Spark Therapeutics Inc. (NASDAQ:ONCE) has finally released the price of its much-anticipated gene-therapy treatment for a rare form of genetic blindness and, while the price is lower than originally expected, it’s still a mighty steep one. The genetic treatment has been priced at $850,000 – that’s $425,000 per eye (better hope you only need it for one eye!).
Luxturna, the first gene therapy for an inherited disease in the US to be injected into each eye, was originally going to be priced at $1 million, but Spark decided against this in the end due to comments from health insurers about their concerns over being able to cover that amount – not that $850,000 is much more manageable. Lucky for patients, the brunt of this will go to insurers and not to the individual, but that’s still a pretty tough pill to swallow, especially if it results in insurance rate hikes for the patients.
This price is pretty ridiculous and a prime example of why drug pricing should be regulated in the US (which it currently isn’t, although it is in many other countries). There is often little explanation from the drug’s manufacturer about why it would need to cost that much, save for them claiming that it’s very expensive to develop and test the drugs. Spark backs up its price decision by saying that Luxturna is meant to be a lifelong solution, while many other drugs have to keep being renewed annually, meaning that ultimately they could end up costing you more. However, Spark has only monitored the results of Luxturna in patients for a maximum of four years, which isn’t exactly the same as a lifetime, so really, there’s no telling how long the effects of Luxturna will actually last.
Maybe if Spark focused its attention on developing a gene-therapy treatment for a disease less rare than the blindness Luxturna is supposed to treat, the company wouldn’t have to charge such an exuberant price. This particular genetic blindness only affects a few thousand people in the US, making the market for it rather niche. That means Spark would have to charge a higher amount if it wanted to turn a profit on the treatment as opposed to a treatment that more people might need.
This is not to say that what Spark has accomplished isn’t a great thing that’s going to help a lot of people, though. There’s no denying that this is a good thing and it could be the start of dozens of new gene-targeting advances in the next few years that will help thousands. Having said that, the price is still a bit hard to come to terms with.
The company did well in the stock market today despite the reservations about the treatment’s price. That fact that Spark came up with Luxturna successfully at all has drawn attention away from its expense. The stock closed at $55.76, putting it up $2.45, or 4.60%, from yesterday’s closing price of $53.31.
We’re just going to have to wait and see what impacts the price of Luxturna has on the drug manufacturer, as well as on health insurers.
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