Zolgensma is a one-time-only gene therapy treatment for children aged less than two years with spinal muscular atrophy (SMA) that costs $2.1 million for the single treatment. The reason Zolgensma is so expensive is because that is the price Novartis has decided it is worth because it “dramatically transforms the lives of families affected by this devastating disease” and the claimed cost of bringing new drugs to market. But this price is not without controversy. For a start, the early development of Zolgensma was financed by the National Institutes of Health and several charities devoted to finding treatments for SMA, including many U.S. charities such as Sophia’s Cure, Cure SMA, Getty Owl Foundation, Fighting SMA, Jadon’s Hope Foundation, the Gwendolyn Strong Foundation, and Miracle for Madison. Many of these charities use donations by patient families and friends to subsidize research and clinical trials into new medicines for SMA. The CEO of Novartis, Vas Narasimhan, argues that gene therapies represent a medical breakthrough in the way that they offer hope of a cure for deadly genetic diseases with a single dose. In some cases, the alternative is a multi-dose treatment with incremental improvements. For example, an alternative to Zolgensma is Spinraza that is taken four times a year for life. The list price is $750,000 for the first year and then $350,000 per year after that, so about $4 million a decade. But how do they calculate the actual cost? Many companies use a value-based pricing model which calculates the cost based on how many years of life gained as well as taking into account the effectiveness of the drug. But this means putting a price on how much a life is worth, as well as ensuring the company makes a reasonable margin on their investment. Little is disclosed about the true cost of bringing a new drug to market, and Novartis didn’t develop Zolgensma but acquired it through the $8.7 billion purchase of US firm AveXis.
So there is no tangible reason why it’s this expensive.