group.
SMA is believed to affect about one in 10,000 people, though not all forms of it are fatal to children.
Novartis said in a statement that the $2.125 million price tag is half the current 10-year cost of Spinraza, the only other approved SMA treatment, estimated at $4.1 million, and half the cost of medicines for other rare pediatric diseases.
Biogen’s Spinraza was cleared by the FDA in 2016 and sold at a $750,000 list price in the first year, then $375,000 annually for regular infusions. Other countries have balked at the price, in some cases refusing to cover it. England’s National Health Service this month struck a deal with Biogen to cover the drug for a limited time at an undisclosed price to collect data.
Novartis executives said Friday that besides the five-year payment model, the company is exploring an outcomes-based contract with certain payers, doling out rebates to return some of the cost of the treatment if a patient dies or goes on a ventilator permanently.
But executives said certain laws that cover government health plans are constraining how creatively they can construct those deals. In particular, a law mandating that a drugmaker give Medicaid the lowest or “best” price it negotiates with payers limits the size of rebates in the outcomes-based plans.
“We’re continuing to work and advocate with the federal government to put in place relevant reforms or relevant interpretations of current guidances to enable us to use these novel models we’re talking bout here, either pay-over-time or outcomes-based payments,” Narasimhan said.