Swiss drugmaker Novartis has won US approval for its gene therapy Zolgensma for spinal muscular atrophy (SMA) and has priced the one-time treatment at a record US$2.125 million (NZ$3.24m).
SMA is the leading genetic cause of death in infants.
The Food and Drug Administration (FDA) approved Zolgensma for paediatric patients under age the age of two with SMA, including those not yet showing symptoms.
The approval covers babies with the deadliest Type 1 form of SMA, as well as those with forms of the inherited disease where debilitating symptoms may set in later.
Novartis executives defended the price, saying that as a one-time treatment it would ultimately save patients who would have instead been on expensive long-term treatments that cost several hundred thousand dollars a year.
Novartis touched off a debate over what gene therapy is worth last year, estimating its treatment would be cost effective at up to US$5 million (NZ$7.63m) per patient.
A review in April by an independent US group, the Institute for Clinical and Economic Review (ICER), concluded Novartis' value estimate for Zolgensma was excessive.
But on Friday, ICER said based on Novartis' additional clinical data, the broad FDA label and its launch price, it believed the drug fell within the upper bound of its range for cost-effectiveness.
Novartis said it was offering health insurers the option of installment payments for Zolgensma as well as upfront discounts for payers who commit to standardised coverage terms.
Novartis chief executive Vas Narasimhan has much riding on Zolgensma, describing it as a near cure for SMA if delivered soon after birth. But data proving its durability extends to only about five years. The therapy uses a virus to provide a normal copy of the SMN1 gene to babies born with a defective gene. It is delivered by infusion.
Novartis is expecting European and Japanese approval later this year. Zolgensma will compete with Biogen's Spinraza, the first approved treatment for SMA.
The disease often leads to paralysis, breathing difficulty and death within months for babies born with the most serious Type I form. SMA affects about one in every 10,000 live births, with 50 percent to 70 percent having Type I disease.
Some neurologists see gene therapy becoming the preferred treatment for newborns with severe SMA, while acknowledging that families may choose to wait for long-term safety and efficacy data for Zolgensma.
The FDA said it approved Zolgensma based on clinical trials involving 36 patients aged two weeks to eight months. The agency said patients treated with Zolgensma demonstrated significant improvement in their ability to reach developmental motor milestones such as head control and ability to sit up.
The most common side effects of Zolgensma are elevated liver enzymes and vomiting. The FDA is requiring Zolgensma to have a boxed warning that acute serious liver injury can occur.
With additional studies under way, Novartis said it has so far treated more than 150 patients.