Dr. William H. Carson President and CEO, Otsuka Pharmaceutical Development & Commercialization, Inc.
Jeff Marrazzo CEO and co-founder, Spark Therapeutics
The healthcare industry has undergone a technological revolution in the use of digital devices to communicate, provide apps, offer education to doctors and patients, make therapy more efficient, enhance adherence and much more.
But there’s another kind of tech revolution happening, and that’s in the development of the medications themselves. In digital health and gene therapy, miraculous advances are emerging that will further change the nature of healthcare.
This past May, at the Veeva Commercial and a Medical Summit in Philadelphia, in an interview with Veeva Co-founder and President Matt Wallach, two prominent CEOs outlined the recent breakthroughs their companies have had. Dr. William Carson of Otsuka Pharmaceutical Development & Commercialization, Inc. spoke about the very first digital therapy ever approved by the FDA, and Jeff Marrazzo of Spark Therapeutics gave some background on the first gene therapy ever approved by the FDA.
These advances will affect everyone in healthcare: patients, providers, payers and of course the manufacturers and marketers themselves.
As President and Chief Executive Officer of Otsuka, Dr. Carson has worked to establish new alliances, develop new compounds and introduce innovative ideas that secure approvals.
Abilify is Otsuka’s product approved for treatment of schizophrenia, manic episodes associated with bipolar disorder and as an add-on treatment for depression. Last November the FDA approved Abilify MyCite, which has a digital ingestion tracking system. A sensor embedded in the pill records when it was taken and sends that information to a digital patch, which transmits the data to a mobile app. Patients can allow caregivers and physicians access to this data, potentially improving compliance. The sensor and patch were developed by Proteus Digital Health.
Nonadherence is, of course, a growing concern, estimated at costing about $100 billion a year due to the need for additional treatment or hospitalization when patients don’t follow dosing advice.
Dr. Carson described the sensor as being “about the size of a grain of sand.” He said that a major challenge was how to start the process with the FDA. Both Abilify and the the Proteus product had independently been approved. But they were concerned that the FDA would ask for a major trial that would take five years. That didn’t happen. But the agency’s concern was whether the patients could use the system. “[It] comes in a box which is very similar to all of your tech things, and the FDA in these human factor usability studies, wanted to know could the patients themselves turn on the phone? Turn on the app? Put on the patch? All of the things that go with the system there. Especially their concern was around [patients who have] a mental illness and could they actually figure that out. It turns out in human factor studies that these patients are as capable as all patients and all of society in being able to do that. Once we went through that hurdle I think the path to approval really was much more about an understanding that digital medicine was upon us, and FDA really wanted to be very clear and very measured about moving ahead. “
Once the approval was granted, another issue was how to launch. Dr. Carson said “We didn’t want to move ahead with this full scale because part of the challenge is not understanding how payers, providers, patients, families and us as a company…would use the data? We brought in a whole group of bioethicists to help us address a lot of the issues that were happening around privacy, data, how it was going to be managed, and the most interesting concern that was raised with the bio-ethicists was the fact that doctors feel that they have data overload.”
He explained that they already have data on about 500 patients. “The data that we collect—positional data, urography, vital signs as well as measuring the ingestion— are continuous down to the minute. So, in those 500 patients we have more data collected than all of the clinical trials ever conducted by Otsuka. Think about what that might look like going forward. You could have in these systems lots of patients, maybe not 500 a day but 500 a week, 500 a month. Think of the data that would be generated. I have been calling it a data tsunami, because it is overwhelming and addresses the question that the bio-ethicists were describing around data. What it leads to is the concept or the need for data visualization, so you’re going to have to be able to make sure that the doctors get the information they need and that they’re able to take action on it.”
Of course, the patient has access to the data as well. Dr. Carson explained that they don’t have a way of interacting directly with patients or finding out what they want—what they’re looking at on their phone, what they’d like to know, who they want to share data with. Then the doctors and payers get access when the patients give permission. This, he explained, will help them learn quite a bit during the limited launch phase.
“The information to the company and to the payer is all anonymized, so we will be seeing group data anonymized. However, because of GDPR and privacy concerns, we have to be able to go in and pull out patients’ data if they request to opt out. So, you have to be able to take the data out completely and change the data set. Next month, they can opt back in. Part of the challenge is how do you manage the opting in, opting out data sets, those types of things?”
