Pricing Zolgensma - the world's most expensive drug.

Abstract

A heated discussion has recently broken out in Europe about the price of Zolgensma, ‘the most expensive drug ever’. The National Institute for Health and Care Excellence (NICE) approved Zolgensma in March this year, which is set to become the most expensive treatment ever approved by NICE. Zolgensma is a gene therapy medicine for treating spinal muscular atrophy (SMA), a serious and rare condition of the nerves that causes muscle wasting and weakness [1]. It is estimated that the drug will cost approximately €1.9 million per course of treatment [2]. Patients with SMA have a defect in a gene known as SMN1, which the body needs to make a protein essential for the normal functioning of nerves that control muscle movements. Zolgensma is a gene therapy containing a functional copy of this gene which, after injection, passes into the nerves from where it provides the correct gene to make enough of the protein and, thereby, restore nerve function [1]. At first impression, the price level of Zolgensma raises many understandable questions, because €1.9 million sounds exorbitantly high in the public domain (often driven by emotions and lack of specialised knowledge of the costs and risk of the development of a new pharmaceutical). However, there are many factors that may justify NICE’s decision to approve the intervention for use. In the Netherlands, since the debate in 2013 about the high price of medicines for Fabry and Pompe diseases, ‘expensive’ medicines are increasingly only reimbursed after tough price negotiations with the Ministry of Health [3]. This usually concerns medicines for the treatment of rare diseases, the so-called ‘orphan drugs’ such as Zolgensma. For example, it is estimated that only one in 11,000 children is born with SMA [4]. These price negotiations have since become a permanent and important part of the market access process for new ‘expensive’ orphan drugs, where expenditure weighed against patient suffering, a difficult and ethically difficult task for all parties [3]. The current choice for ‘expensive’ medicines is based on clinical and economic criteria, whereby in The Netherlands the Ministry of Health is willing to pay a maximum of €80,000 for each extra life year gained with perfect quality of life, the so-called qualityadjusted life year” (QALY). It often concerns orphan drugs which, due to their high price, have a ‘cost per QALY’ that is much higher than the Dutch threshold value of €80,000. However, the price per patient for an orphan drug is often much higher, because the fixed research and development (R&D) costs, which are not much different than the R&D costs for non-orphan drugs, are recouped on far fewer patients. For example, the reimbursement of Spinraza, the first effective drug for SMA, was also initially denied due to an excessively high ‘cost per QALY’ of €600,000. Finally, Spinraza became available for Dutch SMA patients in 2018 after much delay due to lengthy price negotiations resulting in a heavily enforced price discount. In contrast to the current assessment of the drug price based on the ‘cost per QALY’, we also take the investor’s perspective into account. A price, whereby the ‘cost per QALY’ remains below the Dutch upper threshold of €80,000, reflects what the Dutch society wants to pay for the health benefits through new health-care treatments. However, clinical research requires significant investments and, therefore, there is an investor who deserves a financial reward for the capital that he has made available for the development of the new drug according to economic valuation theory. Investing in pharmaceuticals and biotech companies is very risky, as only one in 20 drugs eventually hits the market. In addition, the investor’s patience is being tested, as it takes an average of eight to ten years before the drug can be sold, while some €660 million has already been spent on clinical research [5]. For Spinraza, the Ministry of Health demanded a discount of 85%, which meant a price drop from €240,000 to just