Shares of Novartis were climbing higher on Friday after the Food and Drug Administration (FDA) approved Novartis’ $2.1 million gene therapy Zolgensma.
Zolgensma is a one-time treatment for spinal muscular atrophy and is the world’s most expensive drug now.
Previously Novartis had said that the treatment could cost anywhere from $1.5 to $5 million but now says the cost is $2.1 million, or $425,000 a year spread out over five years.
The company said it’s “working closely with insurers to create 5-year agreements based on success of the treatment as well as other novel pay-over-time options.”
Novartis is in “advanced discussions” with more than 15 insurers on payment options.
“Zolgensma is a historic advance for the treatment of SMA and a landmark one-time gene therapy,” Novartis CEO Vas Narasimhan stated.
He added, “Our goal is to ensure broad patient access to this transformational medicine and to share value with the healthcare system.”
While many think the price tag is insane, Novartis said the one-time treatment costs half less than the 10-year cost of current chronic management of the disease.
“We believe by taking this responsible approach, we will help patients benefit from this transformative medical innovation and generate significant cost savings for the system over time,” said Narasimhan.
“Insurers were going to cover Zolgensma no matter the price, and Novartis has spoken publicly about considering prices that approached $5 million,” ICER President Steven Pearson said in a statement. “It is a positive outcome for patients and the entire health system that Novartis instead chose to price Zolgensma at a level that more fairly aligns with the benefits for these children and their families.”
Disclaimer: We have no position in Novartis AG (NYSE: NVS) and have not been compensated for this article.