Estimated Spending on Beremagene Geperpavec for Dystrophic Epidermolysis Bullosa

This economic evaluation estimates US spending on beremagene geperpavec for treating dystrophic epidermolysis bullosa under varying assumptions of cost, the eligible patient population, patient age at diagnosis, and life expectancy.

Key Points

Question

What is the projected US spending on beremagene geperpavec (B-VEC) gene therapy, which was recently approved for treatment of autosomal recessive and autosomal dominant dystrophic epidermolysis bullosa (DEB)?

Findings

This economic evaluation involved an estimated population of 894 patients with DEB who were eligible for B-VEC therapy and found that estimated US spending for B-VEC therapy would be $268 million in the first year after approval and $805 million over the first 3 years.

Meaning

Findings of this economic evaluation suggest that the approval of B-VEC therapy for both autosomal recessive and autosomal dominant dystrophic epidermolysis bullosa may have a substantial financial impact on payers.

Abstract

Importance

New gene therapies can offer substantial benefits to patients, particularly those with rare diseases who have few therapeutic options. In May 2023, the US Food and Drug Administration (FDA) approved the first topical gene therapy, beremagene geperpavec (B-VEC), for treating both autosomal recessive and autosomal dominant dystrophic epidermolysis bullosa (DEB). However, FDA approval was based on limited data in patients with autosomal dominant disease, even though they comprise approximately 50% of all DEB cases.

Objective

To estimate projected spending in the US on B-VEC therapy for treating autosomal recessive and autosomal dominant DEB.

Design, Setting, and Participants

This economic evaluation used data from the National Epidermolysis Bullosa Registry to estimate the current population of US patients with autosomal dominant and autosomal recessive DEB, with the aim of estimating US spending on B-VEC therapy from an all-payers perspective during 1- and 3-year periods after FDA approval. A base-case cost of $300 000 per patient per year was assumed based on a report from the manufacturer (Krystal Biotech).

Exposure

Treatment with B-VEC.

Main Outcomes and Measures

Estimated overall spending on B-VEC in the first year and over a 3-year period after FDA approval. Several prespecified sensitivity analyses with different assumptions about the eligible patient population and the cost of therapy were performed, and lifetime total costs of treatment per patient were estimated.

Results

The estimated number of US patients with DEB who were eligible for treatment with B-VEC in the first year after FDA approval was 894. The estimated total expenditure for B-VEC therapy was $268 million (range, $179 million-$357 million). Over a 3-year period, estimated spending was $805 million (range, $537 million-$1.1 billion). Estimated lifetime total costs per patient were $15 million (range, $10 million-$20 million) per patient with autosomal recessive DEB and $17 million (range, $11 million-$22 million) for patients with autosomal dominant DEB.

Conclusions and Relevance

Results of this economic evaluation suggest that the FDA’s broad indication for the use of B-VEC in treating both autosomal recessive and autosomal dominant DEB will have significant implications for payers.

Introduction

Epidermolysis bullosa is a collection of rare genetic diseases characterized by persistent blistering of the skin.¹ The dystrophic subtype of epidermolysis bullosa (DEB) results from a mutation in the COL7A1 gene that impedes proper collagen formation.² The autosomal recessive DEB variant (RDEB) is the most severe form and is associated with progressive scarring, pain, pruritus, debilitating deformities in the hands and feet, esophageal strictures, and squamous cell carcinoma.^3,4 As a result, patients with RDEB have reduced life expectancy.⁵ The autosomal dominant DEB variant (DDEB), which tends to be milder, is associated with a heterogenous array of presentations, including blistering, scarring, and nail dystrophy; however, patients with this disease variant typically have a normal life expectancy.³ The prevalence of RDEB in the US is estimated to be 1.35 per million people, while DDEB has an estimated prevalence of 1.49 per million people.⁶

The management of DEB has historically involved wound management to limit infections, pain control, surgery for contractures resulting from scarring, and the surveillance and treatment of cancer that develops from persistent skin wounds.^7,8 In May 2023, the US Food and Drug Administration (FDA) approved the first disease-modifying therapy for DEB. Beremagene geperpavec (B-VEC) is a topical gene therapy that uses herpes simplex virus type 1 to restore a key protein in the skin (C7) that is absent in DEB due to the COL7A1 mutation.¹ An important feature of B-VEC, which differentiates it from other gene therapies, is that it is administered to patients weekly for an indefinite period, not as a one-time treatment.

The pivotal GEM-3 randomized clinical trial that led to FDA approval of B-VEC therapy, included 31 patients with DEB and reported complete healing of 67% of wounds at 6 months (primary end point) for those treated with B-VEC compared with 22% for those treated with placebo.¹ Beremagene geperpavec therapy represents a considerable advance in the treatment of DEB, as patients with the condition previously had no options for disease-modifying therapy.

