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The High Priced SMA Therapies Are Here. Now How Are People Going to Pay for Them?

Article In Brief

Clinicians and insurers alike are struggling to find strategies to cover the newly approved high-cost therapies for spinal muscular atrophy. In some models, companies are developing payment plans with patients, but how long and to what end remains to be addressed.

Emerging therapies for spinal muscular atrophy (SMA) are presenting new challenges for the hospitals and physicians that administer them and the insurers responsible for paying. The good news is that patients and their families have more choices; the bad news is there are no easy answers as to how anyone will be able to pay for them.

Nusinersen (Spinraza), an antisense oligonucleotide, was the first disease-modifying therapy to treat SMA when it was approved by the US Food & Drug Administration (FDA) in 2016. A gene therapy, onasemnogene abeparvovec (Zolgensma) was approved in May. Risdiplam, another competitor, is expected to be submitted for approval later this year.

Nusinersen is administered via lumbar puncture—four loading doses over 63 days and maintenance doses every four months thereafter—while onasemnogene abeparvovec requires a single intravenous administration. Risdiplam is an oral agent that modulates genetic expression in a way similar to nusinersen.

Each of the three therapies received the FDA's orphan drug designation, a special status authorized by the Orphan Drug Act, which provides incentives to encourage the development of drugs for rare diseases.

Despite those incentives, nusinersen and onasemnogene abeparvovec came onto the market as two of the most expensive drugs in US history.

“The Orphan Drug Act was well-intentioned, but no one asked, ‘When those first drugs come out, how are we going to pay for this?’” said Bruce H. Cohen, MD, FAAN, a pediatric neurologist and director of the NeuroDevelopmental Science Center at Akron's Children's Hospital. “Now we're at the point where we've got to answer that question.”

Nusinersen launched at a price of $750,000 for the first year and $375,000 for every year thereafter. The gene therapy costs $2.1 million for a single dose; its manufacturer, the Novartis subsidiary AveXis, makes the case that the therapy is actually less expensive than treating a patient with nusinersen for five years.

Clinical trial results show that both treatments do save lives; babies with type 1 SMA who would be expected to die before they reach age 2 are alive years later because of these therapies. Beyond that, how effective they will be in the long term and which patients will benefit are not yet known. Those on the forefront of offering these treatments shared the challenges that these treatments bring.

Which Patients Should be Treated?

The FDA approved nusinersen to treat children and adults with all types of SMA, although its approval was based on a clinical trial in patients with type 1 SMA—the most severe type of the disease—who were younger than 7 months old at the time of their first dose.

The AAN Evidence in Focus, published last November in Neurology, reported Class I evidence for nusinersen, for two scenarios: It found that in term infants with SMA and two copies of survival motor neuron 2 (SMN2)—associated with milder forms of the disease—nusinersen treatment started in infants younger than 7 months results in a better motor milestone response and higher rates of event-free survival than sham control. And in children aged 2 to 12 years whose SMA symptoms emerged after six months of age, nusinersen results in greater improvement in motor function at 15 months than sham control.

“Older patients with later-onset type III and type IV SMA may prove responsive to nusinersen as they carry more SMN2 copies, but the cost–benefit ratio is different in these populations,” according to the AAN evidence review.

The disconnect between the FDA label and the evidence available from clinical trials presents a challenge. “It's the pink elephant in the middle of the room,” Dr. Cohen said. “A lot of the insurance companies are arguing ‘show us the evidence that it works in the milder forms of SMA’ and it's hard to argue when they come up with that argument.”

David Michelson, MD, lead author of the AAN's evidence review, has several adult patients being treated with nusinersen. “Improvements on the Hammersmith Functional Motor Scale Expanded are few and far between but patients still report an overall benefit in endurance and quality of life,” said Dr. Michelson, a child neurologist at Loma Linda University Health. “They don't want to lose access even though they are amazed by what the drug costs.”

Meanwhile, the FDA approved onasemnogene abeparvovec for the treatment of children with SMA who are less than 2 years old. Approval was based on clinical trials involving patients with type 1 SMA who received treatment between the ages of about two weeks and eight months.

Because of the treatment's effectiveness in the patients in the trials, most insurers are committed to paying for it for patients that match those in the trials, regardless of the high cost, said Michael Sherman, MD, chief medical officer at Harvard Pilgrim, a leading insurer in Massachusetts. “But the label was broader than we expected to be so it isn't clear that all the payers will choose to cover it exactly to the FDA label,” he said.


“Were talking about a therapy without which children generally die by two years of age. So in my mind it would be unconscionable to deny access based upon the price, assuming that there is high quality evidence demonstrating efficacy.”—DR. MICHAEL SHERMAN

Indeed, some payers—Blue Cross and Blue Shield of North Carolina and Blue Cross of Idaho, for example—have written in their policy that the patient must be “less than 6 months of age at the time of infusion of onasemnogene abeparvovec-xioi.”