LUXTURNA AND GENE THERAPY
Jeff Marrazzo is CEO and cofounder of Spark Therapeutics, a late clinical-stage gene therapy company established in 2013 as a result of the technology and knowhow accumulated at Children’s Hospital of Philadelphia (CHOP). Initially focused on orphan diseases, they are working toward helping patients with conditions for whom no, or only palliative, therapies exist.
Jeff said that “the human genome project was this incredible breakthrough where frankly we learned the actual specific codes of what the blueprint is for biology of the human being. The question was could you actually turn that data into a medicine?
“Luxturna, which is our first approved gene therapy, the first of its kind in the United States, in essence took information about a particular gene that, when it’s defective in a patient, causes blindness. We put that information into a disarmed virus. We actually used the power of the virus to infect cells, but we used a disarmed version of the virus and one that’s not pathogenic, to basically drop that biological blueprint and information into the cells.”
The virus with the DNA inside of it infects the cells, which then have the machinery to make normal copies of a protein that otherwise was missing. “So, in fact what we’re doing is a one-time therapy that has the potential to have long-lasting, if not lifelong, effects.” The question, he said, is about transi-tioning from a 20th century policy about volume and fee-for-service to a world in which we are more about better health outcomes in patients “regardless of the amount of interventions that you have.”
He explained that there are about 200 different genes that can cause blindness as a result of your retina deteriorating. “Luxturna is indicated for one of those, so it tells you actually how far we still have left to go as a scientific community and medicine. There are no approved products of pharmacologic agents at all for any of those 200 types, so not only was Luxturna a big deal for people rooting for gene therapy as a technology, it was a big deal for an entire blinding community that was looking forward to any treatment that could help their disease.”
As with Abilfy, this is a patient population that, until recently, had been told there was nothing medical science could do for them, that they would eventually go blind. “What we saw in the 41 participants in our clinical program was that with a single dose of Luxturna we could restore functional vision in these patients in a way that they were now able to open up activities of daily living and do independently what they hadn’t done before. It’s incredibly exciting, and [what] patients and families say about what it means for them in the context of their schooling or their work life is really powerful to hear.”
Jeff discussed the commercial model for Luxturna, and how they determined to present the proposition to payers. The wholesale acquisition cost is $425,000 per eye, so the total is $850,000 per treatment. “That’s a one-time charge, but the treatment is indicated to be used [just] once, and the data that we have generated to date, including the latest data we’ve presented at the American Academy of Ophthalmology, suggests that that one dose at three years and counting is still showing a sustained effect, and we believe based on all the pre-clinical data that it has the chance to be long-lasting if not lifelong. That’s the value proposition…There are certainly a large number of orphan drugs that are on the market that cost quite a large amount of money per annum for the rest of a patient’s life.
“Instead of…trying to price in reference to what is an annual cost for existing type of modalities like enzyme replacement, we took a step back and said we’re really being asked to somehow evaluate what is the value of sight in a patient — what it was worth to a young child or a young adult to have an intervention that would enable them to have restoration of aspects of their functional vision for potentially the rest of their life. When you do the modeling, a pharma-economic modeling exercise, what we saw in evaluating it was that the worth of that was in excess of a million dollars, when you actually put together the cost of educating a blind child, the cost of loss in productivity for someone who has to care for a blind child.”
There was also independent data that helped them make the case. There have been more than 25 state court cases that have ruled on the cost of people losing their sight. These cases determined that on a compensatory basis plaintiffs should be awarded more than a million dollars on average for losing their sight in an acute event that was not their fault. That gave them a basis for what had been determined as the worth of someone’s sight.
“We felt that we were now entering a new age where we might be the first of what I hope is many different treatments that are one-time treatments that aspire to produce better health, not more healthcare. I think that’s an important distinction. Traditionally what we’ve done in 20th century medicine is to try to produce pills that people have to take on a reoccurring basis for the rest of their life in many instances. What we’re trying to move towards is these one-time treatments that introduce better health.