However, the price of B-VEC therapy will be high, potentially limiting patients’ access to it. The manufacturer of B-VEC, Krystal Biotech, has disclosed in filings to the US Securities and Exchange Commission that the likely annual price of therapy could be between $200 000 and $400 000 per patient.⁹ In addition, the population eligible for this expensive gene therapy will include patients with a range of disease presentations. Although the pivotal clinical trial included only 1 patient with DDEB, the FDA approved the gene therapy to treat both autosomal recessive and autosomal dominant variants. Even if payers try to limit coverage of B-VEC therapy to only patients with severe forms of DEB, the potential budget impact of this new gene therapy could be sizable.

We sought to model the estimated spending on B-VEC therapy for all payers in the US under different assumptions about the use and costs of therapy. Understanding the impact of new gene therapies like B-VEC is important as policymakers consider reforms to rein in high launch prices of prescription drugs.¹⁰ The number of gene therapies available in the US is expected to grow considerably in the coming years,¹¹ and payers, including Medicare and Medicaid, will face difficult questions about limiting coverage beyond approved indications. The aim of this analysis was to illustrate how the FDA decision to approve B-VEC therapy for both RDEB and DDEB may impact budgets compared with an approval focused only on the more severe variant of the disease.

Methods

We estimated potential all-payer spending on B-VEC therapy for patients with DEB over 1- and 3-year periods after drug approval under several scenarios reflecting the uncertainty in the available data about which patients will receive therapy and the exact price of this novel therapy. In accordance with the Common Rule, this economic evaluation was exempt from review and the requirement for informed consent because no human participants were involved in this research. Model inputs for disease prevalence and incidence, mortality rate, and cost are provided in the Table.

Table. Model Inputs.

Input	Parameter value	Source
Prevalencea
DDEB	1.49	Fine6
RDEB	1.35	Fine6
DEB unknown variant	0.42	Fine6
Incidenceb
DDEB	2.12	Fine6
RDEB	3.05	Fine6
DEB unknown variant	1.48	Fine6
Mortality rate	0.02	Assumed
Cost
Base case	$300 000	Assumed
Low estimate	$200 000	Krystal Biotech SEC filing
High estimate	$400 000	Krystal Biotech SEC filing

Abbreviations: DDEB, autosomal dominant dystrophic epidermolysis bullosa; DEB, dystrophic epidermolysis bullosa; RDEB, autosomal recessive dystrophic epidermolysis bullosa; SEC, US Securities and Exchange Commission.

^a Per 1 million people.

^b Per 1 million live births.

Eligible Patient Population

We used estimates from the National Epidermolysis Bullosa Registry to calculate the number of patients with each variant of DEB.^6,12 For the base-case analysis, we assumed that B-VEC therapy would be provided to both patients with RDEB and those with DDEB, consistent with the FDA label.¹³ Given that patients with DDEB have a milder form of disease, we performed an alternative scenario analysis in which we assumed that the population eligible for B-VEC therapy would be restricted to patients with the more severe RDEB variant. This assumption reflects the population of the pivotal GEM-3 clinical trial,¹ which included only 1 patient (3%) with DDEB.

In a second alternative scenario analysis, we included patients with DDEB and RDEB as well as those reported to have an unknown classification of DEB.⁶ While all DEB is either autosomal recessive or autosomal dominant, disease in patients in earlier registries was occasionally classified as unknown when genetic testing was unavailable.⁶ In a contemporary setting, it is likely that these patients would be tested and would be eligible for B-VEC therapy based on the labeled indication.

Costs

In the base-case analysis, we assumed a price of $300 000 per patient per year for B-VEC therapy based on the midpoint of company-reported treatment costs.⁹ In sensitivity analyses, we estimated the costs to payers using the upper and lower values of company-reported costs, reflecting a low ($200 000 per patient per year) and high ($400 000 per patient per year) estimate. Since B-VEC therapy is administered indefinitely, we assumed that the cost of B-VEC therapy was applied for each year of the analysis.

For all analyses, in the first year, we multiplied the eligible patient population by the assumed cost of therapy. In subsequent years, we estimated spending on B-VEC therapy by accounting for new cases of DEB, the continued use of therapy for patients identified in the first year, and the patient mortality rate. We assumed that there would be no treatment discontinuations. No rebates were applied to the price of B-VEC therapy in the analysis; since there is no approved competition for treating DEB, rebates are expected to be minimal.

Modeling Lifetime Costs

To illustrate the impact to payers over the lives of patients with DEB, we estimated the lifetime cost of therapy for a newly diagnosed patient with RDEB and a newly diagnosed patient with DDEB. Patients with RDEB tend to be diagnosed in infancy; we assumed in our analysis that patients with this form of disease started therapy in the first year of their lives and that they lived to age 50 years based on the reported median life expectancy of patients with RDEB.^3,14,15 Because B-VEC therapy may be associated with increased life expectancy in these patients (as most patients die from sequelae of chronic skin disease, predominantly squamous cell carcinoma), we performed analyses that assumed different improvements in survival (10%, 25%, and 50%) to illustrate how these changes might impact payers.¹⁴

For patients with DDEB, who tend to experience symptoms later in life, we assumed that patients would be diagnosed at age 40 years. A likely consequence of these patients being eligible for B-VEC treatment is that testing to identify them earlier will become more common; as such, we varied the age at diagnosis to 20 years and to being diagnosed at birth (ie, via genetic testing).

