'Affordable' blindness treatment will set you back only $850K

Jeannie Matthews
January 12, 2018

Due to the high amount of treatment of 425,000 Dollars per eye, Spark Therapeutics offers alternative ways of paying with insurers, including partial reimbursement if the patient's condition does not improve significantly or a payment of installments.

Small biotech firm Spark Therapeutics (ONCE - Free Report) recently announced a new gene therapy that is created to treat a rare, inherited retinal disease that can cause blindness.

Despite Spark's efforts to offer alternative payment options (while still bringing in a profit), patient groups are already up in arms about the cost of Luxturna. The condition affects between 1,000 and 2,000 people in the United States.

Gene therapy is not alone in commanding staggering sums, particularly when it comes to treatments for rare diseases.

Many experts predicted Luxturna (voretigene neparvovec-rzyl) would ring in at about $1 million because it's designed for a rare genetic disease and a small patient population.

To avoid putting hospitals in a fix over the "buy and bill" reimbursement model, which leaves them on the hook for the initial cost of the treatment, Spark is contracting directly with payers on the price, leaving the providers to charge for their end of the procedure.

In a phone interview with Bloomberg, Spark CEO Jeff Marrazzo said that "We believe that this price reflects not only the breakthrough, life-altering value of one-time Luxturna, but it will enable us to continue to invest and build on the revolutionary science that supports not only Luxturna but the rest of our pipeline". In this gene therapy named Luxturna, there is a 45-minute operation gets performed by the experts.

Spark Therapeutics, which makes Luxturna, says it has a plan.

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Another company making pricey treatments has a plan to offer rebates if patients don't get better.

Luxturna treats inherited retinal disease caused by defects in a gene known as RPE65, which tells cells to produce an enzyme critical for normal vision.

We're just going to have to wait and see what impacts the price of Luxturna has on the drug manufacturer, as well as on health insurers.

From the time that Jeff Marrazzo first started at the helm of upstart Spark Therapeutics about 5 years ago, he's been thinking about what the first gene therapy in the U.S. would cost. That idea would apply to government programs like Medicare and Medicaid, which provide health coverage to the poor and elderly.

But the company has laid groundwork for innovative ways to pay for the drug by securing deals with an insurance company, a pharmacy benefit manager and negotiating with the federal government. Having said that, the price is still a bit hard to come to terms with.

Marrazzo's not saying how much he's offering in rebates, but when I asked him why not a full refund for patients who don't respond adequately, he said that's not possible.

Luxturna is considered the first American medication to emerge from gene therapy, which consists of repairing a defective gene.

However, even though the cost is lower than the $1 million price tag that analysts were expecting, there remain concerns that the drug is overpriced.

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