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According to the Institute for Clinical and Economic Review (ICER), an independent nonprofit organization that reviews the value of drugs and medical treatments, an experimental gene therapy for spinal muscular atrophy (SMA) developed by Novartis would be worth up to $900,000, Reuters reports.

ICER makes this kind of determination using a cost-effectiveness threshold that values each quality-adjusted life year, or QALY, gained at $100,000 to $150,000. This metric is commonly used when determining the value of such experimental medications, Reuters says. 

If each QALY gained were assessed at $500,000, then the gene therapy, called Zolgensma, would be cost effective at just over $5 million, ICER said. Novartis has previously said that it will negotiate the price of the drug with various insurance companies, but it believes Zolgensma would be cost effective at $4 million to $5 million as a one-time treatment.

In an emailed statement, Novartis tells Reuters that "both the rare disease community and various governmental bodies" suggest that $500,000 per QALY "is the appropriate standard to protect vulnerable populations and allow access to innovative, transformational therapies."

Using an alternate measure known as "life years gained" (LYG) ICER found Zolgensma cost effective at a price as high as $1.5 million, Reuters adds.

ICER also found that Biogen's SMA treatment Spinraza would require a substantial price decrease to be considered cost effective, Reuters reports. Spinraza's current list price is $750,000 for the first year and $375,000 per year after that. Spinraza was approved in 2016 to treat SMA in children and adults.

According to ICER, Spinraza, when used for patients who do not yet show symptoms, would have value at up to $130,000 for the first year and $65,000 for each successive year. Based on LYG, the price could be as high as $82,000 during the initial year and $41,000 per year after that. At the QALY value of $500,000, Spinraza was seen by ICER as cost-effective at $264,000 per year.

Biogen noted that Zolgensma is experimental and has reported data for only 15 patients, compared with Spinraza's record of use by more than 6,600 patients. The FDA is expected to decide whether to approve Zolgensma sometime in May, Reuters says.