World's most expensive medicine priced at $850000

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Reactions to the announcement yesterday range from the headline "U.S. drug firm says it can cure blindness - but it's going to cost an arm and a leg" in the South China Morning Post to Bloomberg "Gadfly" columnist Max Nisen pointing out that the price tag is less than had been expected and that a performance-based discount program for a drug therapy is "a risky move".

Anticipating criticism, Spark promised to reimburse patients if the treatment proves not to be effective, and said it expects U.S. health authorities to authorize payment in stages.

A breakthrough genetic therapy for a rare form of blindness will cost $850,000 per patient, its maker announced on Wednesday.

Today, finally, is the beginning of another important chapter in the gene therapy story.

Consternation over skyrocketing drug prices, especially in the US, has led to intense scrutiny from patients, Congress, insurers and hospitals. "It's better than if they had just put out a price and said, you know, 'You're paying it". Luxturna, approved in December by the FDA, is created to be given just once.

Given Luxturna's federal approval and strong study results, experts say USA insurers will likely cover the drug. Now the highest priced therapy in the country - outpacing drugs like Spinraza at $750,000 for the first year of therapy - it falls on Spark to come up with the right pricing model that can persuade payers to cover the procedure for a small group of under 2,000 potential patients, with fewer than 20 new patients per year.

The FDA has given the green light to several gene therapies since last summer, as decades of research into the genetic building blocks of life begin translating into marketable treatments. "The mutation affects both eyes, usually at the same pace, so most patients would need treatment for both eyes, a Spark Therapeutics spokeswoman said", she writes. The product works by delivering, via an eye injection, some 150 billion viral vector particles containing a correct copy of the RPE65 gene to retinal cells, restoring their ability to make the needed enzyme.

The question for Orkin, who has written extensively about how society should pay for gene therapy, will be just how Spark determines whether an individual patient treated with Luxturna has "failed" and thus merits a rebate. As a result of current government drug price reporting rules, the company can not offer an installment plan without being forced to sell the drug to Medicaid at an unsustainably low price. However, Novartis said this price will not be charged to patients who do not respond within a month of treatment.

"Luxturna offers hope to hundreds of patients", said Patients For Affordable Drugs' Mitchell.

"It's wildly expensive but, to be very frank, I think they've priced it what I'll call responsibly", Dr. Steve Miller, chief medical officer of pharmacy benefits manager Express Scripts, told CNBC. "But ... what is a fair price that will maximize affordability and accessibility and provide a reasonable return for the drug?" "Our system can not handle unjustified prices like this, and the new payment models announced today are merely a way to disguise a price that is simply too high".