(Corrects paragraph 22 to show ICER conducted 11 assessments in 2018, not reviewed 11 treatments)
* At $4-5 mln, SMA treatment would be one of industry's costliest
* Biogen's drug was first, Novartis touts a cure
* U.S. price watchdog analyzing SMA drugs for value
* Express Scripts initially baulks at lofty expectation
By John Miller
ZURICH, Nov 23 (Reuters) - Just weeks after Novartis floated the idea that $4-5 million was fair value for its new gene therapy against a deadly neuromuscular disease, a major benefits manager is pushing back.
The Swiss drugmaker's assessment of AVXS-101's value for treating spinal muscular atrophy (SMA) has put the company front-and-centre in the debate over what "super drugs", for rare diseases afflicting relatively few patients, are really worth.
Among the first to react was pharmacy benefits manager Express Scripts, which helps U.S. employers manage workers' prescription costs.
Its chief medical officer, Steve Miller, told Reuters he "loves the science" behind Novartis's therapy, a potential cure for newborns who are diagnosed early.
But $4 million or more per patient?
"You just can't keep pushing these price points up," Miller said. "I just don't think we can allow it. It is not sustainable over time."
Novartis, which bought U.S.-based AveXis for $8.7 billion in April to add the SMA therapy to its portfolio, is still mulling its asking price as it awaits U.S. Food and Drug Administration approval, likely in early 2019.
But the company has begun its campaign to convince insurance groups and governments to cover AVXS-101, contending the one-and-done infusion will save society money over the long haul, even with a cost near the highest ever for a one-time therapy.
There's now only one approved drug for SMA, Biogen's two-year-old Spinraza, and it is listed at $750,000 for the first year and $350,000 thereafter. Spinraza is not a cure and must be taken indefinitely.
"When we look at 10-year costs, you see somewhere between $2.5 million to $5 million being spent by societies to care for these types of patients," Dave Lennon, AveXis's president, said.
"Four million dollars is a significant amount of money, but we believe this is a cost-effective point."
Though newborns may stand to benefit the most from AVXS-101, depending on the durability of its effect, the therapy is also being tested in older SMA patients with more advanced disease in hopes it will improve their symptoms, too.
A CHILD'S LIFE
A diagnosis of SMA, which affects one in 10,000 live births, is devastating. Forty percent of victims have the severest form and historically die within months.
Children with less severe SMA can live to adulthood, although with profound physical disabilities. Though cognitively normal, many cannot feed themselves and require 24-hour care, wheelchairs and machines to help them breathe and cough.
Janice Kress, a Pennsylvania woman, lost her grandson to the disease at 5 months.
Today she volunteers for SMA charity events and knows families who have fought their U.S. insurers for access to Biogen's Spinraza, as payers seek to rein in costs using eligibility criteria like age or when symptoms began.
"A child's life -- how can you say no?" Kress said.
As Novartis prepares to launch AVXS-101, it also hopes for tacit endorsement of its pricing strategy from the non-profit Institute for Clinical and Economic Review (ICER), which is currently reviewing the cost-effectiveness of SMA therapies.
The Boston-based non-profit, established in 2006, carries out cost-benefit analyses on drugs that it calls independent of "Big Pharma", insurers and government.
Unlike European price regulators, ICER cannot dictate costs.
But it has steadily gained influence in the U.S. pricing debate, as companies like Express Scripts and CVS Caremark and governments rely on its analyses.
ICER has conducted 11 assessments in 2018, some covering multiple drugs.
In seven of the reviews, it concluded drugs' prices aligned with their benefits, like when it said Roche's $482,000 hemophilia medicine Hemlibra could save the U.S. system up to $1.9 million for the hardest-to-treat patients.
Four times, however, ICER concluded drugmakers were asking too much, giving payers ammunition to bargain them down.
For instance, the New York Department of Health told Reuters that ICER's finding that a $270,000-per-year cystic fibrosis drug from Vertex Pharmaceuticals represented "low long-term value" helped underpin the state's demand for a steep discount.
JUST ONE FINGER
Novartis and Biogen, as well as Switzerland's Roche, which also has an SMA drug in development, are all lobbying ICER to broaden what it considers a meaningful benefit, potentially helping their therapies fare well in the group's review.
The ability to move one finger might not seem like much, but Biogen told ICER such a measure should be considered, since it might allow somebody with SMA to steer an electric wheelchair and maintain a level of independence.
"We recently spoke with a young man who is...now losing ability and power in his fingers," said Sangeeta Jethwa, Roche's head of patient partnerships, told Reuters.
"He wants to be able to go out with his friends and open his own bottle of drink. That for him is fantastically meaningful."
For its SMA review, ICER aims to quantify factors like quality of life, direct medical costs and how patient and caregiver productivity losses may burden society.
A head-to-head comparison of Spinraza's and AVXS-101's financial impacts over time is also planned before ICER issues its final report in March.
ICER spokesman David Whitrap said ICER's review takes eight months so it can "rigorously evaluate all of the available evidence."
The stakes are high for Biogen, after Britain's healthcare cost agency, the National Institute for Health and Care Excellence, has concluded Spinraza was too expensive to be cost-effective.
Though Spinraza, whose nine-month 2018 sales hit $1.25 billion, is available in the United States and elsewhere in Europe, Biogen wants to avoid a negative ICER assessment that gives payers more leverage to demand rebates. "We are confident in the evidence supporting the value it provides," a Biogen spokeswoman said.
SIGNS OF PROGRESS
Treatments for rare diseases like SMA are increasingly popular among drugmakers, because they command high prices while insurers are hard pressed to reject claims, especially for sick children.
Sales of rare disease therapies will rise 11 percent annually, nearly twice the overall market rate, through 2024, when they'll hit $262 billion, consultancy Evaluate Pharma has forecast.
Novartis Chief Executive Vas Narasimhan, with ambitions of treating hundreds of SMA patients annually, highlights 90 kids in AVXS-101 trials over four years, including some who would otherwise have been incapacitated and fed through tubes.
"With AVXS-101... patients are alive and thriving," Narasimhan said.
There were no SMA therapies, however, when Victoria Gusset, an eight-year-old Swiss girl with a shy smile and love for horses, was diagnosed as a toddler after failing to stand independently.
Today, Victoria is in a trial testing how Spinraza may improve muscle control or halt its decline in older children.
Every four months, Victoria and her mother, Nicole Gusset, load her electric wheelchair into their van and drive two hours from their home near Bern to a German hospital for a spinal infusion.
Victoria looks forward to each trip, though she sometimes suffers from nausea and headaches following treatment.
"I get to go shopping with mum," she said.
After her daughter's diagnosis, Nicole Gusset founded an SMA patient organisation and has been lobbying the Swiss government to expand access to Spinraza. Children under 20 have coverage, but most insurers refuse to pay for adults.
Gusset said Novartis's $4 million announcement sent shockwaves through Switzerland's SMA community, heightening fears that escalating costs will keep new treatments out of reach for some who might benefit.
"The best therapies are useless if patients cannot get them," she said. ($1 = 0.9988 Swiss francs) (Reporting by John Miller in Zurich, Deena Beasley in Los Angeles and Caroline Humer in New York; Editing by Mike Collett-White)