On Tuesday, the US Food and Drug Administration approved bluebird bio's gene therapy for patients with a rare disorder that requires regular blood transfusions, and the drugmaker priced it at a record US $2.8 million.
The approval sent the company's shares 8 per cent higher and was for the treatment of beta-thalassemia, which causes an oxygen shortage in the body and leads to liver and heart issues.
The sickest patients, estimated to be up to 1,500 in the United States, need blood transfusions every two to five weeks.
The therapy, to be branded as Zynteglo, is expected to face some resistance from insurers due to its steep price, analysts say.
Gene therapies have had hurdles in securing insurance coverage because they are often curative and have a high price tag.
In the year 2019, Novartis had to work out outcome-based instalments payments for its US $2.1 million therapy Zolgensma, because insurers balked at the drug's price.
Bluebird has pitched Zynteglo as a potential one-time treatment that could do away with the need for transfusions, resulting in savings for patients over the long term.
Chief operating officer Tom Klima told Reuters that the average cost of transfusions over the lifetime can be US $6.4 million. We feel that the prices we are considering still bring a significant value to patients. Bluebird is in talks with insurers about a one-time payment option.
Up to 80 per cent of the payment will be reimbursed if a patient does not achieve transfusion independence, they insurers are very excited about that, according to Klima.
The FDA warned of a potential risk of blood cancer with the treatment, but noted studies had no such cases.
Bluebird expects to start the treatment process in the fourth quarter. The treatment cycle would take an average of 70 to 90 days from initial cell collection to final transfusion, and there is no revenue forecast for the therapy in 2022.