Novartis’ Zolgensma (onasemnogene abeparvovec), the world’s most expensive drug yet to treat spinal muscular atrophy (SMA), will become reimbursable in August, the government said.

The government set the maximum reimbursement price of the treatment at 2 billion won ($1.52 million), but the out-of-the-pocket expense per patient will be only 5.98 million won ($4,558) with the national health insurance coverage.

Zolgensma is the only gene replacement therapy to treat SMA with a one-time intravenous injection.

SMA is a rare disease that leads to loss of muscle movement and motor neurons due to a mutation in the survival motor neuron 1 (SMN1) gene.

Infants with type 1 SMA who show symptoms within six months of age have an average life expectancy of 13 months. However, the disease is the No. 1 killer of babies aged two or younger because respiratory failure occurs before two years of age.

The Ministry of Health and Welfare approved reimbursement for Zolgensma at a meeting of the health insurance policy review committee on Wednesday. In addition, it revised the list of reimbursed drugs and the maximum reimbursement rates.

According to the revision, Zolgensma’s maximum reimbursement rate is 2 billion won. As the treatment is a single injection with an ultra-expensive price tag, the government said it would apply a risk-sharing agreement (RSA) to monitor therapeutic effects and manage the health insurance finance stably.

Zolgensma will be supplied under the RSA in three types – a “refund” type where the drug company refunds a certain percentage of the claim amount to the National Health Insurance Service (NHIS); an “expenditure cap” type in which the excess amount is refunded when the cap exceeds a certain amount; and a “utilization cap/fixed cost per patient” type where the drugmaker refunds a certain percentage of the amount in case of treatment failure.

In the first year of reimbursement, the government said that 14 patients, including those treated with Biogen’s Spinraza (nusinersen), will receive Zolgensma treatment. Among them, seven newly diagnosed SMA patients, and the remaining seven have received Spinraza.

“In the first year, about 27.7 billion won was expected to be spent for the Zolgensma administration. But under the RSA in the refund, expenditure cap, and utilization cap types, the spending will be smaller,” the health and welfare ministry said.

The ministry also said that it would re-evaluate Zolgensma’s clinical usefulness and cost-effectiveness to change the drug price and the reimbursement rate in the fourth year of reimbursement.

A guardian of an SMA patient scheduled for Zolgensma administration must consent to a five-year follow-up for regular evaluations of response. Patients should also undergo a preliminary review to determine whether they meet the criteria for reimbursed Zolgensma before the administration.

The government noted that if a patient receives Zolgensma and an additional SMA treatment, the additional treatment will not be reimbursed.