CEO of Bluebird Bio Defends $ 1.8 Million Award for New Gene Therapy

Nick Leschly, CEO of Bluebird Bio, on Friday defended the biotechnology company's $ 1.8 million award for its new gene therapy to treat a rare genetic blood disorder.

Bluebird's treatment, Zynteglo, was approved in Europe earlier this month for beta-thalbademia patients who need regular blood transfusions to manage their disease and who do not have a compatible donor for stem cell transplant. The price, set Friday, makes this drug the second most expensive drug in the world behind the $ 2.1 million gene therapy by the Swiss drug manufacturer Novartis for the treatment of spinal muscular atrophy.

Leschly explained that the unique treatment is a game changer for patients, giving them a "lifetime benefit" while avoiding costly blood transfusions every few weeks for the rest of their lives.

Bluebird said patients will only pay $ 1.8 million if the treatment works. The company has proposed a five – year installment, of an amount of 315,000 euros, or $ 356,567, paid in advance and additional payments due only if the treatment proves effective. It's a form of value-based pricing, Leschly said.

"Neither Novartis' drug nor ours are getting close to the world's most expensive drug.It's really thinking differently," Leschly said in an interview with CNBC's "The Exchange." "It's a good thing, a one-time curative treatment."

Novartis and Bluebird approvals mark a new era in medicine where new treatments can cure patients in one treatment – but at a high price. Insurers and governments will have to figure out how to pay for these treatments and society will have to decide whether a medicine, even one that saves life, is worth millions of dollars.

Bluebird expects that the treatment of beta-thalbademia in the United States will be approved in 2020.

In May, Novartis had similarly reasoned about the pricing of its unique treatment for spinal muscular atrophy, a muscle wasting disease and the leading genetic cause of infant mortality.

Novartis explained that the single treatment cost 50% less than the cost of 10 years of current chronic disease management, by rationalizing the high price. Another current treatment for spinal muscular atrophy in children and adults is Biogen Spinraza, which has a list price of $ 750,000 in the first year and $ 375,000 annually thereafter. .