PriceWatch: ICER Analysis Reveals Novartis SMA Gene Therapy Cost Effective up to $900K!

Gene Therapy

Physicians Weekly reported on the Novartis $4 million drug. The Swiss-drug maker has noted it will negotiate the price with payers but have posited that its’ experimental spinal muscular atrophy (SMA) therapy would be cost effective at $4 million to $5 million as a one-time treatment.

What is SMA?

SMA is a rare neuromuscular disorder characterized by loss of lower motor neurons and progressive muscle wasting, often leading to early death.

The disorder is caused by a genetic defect in the SMN1 gene, which encodes SMN, a protein widely expressed in all eukaryotic cells (that is, cells with nuclei, including human cells) and necessary for survival of motor neurons. Lower levels of the protein results in loss of function of neuronal cells in the anterior horn of the spinal cord and subsequent system-wide atrophy of skeletal muscles.

What is Quality Adjusted Year and How does it Relate to Cost-Effectiveness?

Quality Adjusted Life Year (QALY) is a generic measure of disease burden, including both the quality and the quantity of life lived. It is used in economic evaluation to assess the value for money of medical interventions. One QALY equates to one year in perfect health. If an individual’s health is below this maximum, QALYs are accrued at a rate of less than 1 per year. To be dead is associated with 0 QALYs. QALYs can be used to inform personal decisions, to evaluate programs, and to set priorities for future programs.

The QALY is a measure of the value of health outcomes. It assumes that health is a function of length of life and quality of life and combines these values into a single index number. To determine QALYs, one multiplies the utility value associated with a given state of health by the years lived in that state. A year of life lived in perfect health is worth 1 QALY (1 year of life × 1 Utility value). A year of life lived in a state of less than perfect health is worth less than 1 QALY; for example, 1 year of life lived in a situation with utility 0.5 (e.g. bedridden, 1 year × 0.5 Utility) is assigned 0.5 QALYs. Similarly, half a year lived in perfect health is equivalent to 0.5 QALYs (0.5 years × 1 Utility). Death is assigned a value of 0 QALYs, and in some circumstances it is possible to accrue negative QALYs to reflect health states deemed “worse than dead.”

What is the Institute for Clinical and Economic Review (ICER)?

TrialSite News has release several articles including ICER.  A Boston-based nonprofit, it seeks to improve healthcare value by providing comprehensive clinical and cost-effectiveness analysis of treatments, tests and procedures. After 2016 ICER broadened its quality-adjusted life year threshold to $50,000-$150,000.  Big pharma has been critical of ICER.

What is ICER’s Cost Effectiveness number for Novartis’ SMA treatment?

ICER calculates the experimental new gene therapy would be worth up to $900,000

What does Novartis’ Analysis of the Cost Effectiveness?

Novartis has targeted between $4 million to $5 million cost-effectiveness number