Access to Therapies

And then there is the issue of who provides access for patients—and how. Nusinersen is administered at dozens of academic medical centers, pediatric hospitals and clinics around the country. But it is not universally available. It is not available in Wyoming, for example, and a handful of other states.

Approximately 17 sites are prepared to provide onasemnogene abeparvovec, one of which is University of Rochester Medical Center (URMC) in New York.

Erin Collins, manager of high-cost drugs for URMC's neurology department, said two patients, including one born in another state, received the gene therapy at URMC through AveXis' expanded access program after the clinical trial ended but before FDA approval was received. Now that it is an approved therapy serving out-of-state patients becomes more complicated.

“There can be a coverage/reimbursement issue when you cross state lines if you have a Medicaid or a state-funded plan,” she said. “And even if you have private insurance, you have to consider the issue of being in-network or out-of-network.”

AveXis' OneGene Program offers a support team to help families of infants who may be eligible for its therapy; that includes working through insurance issues and coordinating financial assistance, Lovena Chaput, the company's vice president for managed markets and reimbursement, said in an email.

But the therapies pose a major financial risk for the hospitals and academic medical centers that provide them, Dr. Cohen said. The institutions must pay for drugs and hope that insurers will reimburse for them, an always-worrisome situation that is exacerbated when therapies are so expensive. Prior authorization from an insurance company does not guarantee payment. And SMA patients must be treated as soon as possible after diagnosis.

“And for some of our patients and their carriers, although we may get paid for the drug, we do not get paid to give the drug,” he said, referring specifically to nusinersen. “It's expensive to give this drug—it requires sedation and use of radiology to make sure the drug goes where it is supposed to go—that costs thousands of dollars per injection but it's considered an ‘uncovered procedure.’”

How Will Insurers Pay for These Therapies?

Insurers are generally willing to cover nusinersen for patients with type 1 SMA, although some require evidence that the patient's condition has not deteriorated to the point that permanent ventilator support is required, according to the AAN evidence review. Coverage is variable, for example, for patients with the milder forms of SMA, the review noted.

In the case of the gene therapy, onasemnogene abeparvovec-xioi—its extremely high price is less of a problem than figuring out the best way to pay that price. “We're talking about a therapy without which children generally die by two years of age,” Dr. Sherman said. “So in my mind it would be unconscionable to deny access based upon the price, assuming that there is high quality evidence demonstrating efficacy.”

That said, the high price—and the unknown long-term efficacy—are prompting insurers to explore new ways of paying. The New Drug Development Paradigms (NEWDIGS), a Massachusetts Institute of Technology-led collaborative that includes payers, drugmakers, provider organizations, and others, have been working on a payment approach that has three novel features:

  • Pay over time: Insurers will pay five installments over four years.
  • Pay for performance: If the treatment doesn't work for a patient—or if it stops working over time—the later installments will be reduced.
  • Mobility: Payers will agree to honor the pay-over-time arrangement if a patient moves from one insurer to another before the five installments have been paid.

A pilot program to test the payment approach has been delayed for technical reasons but AveXis is offering two of the features—pay-over-time and pay-for-performance—to “help ease possible short-term budget constraints, especially for states, small payers and self-insured employers.”

The fly in the ointment is the Centers for Medicare and Medicaid Services (CMS) so-called “best-price” regulation, which requires a manufacturer to give the Medicaid program a discount—in the case of the gene therapy, 17.1 percent-—or a rebate based on the lowest price that the manufacturer sold the drug to other payers during a given quarter.

Both the pay-over-time and pay-for-performance features of the NEWDIGS pilot are challenged by that regulation. Under the “best-price” rules, if AveXis accepted a deeply discounted price for an insurer's only SMA patient for whom the drug performed poorly, it could trigger that same deep discount for all Medicaid sales in the entire country.

Federal regulators recognize the problem—and are open to fixing it—but have yet to figure out how to do so under the current law, Sherman said. In January, a bipartisan bill—the Patient Affordability, Value and Efficiency Act—designed to fix the problem was introduced by US Senators Bill Cassidy and Mark Warner.

At a press conference when the gene therapy launched, AveXis President David Lennon was asked what milestones must be met for full payment to be required. “Our agreements are mainly based on outcomes of either death or permanent ventilation, depending on the payer and the agreements that we have struck,” he said.

NEWDIGS is hoping that its gene therapy pilot will eventually proceed, paving the way for other gene therapies that are in the pipeline.

