US non-profit claims new Novartis gene therapy would be “cost effective up to $900,000”
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US non-profit claims new Novartis gene therapy would be “cost effective up to $900,000”

Spinal Muscular Atrophy (SMA) is a serious genetic disease that affects the parts of the nervous system controlling voluntary muscle movement. It’s rare, has a hugely debilitating affect on quality of life, and often leads to early death. However, pharmaceutical giant Novartis may have found an effective treatment for the condition. This treatment – an experimental gene therapy – could be priced at up-to $900,000 according to a US non-profit organisation that reviews the value of drugs and medical treatments.

Novartis’ share price has appreciated by 7% so far this year

27 02 Novartis

Source: Yahoo Finance

The group in question – the Institute for Clinical and Economic Review (ICER) – made this determination using a “commonly cited cost effectiveness threshold” valuing “each quality-adjusted life year” (QALY) at between $100,000 and $150,000.

Novartis, however, thinks the new therapy could be cost effective at prices as high as $5 million, because it claims that the correct QALY figure to use is $500,000. As such, it suggests the one-time treatment might be priced somewhere between $4 million and $5 million.

In a statement emailed out last Friday, Novartis wrote that “both the rare disease community and various governmental bodies” had confirmed that $500,000 per QALY “is the appropriate standard to protect vulnerable populations and allow access to innovative, transformational therapies.”

There is no doubt that SMA is a critical illness. It leads to paralysis, breathing difficulty, and is the leading genetic cause of death in infants. Novartis’ new gene therapy, Zolgensma, will use engineered viruses to transport healthy genetic material into patients’ cells, replacing faulty or mutated genes.

Disclosure

Dominion holds Novartis in its Global Trends Managed Fund.


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