Wednesday, January 16, 2019

Yes, Virginia, Medicare Would Pay $900,000 For Luxturna (Retinal Dystrophy)

Today, Dr. Gottleib at FDA had a major policy announcement about the coming boom in biotech drugs based on gene and cell therapies (here).  How much staff do we need to approve them all?  How much money do we need to pay for them all?

For its part, how is Medicare handling the pricing of these biologicals?   For two early CAR-T drugs, which are for inpatients, CMS arrived at a decision to classify them as "New Technology Add On Payments" - which means hospitals get paid about 50% of the added cost.  In round numbers, hospitals would buy a $400,000 drug and get extra $200,000 in payment, thus, on paper, losing $200,000 per patient (here, here, here.)

Less notice to gene therapy Luxturna, which has a cost of around $900,000 for two eyes.   You can scout out the CMS payment trail as below.

Luxturna Labeling and Dosage

Luxturna (voretigene neparvovec-rzyl) is a vector-delivered gene therapy approved by FDA in December 2017 to treat RPE65-driven retinal dystrophy (here).   FDA indications for use are here.  It's an ultra-orphan, with 2000 cases in the US.  In clinical trials, no patients were over 65, bt patients might get Medicare coverage below age 65 for legal blindness as a disability.

FDA labeling gives the dose as 1.5 x 10^11 vector genomes, per eye.  That 1.5 x 100 billion, or 150 billion, per eye.

CMS Coding and Pricing

OK.  CMS coded this as "voretigene neparvovec, 1 billion vector genome" as C9032 before December 31, 2018, and as J3398 beginning January 1, 2019.   (In May 2018, the manufacturer asked CMS to amend the text to "per treatment," but CMS left it at "per billion.")

Interestingly, I couldn't find J3398 in CMS average sales price tables for Q1-2019 (I was surprised since it's approved four quarters ago and it's injectable).  However, in the tables for pricing that accompany the CMS November 2018 final outpatient rule for CY2019, J3398 is listed as paid in Ambulatory Payment Category 9070, which pays exactly $2963.289.

Putting It All Together

So we're down to simple math.  150 units x $2963.289 = $444,493.35 per eye, or $888,986.70 for two eyes.  (Note that the copay would be about $178,000.)

For ocular drug injection CPT code 67028, the physician also gets $101.99 per eye.


I don't have a position on the pricing; just sharing the information. ICER, the health pricing think tank, has a page for its voretigene valuation (here, Reuters here).

As of January 16, 2019, the Medicare Coverage Database didn't list any LCDs or articles on correct coding or usage of J3398.  However, a draft LCD (Palmetto, DL37862) was proposed last fall, here and here.


J3398 is not on Q1-2019 injectable drug ASP tables.  Web source here.  Below, note that J3398 is missing.

New Code for 2019:

As of January 16, 2019, the Medicare Coverage Database didn't list any LCDs or articles on correct coding or usage of J3398.

Spark's One Year Share Price:  $50 to $90 to $50.

Nerd Note.

Normally, prices in the physician office are set by ASP (average sales price + 6%).  If I recall Medicare policy, when an ASP is not published by CMS (and I couldn't find it for J3398, for Q1, as described above), the MAC price in the office, the Part B price, is AWP until ASP is set.   But AWP could be 50% or 100% more than ASP.   Hmmm.