Makers of million-dollar drugs lobby for new drug payment system

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A new gene therapy designed to treat an often-fatal muscle disorder hit the market in May. There is just one problem: With a listed price of more than $2 million, it is the most expensive drug ever.

That is why a few pharmaceutical companies have taken to Washington to lobby for new pricing mechanisms to accommodate unusual gene therapy treatments for rare diseases. The activity on K Street comes as Congress continues to debate how to lower prescription drug prices. But drug manufacturers are also focused on ensuring that someone will pay for the prescription — no matter the cost.

In May, the FDA approved Zolgensma, a gene replacement treatment developed by the Swiss company Novartis that is used to treat spinal muscular atrophy in children under the age of two. The drug’s list price sits at $2.1 million, making it by far the most expensive single-dose treatment of all time.

Spinal muscular atrophy is a genetic disorder that affects one in every 8,000 to 10,000 people, according to the National Institutes of Health. Children living with the disease have weak muscles, and many born with its most severe form do not live past the age of two. Zolgensma, unlike previous drugs, is administered as a one-time treatment, where patients receive a missing gene through a single infusion.

Another emerging gene therapy is Zynteglo, a treatment developed by Bluebird Bio for the rare blood disorder beta thalassemia. The Massachusetts company announced in June that the treatment, which recently received conditional approval in Europe, will be listed at a price of nearly $1.8 million. It expects Zynteglo to be approved by the FDA for use in the U.S. sometime next year.

Sky-high drug prices are often a source of public outrage, and even pharmaceutical companies  recognize that most Americans cannot easily pay for a million-dollar treatment. For that reason, drug manufacturers including Bluebird and Novartis are trying to convince insurance companies and the federal government that their treatments are worth the cost.

Novartis has spent $3.3 million to lobby on issues including gene therapy and pricing this year. Bluebird has spent comparatively little — only $70,000 during the first quarter — but has several lobbyists working on the issue of gene therapy, including one registered to work exclusively on “alternative payment methods” for “novel therapies.”

One alternative method proposed by drug manufacturers is breaking down the payments over time. Novartis has offered insurers the opportunity to pay for Zolgensma via a five-year installment plan at a cost of $425,000 per year. Although some private insurers might be willing to pay for the treatment over five years, current rules do not allow public insurers, such as Medicare and Medicaid, to pay in installments.

Both Novartis and Bluebird reported lobbying the Centers for Medicare and Medicaid Services this year. In February, the Centers proposed covering a cancer therapy that relies on the Novartis-developed drug Kymriah, which was approved by the FDA in 2017. A final decision on the issue is still forthcoming.

Together, Medicare and Medicaid provide health care coverage to more than a third of the U.S. population.

Drug companies have long been the biggest lobbying spender in Washington. The pharmaceutical and health products industry has already spent $86.5 million on lobbying in 2019. Lobbying on gene therapy makes up a small but growing portion of that total. Nearly a dozen groups — including several companies that did not exist a decade ago — lobbied the federal government on pricing of gene therapies in the first quarter of this year.

While Novartis has put its $2.1 million drug on the market, other gene therapies are in clinical trial stages. Bluebird is also testing Zynteglo for use by patients with sickle cell disease, the most common blood disorder in the U.S., while ​Spark Therapeutics, which has already put out a gene therapy that treats a certain form of blindness, is working on a treatment for hemophilia.

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