The National Health Insurance Service (NHIS) and Biogen started price negotiations for the latter’s Spinraza, spinal muscular atrophy (SMA) treatment, on Tuesday.

SMA is a genetic motor neuron disease, a leading genetic cause of infant death by impairing its ability to walk, eat, or breathe due to nervous system impairment.

The drug passed the NHIS’ pharmaceutical reimbursement assessment committee with a total amount contract and reward-type risk sharing agreement (RSA) based on the economic evaluation exemption system on last Dec. 20.

The panel reportedly reversed its earlier decision not to authorize the reimbursement of the drug due to the high price, after judging that the treatment’s efficacy was cost-effective and there are no alternative drugs.

RSA refers to an agreement between a pharmaceutical company and the NHIS to share the responsibility for uncertainties regarding a drug’s efficacy. The policy covers expensive anti-cancer medicines or treatment for diseases that do not have alternative therapies and are not covered by health insurance policies so that patients can receive the treatment they need with reduced financial burdens.

The economic evaluation exemption system grants insurance to drugs approved by the Ministry of Food and Drug Safety if the NHIS deems that the drug has clinical value and is cost-effective.

With the start of the price negotiation, the focus has now turned to what the insured drug price will be in Korea.

Spinraza is one of the most expensive drugs in the world. In Japan, where the price is the lowest, the drug costs 9.32 million yen per vial, which is roughly 95.1 million won. In the U.S. the drug costs $125,000 (139.6 million won) per vial, and in Belgium and Netherland the drug costs 83,300 Euros (106.4 million won).

Considering that SMA patients have to take six vials in the first year of treatment and three vials annually after that, even in Japan where the price is lowest patients medical burden is very high with about 570 million won in the first year and 285 million won every other year.

The pharmaceutical reimbursement assessment committee will refer to foreign-adjusted average prices of the drug in A7 countries – U.S., UK, Germany, France, Italy, Switzerland, and Japan.

According to industry sources, the current price of the drug in Korea is about 92 to 93 million won, which is similar to the price level of Japan. However, there is a possibility that the drug price might drop more as Biogen had proposed a deal that would lower the cost of the drug in Britain.

According to Reuters, the National Institute for Health and Care Excellence (NICE), Britain’s state-run health service, judged that Spinraza was too expensive even after a price discount offered by Biogen.

This is so despite the U.K. price of Spinraza's, also known as nusinersen, is half of the U.S. level with one vial costing 450,000 pounds ($573,000) for the first year, and Biogen offering an additional undisclosed discount to the National Health Service (NHS), the news agency reported recently.

“Even with the proposed confidential discount, the cost of nusinersen is too high for it to be considered a cost-effective use of NHS resources,” the National Institute for Health and Care Excellence (NICE) was quoted as saying.

If the Korean health insurance agency and Biogen complete the drug price negotiations smoothly in the middle of March, the drug will be added on to the drug payroll list by early April after passing the Health Insurance Policy Review Committee, an NHIS official said.

Copyright © KBR Unauthorized reproduction, redistribution prohibited