In an editorial published July 2 in Nature Biotechnology, the authors pointed out what everyone in health care should be worried about: “With hundreds of gene therapies in the pipeline and an estimated 10-20 products reaching the market annually by 2025, solving the reimbursement riddle is urgent.”

The editorial considers the pay-for-performance/pay-over-time reimbursement concept to be a good idea, but the high-impact journal made this critique: “Gene therapies are broadly promoted as long-lasting cures but the emergent products are unconvincing on that account. In any business other than healthcare, these products would be viewed as prototypes.”

The gene therapy for SMA was cited as an example. At 20 months after treatment, three of the 12 patients in the trial were unable to sit unassisted for 10 seconds and only two were able to walk independently. “This is not a description of a cure but rather a treatment that may delay but does not obviate much of the care that people with SMA still need,” the editorial stated.

What If One Therapy Fails?

And then there is the question of trying another approach if one therapy fails. Can a patient treated with onasemnogene abeparvovec later be treated with nusinersen—or vice versa?

“I think parents will be asking for their children to receive both medications, especially the parents of pre-symptomatic infants identified by newborn screening who go on to show any symptoms, suggesting a less than complete response to whatever their first treatment is,” said Dr. Michelson.

In a June 18 webinar sponsored by AveXis, Perry Shieh, MD, PhD, associate professor of neurology and director of the neuromuscular program at Ronald Reagan UCLA Medical Center, said infants who had been treated with nusinersen were not eligible for the gene therapy clinical trials. Thus, the safety and efficacy of combining the treatments has not been studied.

Nonetheless, combination therapy is already in use. There are about 1,100 children under the age of 2 who have been diagnosed with SMA, thus meeting the FDA's criteria for onasemnogene abeparvovec, Lennon said, and some of those infants have potentially been treated with nusinersen.

In addition, AveXis has said that some patients in the onasemnogene abeparvovec trial subsequently received nusinersen, Dr. Sherman said, pointing out that those situations arose outside the control of the clinical trial. Insurers do not pay for therapies given in trials, so they would not have been aware that a patient had been treated with gene therapy when they authorized payment for nusinersen. Because the two treatments work in different ways—and neither promises a patient will have a normal developmental trajectory—some parents and physicians want to pursue both options.

“There are families who are inquiring about starting Zolgensma therapy and then stopping nusinersen once or if they get approved by insurance while there are other cases (in which) the family would like to start Zolgensma therapy but have seen results with nusinersen so they are hesitant to discontinue that treatment and would like to do combination therapy,” Collins, the URMC high-cost drug manager, said by email. “This is, of course, something that will be very challenging to get approved by insurers.”

The two therapies would cost $2.87 million to start plus the ongoing annual cost of $375,000 for nusinersen. AveXis has told payers there is no evidence to support using both therapies, Dr. Sherman said.

“Rationally, if we're going to spend more than $2 million on a gene therapy and there's no data showing that adding nusinersen does anything to improve the outcome, we're not going to be approving it,” he said.


Dr. Shieh reported fees for speaking for Alexion, Biogen, CSL Behring, and Grifols. He has received fees for consulting for AveXis and Sarepta. Dr. Michelson received royalty payments from UpToDate for an article on disorders of consciousness. Dr. Cohen received fees from Stealth Biotherapeutics for research support, travel, consultation, and speaking. He has received consulting fees from Modis Pharmaceuticals and research support from Reata Pharmaceuticals, Horizon Pharmaceuticals, and BioElectron Technologies.

Spinal Muscular Atrophy in Brief

SMA, the foremost genetic cause of death for infants, is caused by a mutation in the survival motor neuron gene 1 (SMN1) which, in a healthy person, produces a protein that affects muscle control. Affected individuals have varying copy numbers of survival motor neuron 2 gene (SMN2); a greater number of SMN2 copies correlates with a milder form of the disease.

There are about 500 new SMA cases per year, and Type 1 SMA accounts for about 60 percent of diagnosed cases. For those children, symptoms appear before they reach six months of age, and they lose motor function over time; patients typically die or require permanent ventilation by age 2.

Between 20 and 30 percent of patients with SMA have Type 2, which emerges between six and 18 months of age. These patients cannot walk independently, although most survive to adulthood if they have proper supportive care.

About 10 to 20 percent of patients with SMA have Type III, which may not appear until after 18 months. These patients have a normal life expectancy and can walk independently, although they may lose that ability over time. The least severe subtype—Type IV SMA—is very rare.

Link Up for More Information

• Michelson D, Ciafaloni E, Ashwal S, et al Evidence in focus: Nusinersen use in spinal muscular atrophy. Report of the Guideline Development, Dissemination, and Implementation Subcommittee of the American Academy of Neurology Neurology 2018;91:923–933.
• Editorial. Gene therapy's next installment Nat Biotechnol 2019;37(7):697.