A landmark regulatory approval that brought the field of cell and gene therapy to the forefront of the pharmaceutical industry's attention. However, rapid progress has also brought significant challenges that cannot be ignored.

Zolgensma, approved to treat infantile spinal muscular atrophy, is a stunning advance against a disease whose most severe form can be fatal before age two. In clinical trials, nearly all infants who received the therapy survived, without needing permanent breathing support.

"The question is really how to pay for Zolgensma, not how to deny it," said Michael Sherman, chief medical officer of Harvard Pilgrim Health Care, in an interview with BioPharma Dive on the sidelines of the 2019 BIO conference in Philadelphia. Similar logic applies to Spark Therapeutics' Luxturna, a gene therapy approved in the U.S. in December 2017 to treat a rare form of blindness.

Novartis' Zolgensma and Spark's Luxturna are just the first products in a wave of experimental gene therapies expected to flood the market. The U.S. Food and Drug Administration (FDA) projects that by 2025, it will approve 10 to 20 cell and gene therapy products each year.

However, not all of these products are guaranteed to have the compelling efficacy of Luxturna and Zolgensma, which made it relatively easy for insurers to decide to cover them.

The next critical test for the gene therapy era is likely to emerge in hemophilia. Several companies are racing to bring hemophilia A candidate therapies to market, with BioMarin Pharmaceutical making the most progress.

"Hemophilia A will force the issue (with payers) to be resolved," said Sandy Macrae, CEO of Sangamo Therapeutics, which is developing a gene therapy to rival BioMarin's.

"If it's spinal muscular atrophy, that's just a few severely affected children," he said. "No one is going to block that treatment; they'll just make it accessible. But if it's hemophilia A, patients have alternative treatment options."

The payer's dilemma in adapting to a new era

Novartis priced Zolgensma at $2.1 million, making it the most expensive drug ever brought to market.

The Swiss pharmaceutical company plans to spread the cost over multi-year payment plans, a result of lengthy discussions with payers.

For example, New England-based Harvard Pilgrim Health Care began negotiating over Zolgensma more than a year before Novartis acquired the therapy's original developer, AveXis.

Even so, Sherman said the substance of the payment plans was not as significant as both sides had hoped, reflecting the limitations of the U.S. healthcare system in paying for these one-time treatments.

Medicaid's "best price" regulations, enacted 25 years ago, require state Medicaid agencies to receive statutory discounts, either at a fixed rate or, if higher, matching the discounts the manufacturer offers elsewhere. This has become a major obstacle to structuring outcomes-based or annuity-style payment agreements.

"I want to emphasize that the problem is not a lack of willingness on Novartis' part to engage," Sherman said. "The best price regulation is the biggest challenge."

"As someone trying to move this forward on the front lines," he added, "the Medicaid best price restriction is the biggest barrier to the innovative agreements that pharmaceutical companies and I both want to participate in."

Sherman said he has had similar discussions with other gene therapy developers, including BioMarin, Spark, Sarepta Therapeutics, and Bluebird bio, all based on the premise that this barrier can be removed.

In hemophilia, Sherman noted, existing treatments give insurers the ability to say "no," and uncertainty about the durability of gene therapy benefits makes outcomes-based agreements even more critical.

For example, BioMarin recently released three-year data showing that clotting factor expression levels appear to continue declining, although to levels considered "mild" hemophilia.

The rapid rise of gene therapy may also hit other limitations.

Most therapies currently in development use inactivated viral vectors, such as adeno-associated viruses or lentiviruses, to deliver corrective genes. Sangamo's CEO predicts these vectors may accumulate in the liver, potentially narrowing the range of diseases that are both easy to target and commercially attractive.

"I think in the next three to five years, gene therapy will mine all liver-centric liver diseases and truly saturate that field," Macrae said.

Peter Marks, director of the FDA's Center for Biologics Evaluation and Research (CBER), noted that gene therapy will face additional challenges in addressing diseases caused by multiple genes, rather than just the single-gene defects targeted by Luxturna and Zolgensma.

"For diseases where the pathophysiology is not well understood, the challenge with gene therapy is that it becomes a much larger and more costly development program," Marks said in an interview at the BIO conference. "You lose the advantage gene therapy usually brings—that if you're targeting a single-gene disease, you have a high probability of success."

To date, regulatory review of cell and gene therapies has largely focused on the so-called chemistry, manufacturing, and controls aspects—the details of how a therapy is produced. Less attention has been paid to the clinical question of how the therapy works, because single-gene defects lead to clearly identifiable loss of function.

This has made interpreting clinical results for the first gene therapies like Zolgensma fairly straightforward.

"How many 'floppy' babies who would have been on ventilators do you need to see walking around at age three?" Marks said. "You don't need a large number of those cases, nor complex statistics or patient-reported outcomes, because they return to normal. You go from extremely abnormal to normal."

More uncertain mechanisms of action will reintroduce the "biological" risks that accompany many current experimental drugs, which often rely on vague understanding of how they work.

"The concern is that you fall back into the traditional drug development model, where clinical data really matters, because you have to figure out 'does it actually work' and 'does it work long-term,'" Marks said.

Some biotech companies have already begun tackling those more challenging polygenic targets. Marks specifically cited Parkinson's disease as an example. Axovant and Voyager Therapeutics are both developing gene therapies for this neurodegenerative disease.

The CBER chief speculated that in 10 or 15 years, the gene therapy field might eventually look a lot like today's small molecule drug industry.

FDA maintains pace amid caution

Even as gene therapy companies move quickly, the CBER chief remains cautious about leading the agency too far in "taking a leap of faith with preclinical data."

Despite recent successes, gene therapy's history has also had its share of setbacks.

"We don't want another Jesse Gelsinger," Marks said, referring to the teenager who died in the U.S. in 1999 after receiving an experimental gene therapy. "We don't want to go backwards."

"The good news is that there's more understanding now, but if you look at what happened in some failed Phase 1 trials in Europe, it doesn't take much to make people really pull back," he added.

Still, caution is balanced with the FDA's interest in advancing gene therapy development, even when the treatment targets only a small number of patients.

Marks said regulators are considering new review approaches for so-called "bespoke" or extremely personalized therapies. Where there is a degree of similarity, the FDA is looking for ways to streamline regulation so that each tiny adjustment does not require a separate drug application.

"If you treat each one as an independent drug, people will never get these therapies, because you can't expect anyone to put in that kind of effort," he said. "Therefore, no commercial enterprise will ever make them."

"We want to stay forward-looking," Marks added, but "we don't want to act recklessly and create problems."