Massachusetts Proposes Installment Plan to Cover Cost of Gene Therapy for Spinal Muscular Atrophy

Spinal muscular atrophy (SMA) is a genetic condition which affects between 10,000 and 25,000 in the United States. While rare, it is currently the leading genetic cause of infant mortality.

But, a new gene therapy may be coming to the market for SMA in May, pending FDA approval. The therapy would finally provide this patient population a therapeutic option. Gene therapy works to combat the root cause of a disease, and researchers believe it has curable potential. Unfortunately, because of the confidence the scientific community has in this new type of treatment, they’ve hung an exorbitant price tag on it.

“If you believe these (gene therapies) are likely to be life-changing to the people who need them, then we shouldn’t let cost get in the way,”

The Therapy

The gene therapy is called Zolgensma and it was created by Novartis. The company believes that for newborns with SMA, the treatment could be life-altering.

We probably won’t see an official price released by Novartis until their therapy is approved. However, the prediction is that this therapy will cost 5 million dollars per patient. They believe this price is warranted as it is comparable to the cost of five years worth of other treatments currently used for the disease. As the gene therapy would be a one-time treatment, researchers think this cost is fitting for its curative potential.

A Proposal from Massachusetts

In Massachusetts, it’s estimated that only 12-24 individuals have SMA. However, that hasn’t stopped the state from working to prepare a solution for this predicted problem. Since it affects such few individuals, insurance companies haven’t been terribly concerned about the cost. But, that said, if they didn’t have to pay it all at once, the situation would be much more comfortable for them.

“What they’re not saying is, ‘We’re worried about the price.’ What they are saying is, ‘We may have concerns about staging payments.'”

The NEWDIGS program at the MIT Center for Biomedical Innovation has come up with a unique plan which would ensure patients would have access to this new therapy. NEWDIGS works to uncover new ways to fund treatments through a collaborative effort with numerous organizations.

Their plan is simple- the gene therapy treatment for SMA would be paid by insurance agencies through an installment plan lasting 4 years. There would be a total of five installments. Installment plans are used for a variety of products- from cars to houses, but as of yet, it hasn’t really been used in the medical field.

A key factor of this plan is that payment is dependent on whether or not the treatment is effective for the patient.

Potential Complications

One thing this plan must still evaluate is what would happen if a patient moves states. That said, they have already addressed what would happen if the patient switches insurance while receiving the therapy. Thankfully, insurers who have agreed to participate in the program have stated that they would pay for the remaining cost of treatment for these individuals.

Another challenge to this proposal is that each health plan would have to negotiate its own price for the therapy. But regardless, the installment plan structure would remain the same across all insurance companies.

One more potential issue with this plan has to do with Medicaid. If the treatment doesn’t work for a patient and the insurance company has only paid one installment, Medicaid could interpret the therapy as violating the “best price” guarantee that the program offers.

But ultimately, this proposal has a lot of potential. If it is successful, NEWDIGS is hopeful that the plan could become a model for other states. They also hope to expand the plan for more diseases that just SMA.

You can read more about Massachusetts plan here.

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