“We said why don’t we start to introduce a set of discussions with the payers, with policy makers about how we might go about doing that. So, in launching Luxturna we also introduced three unique payment and distribution models that haven’t been introduced before. One of them was a way in which we could actually reduce some of the costs related to the middle men and the middle parties that were involved with getting a drug from manufacture all the way to a patient. The first three patients we were treated with Luxturna in the first quarter of 2018, less than three months after we launched, which is a great accomplishment. Those first three patients were all treated under this direct payment model where we sold the product directly to the payer. We didn’t have middle men involved in the process. That’s one innovation.
“The second innovation was that we said we are going to stand behind our product and are offering outcomes-based rebates. So if the drug doesn’t work initially or is not sustained in its effect, we give rebates back for part of the cost of that therapy.
The third thing we’re doing is [talking to the] Centers for Medicare and Medicaid services where we are looking to actually take and decouple the intensity of service from the value and time in which it occurs. What we’re offering in that discussion is a way that that $850,000 could be paid in installments over time and your outperiod payments would actually be linked to continued effect or to outcomes. So, the idea is we pay for better outcomes, better health, not for more healthcare and we don’t pay for the intensity of the service. We pay for better health.”
Finally, there were considerations about the physicians. Spark estimated that there were about 1000-2000 people with this specific genetic subtype—a very rare condition. “Since Luxturna is delivered through a surgical procedure, we decided that we actually
wanted to have a model in which we use Centers of Excellence. So we actually have nine treatment centers geographically dispersed around the United States that are able to deliver the product.
“This is an under-diagnosed disease. So we’ve looked to a specific portion of the physician community, about 1800 ophthalmologists, to partner with in driving diagnosis. We’re offering a free genetic test to facilitate the genetic diagnosis of these patients. So those 1800 really are our partners, if you will, in the diagnostic process. Ultimately, they’re referring patients into one of these nine centers. You can only accomplish this with a very limited distribution, not just because it’s a rare disease but because it’s a onetime treatment.
“When it starts to open up, I think there are some really important questions about the supply chain generally for bio-pharmaceutical products. When you only have to deliver something one time to a patient you can organize a whole bunch of resources to frankly move that patient from one place in the country to another to get that right procedure done at the right place with the right expertise. It really starts to [answer] what are all the needs for those various different elements of the supply chain.”
Not only is the genetic test free, but patients may not even have a co-pay, depending on the payer they’re with.
“We are really pleased with these first three patients because we were able to provide this to them through what is this innovative and alternative contracting model where we are selling it directly to the payer. It’s not actually being sold to the hospital, so it’s not going through a traditional buy-and-bill. Our pact with the payer was we’ll only do that if you ensure that, one, the coverage is consistent with our FDA label; two, that you rapidly produce their prior authorization; and three, that you cap their out of pocket exposure as a patient to in-network maximums. Then the Affordable Care Act has some caps on what that is on an annual basis, and we have patient assistance programs along with travel and accommodation assistance programs that then help pick up, if not all the cost, the lion’s share of that cost for patients.”
Asked for final thoughts, Dr. Carson offered that, being at the beginning of digital medicine, we have to consider whether we are prepared for what comes next.
“In 2010 the CEO of Google shocked the audience by saying that every two days we gather as much data as was gathered from the beginning of time to 2003. Every two days. So, the question is, how much data and how fast is that now? That’s the challenge when we start moving into these spaces with each individual patient and how do we take all of that data and make sure that we can turn those insights into action.”
Jeff Marrazzo said that “We have a simple saying at Spark. We don’t follow footsteps, we create the path. That creation of the path begins in the lab but it does not end in the lab, and I would encourage all of you who are in roles that are not necessarily in the lab, that there is as much innovation that is required and needed to bring these types of new medicines to patients as there is the work that’s done at the bench. And that’s what we strive to do every day at Spark.”
This article was excerpted from the keynote at the annual Veeva Commercial & Medical Summit, which brings together leading life sciences professionals and experts to learn about innovations advancing the industry’s digital transformation. This year’s event drew nearly 1,500 attendees from the world’s most innovative companies, including Alkermes, Amgen, AstraZeneca, Insmed, Merck, Novo Nordisk, Otsuka, Roche, and Spark Therapeutics.