Bluebird’s $2.8 million gene therapy becomes the most expensive drug after US 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

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 disorder that requires regular blood transfusions, and the drugmaker priced it at a record $2.8 million.

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

The sickest patients, estimated to be up to 1,500 in the United States, require blood transfusions every two to five weeks.

The therapy, to be branded as Zynteglo, is expected to face some resistance from insurers because of its high price, analysts say.

Gene therapies typically come with a high price tag, as they are often curative and have faced hurdles to secure insurance coverage.

For example, Novartis ( NOVN.S ) was forced in 2019 to offer rebates and work out “performance-based” installment payments for its $2.1 million treatment, Zolgensma, after insurers balked at the drug’s price.

Bluebird has presented Zynteglo as a potential one-time treatment that could eliminate the need for transfusions, resulting in savings for patients in the long term.

The average cost of transfusions over a lifetime could be $6.4 million, Chief Operating Officer Tom Klima told Reuters before the approval. “We feel that the prices we are considering still provide significant value for patients.”

Bluebird has been in talks with insurance companies about a one-off payment.

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

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

Bluebird expects to begin the treatment process for patients in the fourth quarter. However, no revenue from the treatment is expected in 2022, as the treatment cycle will take an average of 70 to 90 days from initial cell collection to final transfusion.

Reporting by Mrinalika Roy in Bengaluru; Editing by Aditya Soni

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