From installments to invalid refunds, trapped in sky-high gene therapy

In just one month, the title of "most expensive innovative drug" in the world has changed hands twice, and the same company - Bluebird
has constantly broken the record.

On August 17, the US FDA announced the approval of Bluebird's gene therapy Zynteglo to be marketed to treat patients with
β-thalassemia.

Zynteglo is priced at $2.

However, the "medicine king" position has not yet sat hot, and the price of Zynteglo has been surpassed
by latecomers.

On September 16, Skysona, another gene therapy for Bluebird, was approved by the FDA to treat a rare neurological disorder, "cerebral adrenoleukodystrophy," priced at $3 million
.

Before Zynteglo and Skysona, the title of the world's most expensive drug, belonged to Novartis' Zolgensma, with a list price of $2.

It seems that "sky-high" is the exclusive adjective of gene therapy
.

The high price makes it difficult for gene therapy to have high accessibility
.

How to solve the payment problem?

/ 01/

The price cap is constantly being refreshed behind

The reason why gene therapy is expensive is also forced by helplessness
.

First, there is a limited group of
patients.

In the case of Zynteglo's thalassemia, the incidence is extremely rare
worldwide.

On August 24, BioMarin's approved gene therapy Roctavian also received market attention
.

BioMarine estimates that in more than 70 countries, including Europe, the Middle East and Africa, there are about 20,000 adult patient populations
.

Second, as with CAR-T therapy, gene therapy has a long and cumbersome
preparation cycle.

According to Bluebird, Zynteglo needs to extract cells from patients, genetically engineer them, and finally ship them out of the factory, which takes about 70-90 days
.

Niche populations, combined with cumbersome preparation cycles, are doomed to have gene therapy priced high to cover high R&D expenditures
.

High pricing will also be the choice of
domestic enterprises.
At present, a number of emerging players of gene therapy have also appeared in China, such as Boya Jiyin, Hesheng Gene, Newfords, Zhongyin Technology, etc.
, all of which are developing corresponding indications
.

But at the same time, one of the questions that gene therapy developers must think about is how to make high-priced gene therapy benefit more patients
.

/ 02 /

Trapped in sky-high gene therapy

In the process of commercialization, sky-high gene therapy has not been smooth
.

Glybera, the world's first approved AAV gene therapy, was launched in 2012 to treat lipoprotein lipase deficiency
.

But because its price was so high, it cost $1 million for a single treatment and the indications were rare, with only one patient receiving treatment after going on the market and eventually delisting in 2017
.

Bluebird's Zynteglo, which was approved for listing this time, has previously encountered similar difficulties
.
Prior to FDA approval, Zynteglo had taken the lead in getting approved for marketing in Europe
.

For patients with moderate to severe Mediterranean poverty, gene therapy is a new treatment option
.
Previously, they needed regular blood transfusions and iron treatment to maintain life, which was expensive and would cause some harm
to the human body.

Zynteglo uses an improved version of the β globin gene to be copied into the patient's own hematopoietic stem cells, allowing the human body to produce human hemoglobin normally, thereby eliminating or significantly reducing the need for
blood transfusion.

Isn't it tempting that a single treatment can make the disease once and for all? Many investment institutions also think
so.

Evaluate Pharma listed Zynteglo as one of the most valuable drug releases of the year in early 2019, with estimated sales of $1.
87 billion
in 2024.

But looking at Bluebird's 2021 earnings report, Zynteglo's sales are only $3.
7 million, which is less than
a fraction of the estimate.
The once-and-for-all drug doesn't sell well because of its high price
.

Bluebird sells for Zynteglo in Europe for as much as 1.
575 million euros
.
In the face of this high pricing, the German government is not willing to pay the full price, and the upper limit is "half price"
.

The price divergence made the deal a failure, and Bluebird decided to exit Europe
with Zynteglo and Skysona.

Priceless drugs and priceless life are eternal contradictions
.

/ 03 /

Will "invalid refunds" be the antidote?

Of course, in the face of payment problems, gene therapy companies are not sitting still, but are looking for solutions
.

Previously, installment payments were one
of the strategies chosen by gene therapy companies.
Novartis' Zynteglo can be paid
in 5-year installments.

However, this approach has limited
effectiveness.
On the one hand, the long-term effectiveness of gene therapy is unknown, so even installment payments are still difficult to dispel the concerns of some people;

On the other hand, the US health insurance company, the main market for innovative drugs in the world, does not support the payment method
of installment payment.
According to Bluebird, they weren't interested in
it at all.

Combined factors lead to that installment payments are not the optimal solution
for sky-high gene therapy.
In this context, the "pay based on therapeutic effect" model has quietly emerged
in the field of gene therapy.
This year, two approved gene therapies have adopted this payment method
.

Bluebird's $2.
8 million Zynteglo uses a "one-time full payment, if you can't cure it, you can refund it" model:

The paying party pays the full amount in one lump sum before the patient receives treatment; If the patient is still dependent on the blood transfusion within the next two years, an 80%
refund will be given.
According to Bluebird, this method is preferred by patients
.

BioMarin's approved gene therapy, Roctavian, has adopted a similar scheme
in Europe.

Before accepting Roctavian, BioMarin will make a 5-8 year agreement
with the payer.
During the agreed period, when the therapeutic effect disappears, the money
will be refunded in proportion to the remaining period of the agreement.

For example, the parties have set a 5-year period
.
If the patient has no effect in the first year, then a full refund will be made; If the patient relapses in the fourth year, a 20%
refund will be given.

It seems that "invalid refunds" are more attractive
than installment payments.
So, will this be the game-breaking way for gene therapy?