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Specialty Product Launch Insights

20 September 2018

Lisa Henderson / Pharmaceutical Executive

At the Veeva Systems Commercial Summit, held in May in Philadelphia, Veeva President Matt Wallach interviewed two biopharma CEOs on stage about their strategies for recent first-in-class approvals. Dr. Bill Carson, president and CEO of Otsuka Pharmaceutical Development & Commercialization Inc., took his turn with Abilify MyCite, the first FDA-approved digital medicine. Jeff Marrazzo, CEO and co-founder of Spark Therapeutics, discussed Luxturna, the first-ever gene therapy cleared by the FDA.

FDA’s digital medicine foray

Abilify, an antipsychotic medicine, is in this case, coupled with an ingestible event marker (IEM) made by Proteus Digital Health. The monitor is as small as a grain of sand and embedded in an Abilify tablet. A person’s stomach acids cause a signal from the monitor to a device (smartphone), which then sends the information to the cloud.

Carson said it was very clear that at the FDA level, all of the groups understood the precedent that was being set. Many different agency divisions wanted to participate and understand what Otsuka was doing. Both the Proteus IEM and Abilify itself were already approved. However, their use together led, at first, to a complete response letter. Carson said, “Our concern actually was it would be a request for a 5,000-person trial that takes five years.” But what the FDA really wanted to know about was the patients.

Carson elaborated: “Would the patients that we were to treat, patients with bipolar disorder, major depressive disorder, and schizophrenia, use the system? The system comes in a box, packaging which is very similar to other tech products, and the FDA wanted human factor usability studies to ensure that patients could turn on the phone. Could they turn on the app? Put on the patch? All of the things that go with the system. Another concern was around having a mental illness and would that prevent them from using the system.”

According to Carson, human factor studies determined that these patients were capable to use the therapy. “Once we went through that hurdle, I think the path to approval was much more about an understanding that digital medicine was upon us, and FDA really wanted to be very clear and very measured about moving ahead,” he said.

Carson noted that Otsuka decided on a limited launch for Abilify MyCite. “We didn’t want to move ahead with a full-scale because of challenges with all the data that is collected and how it would be used—for payers, providers, patients, families, and us as a company,” he said. “Taking into account that the Abilify MyCite system has been used in 500 patients and collects positional data, vital signs, as well as measuring the ingestion, it is continuous data down to the minute. In those 500 patients, we have more data collected than in all of the clinical trials ever conducted by Otsuka.”

Since the patient is the one that initially gets the data, Carson explained the limitations. “We’ve never really had a specific way of interacting with patients directly and we didn’t initially know what the patients want,” he said. “Do they want to see the data on the phone? When do they want to see it? Who do they want to share it with? When they share it, what’s done with it?”

Carson says based on that limited launch phase, they will be able answer those questions and then be able to address the next stage in the roll-out to physicians, caregivers, or payers. But the Otsuka executive was clear about patient data: “When patients open the system, they opt in,” he said. “The information to the company and to the payer is all anonymized, so those parties will be seeing group data that is aggregated and anonymized. And because of GDPR and privacy concerns, we can pull out patients’ data if they request to opt out.”

Distribution and pricing

Luxturna is a gene therapy that works by putting replacement genetic information into a disarmed virus, for one of the 200 gene variants that cause blindness. That virus infects the cells with the blueprint, which cells, in turn, have the machinery to make normal copies of a protein that otherwise was missing.

This one-time therapy, says Marrazzo, has the potential to have long-lasting, if not lifelong effects. In 41 patients in the clinical program, a single dose of Luxturna restored functional vision in these patients—and in a way that they were now able to conduct activities of daily living independently. The latest data, presented at the American Academy of Ophthalmology, suggests that one dose at three years and counting is still showing a sustained effect.

The genetic code is delivered through a surgical procedure, so Spark decided the distribution model for Luxturna would use centers of excellence. Marrazzaro said, “We have nine treatment centers geographically dispersed around the United States that are able to deliver the product and through which we would distribute to them. Outside of the centers, there are 1,800 additional retinal surgeons, which, as a group, are who we ultimately are trying to engage to ensure early diagnosis. This is a disease that, by and large, is under-diagnosed because there hasn’t really been a need to do a confirmatory genetic test when there’s nothing available for these patients.”

By viewing them as partners in driving diagnosis, who will refer to those nine centers of excellence, Spark is offering free genetic test to facilitate the diagnosis of these patients. Marrazzo elaborated: “We can only accomplish this with a very limited distribution, not just because it’s a rare disease but because it’s a one-time treatment.”

That aspect, Marrazzo says, opens up some “really important questions about the general supply chain for biopharmaceutical products.” Specifically, Marrazzo said, that when a treatment is delivered just one time, resources are gathered to move the patient from one place to another—to get that right procedure done at the right place with the right expertise. “It frankly puts into question, what are all the needs for those various different elements of the supply chain?”

In regard to costs, Marrazzo said, “Our system is largely set up for volume and paying for volume, not necessarily paying for outcomes and paying for better health. We said, why don’t we start to introduce a set of discussions with the payers, with policymakers about how we might go about doing that.”

The wholesale acquisition cost of Luxturna is $425,000 per eye, or a per-patient basis cost of $850,000. While other orphan drugs on the market may cost a significant amount per annum for the rest of a patient’s life, Spark made the decision not use reference pricing to what is an annual cost on an existing therapy. Rather, the company took the direction of what the treatment was worth to a young child or a young adult to have an intervention that would enable them to have restoration of aspects of their functional vision for potentially the rest of their lives.

“When you do that pharma-economic modeling exercise, what we saw in evaluating it was that the worth of that was in excess of a million dollars,” said  Marrazzo. “When you actually put together the cost of educating a blind child, the cost of loss in productivity for someone who has to care for a blind child, or productivity losses in terms of themselves. That’s what it amounts to—and this was a great set of out-of-the-box thinking by our commercial team.”

Spark determined that others who have thought of these economic models are lawyers; judges in existing settlements on a civil compensatory basis were awarding plaintiffs with more than $1 million on average for losing their sight in an acute event that was not their own fault.

In launching Luxturna, Spark introduced three payment and distribution models:

  1. Direct payment. This is when the product is sold directly to the payer. It reduces costs related to middle parties that are involved with getting a drug from manufacture to patient.
  2. Outcomes-based rebates. If the drug doesn’t work initially or is not sustained in its effect, Spark will provide rebates back for part of the cost of the therapy.
  3. Discussions with Medicare and Medicaid services. Where the intensity of service with the value and time are decoupled. It’s a way that the $850,000 price tag could be paid in installments over time, and payments would actually be linked to continued effect or outcomes.

While the specialty pharma industry continues to innovate with companies like Spark and Otsuka developing breakthrough treatments and even cures, these forays into uncharted territory come with similarly unfamiliar challenges. According to Veeva’s Wallach, “The commercial model is rapidly evolving so the business can better keep pace with the science. Digital medicine and gene therapy are changing the nature of patient treatment—and how the industry proves the value of these complex products. As scientific innovation continues to accelerate, companies will need to use data and digital technologies to create new engagement strategies that span providers, payers, and patients.”

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