Bluebird’s $2.8 million gene therapy becomes most expensive drug after U.S. approval

Signage is seen outside the Food and Drug Administration (FDA) headquarters in White Oak, Maryland, U.S., August 29, 2020. REUTERS/Andrew Kelly/File Photo

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Aug 17 (Reuters) – The U.S. Food and Drug Administration on Wednesday approved Bluebird Bio’s (BLUE.O) gene therapy for patients with a rare disease requiring regular blood transfusions, and the drugmaker has priced it at an all-time high of $2.8 million.

The approval sent the company’s shares up 8% and relates to the treatment of beta-thalassemia, which causes a shortage of oxygen in the body and often leads to liver and heart problems.

The sickest patients, estimated at 1,500 in the United States, need blood transfusions every two to five weeks.

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The therapy, which will be branded Zynteglo, is expected to face some resistance from insurers due to its high price, analysts said.

Gene therapies typically come at a high price because they are often curative and have encountered hurdles in obtaining insurance coverage.

For example, Novartis (NOVN.S) was forced in 2019 to offer discounts and establish “outcome-based” installment payments for its $2.1 million Zolgensma therapy after insurers balked at the price of the drug.

Bluebird pitched Zynteglo as a potential one-time treatment that could eliminate the need for transfusions, saving money for patients in the long run.

The average lifetime cost of transfusions may be $6.4 million, chief operating officer Tom Klima told Reuters ahead of the approval. “We believe that the prices we are considering still provide significant value to patients.”

Bluebird is in discussions with insurers about a single payment option.

“Potentially up to 80% of that payment will be refunded if a patient doesn’t achieve transfusion independence, they (insurers) are very excited about that,” Klima said.

The FDA warned of a potential blood cancer risk with the treatment, but noted that the studies had no such cases.

Bluebird expects to begin the process of treating patients in the fourth quarter. No revenue is expected from the therapy in 2022, however, as the treatment cycle would take an average of 70-90 days from initial cell collection to final transfusion.

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Reporting by Mrinalika Roy in Bengaluru; Editing by Aditya Soni

Our standards: The Thomson Reuters Trust Principles.

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