Results

The estimated potential population of patients with RDEB and DDEB in the US eligible for B-VEC treatment in the first year was 894 patients, and the estimated spending for the base-case scenario was $268 million (range, $179 million-$357 million). The cumulative cost in the US of treating patients with RDEB and DDEB over the first 3 years with B-VEC would be approximately $805 million (range, $537 million-$1.1 billion) (Figure 1) at an assumed yearly price of $300 000 per patient.

Figure 1. Estimates of Annual Spending Receiving Beremagene Geperpavec Therapy per Patient for Patients With Autosomal Recessive or Autosomal Dominant Dystrophic Epidermolysis Bullosa.

Treatment Restricted to Patients With RDEB

For the more restrictive scenario in which only patients with RDEB were treated, the potential population eligible for treatment with B-VEC in the first year was 442 patients, and the estimated spending in the base-case scenario would be $132 million (range, $88 million-$177 million). Over a 3-year period, the cumulative estimated spending for B-VEC therapy to treat these patients would be $400 million (range, $266 million-$533 million) (Figure 2A).

Figure 2. Estimated Annual Spending Receiving Beremagene Geperpavec Therapy per Patient for Patients With Dystrophic Epidermolysis Bullosa.

Treatment of All Patients With DEB

Including patients who would have been classified as having unknown DEB in prior registries would increase the patient population eligible for B-VEC therapy to 1035 patients. In the first year, the estimated spending for these patients in the base-case scenario would be $310 million (range, $207 million-$414 million), with cumulative spending over the first 3 years of $934 million (range, $623 million-$1.2 billion) (Figure 2B).

Lifetime Per-Patient Costs

Assuming patients with RDEB live until age 50 years after receiving treatment, the estimated spending on B-VEC therapy per patient in the base-case scenario would be approximately $15 million (range, $10 million-$20 million). However, this is likely to be a conservative estimate of the costs because mortality for those with RDEB often results from squamous cell carcinoma, a sequela of skin damage, and so life expectancy may be longer for patients who receive B-VEC therapy. If patients live until age 75 years (increase in life span of 50%), putatively reflecting the typical life expectancy for US adults, the estimated cost of B-VEC treatment in the base-case scenario would be $22.5 million (range, $15 million-$30 million) per patient (Figure 3). This projection reflects a conservative estimate to payers, as there is considerable uncertainty on the long-term survival outcomes associated with B-VEC treatment.

Figure 3. Estimated Lifetime Spending per Patient Receiving Beremagene Geperpavec Therapy Under Different Assumptions of Life Expectancy for Patients With Autosomal Recessive Dystrophic Epidermolysis Bullosa.

Patients with DDEB are not typically diagnosed at birth but rather when symptoms occur, and they have standard life expectancy. Figure 4 shows exploratory estimates of the lifetime treatment costs of these patients under different assumptions relating to the age at diagnosis. For example, in a patient diagnosed with DDEB at age 20 years, lifetime treatment costs in the base-case scenario could exceed $17 million (range, $11 million-$22 million).

Figure 4. Estimated Lifetime Spending per Patient on Beremagene Geperpavec Therapy Under Different Assumptions of the Age at Diagnosis for Patients With Autosomal Dominant Dystrophic Epidermolysis Bullosa.

Discussion

Results of this economic evaluation suggest that treatment with B-VEC for DEB is estimated to cost more than $800 million dollars in the US in the first 3 years after FDA approval. These estimated costs would be more than double the expected costs of treatment had the FDA approved the gene therapy only for the more severe variant (RDEB). Reasonable estimates based on less conservative assumptions project spending in excess of $1 billion on this therapy during the first 3 years after FDA approval. The expected lifetime costs of treating a patient with RDEB ($15 million) and DDEB ($22 million) exceed the costs of all other 1-time gene therapies for other diseases.¹¹

Treatment with B-VEC represents an important advance in the treatment of RDEB. The results of the GEM-3 phase 3 trial¹ indicate a promising new therapy for patients with autosomal recessive disease who have a poor quality of life and limited life expectancy. For many patients with RDEB, this therapy will offer immense clinical benefit and is likely to improve quality of life and survival.

The GEM-3 trial included only 1 patient with DDEB, yet these patients were included in the FDA approval.¹³ Evidence to support the use of B-VEC therapy in these patients is less conclusive than that for patients with RDEB. Similar extrapolations from pivotal clinical trials by the FDA have been observed in approvals for drugs treating other diseases (eg, nusinersen for the treatment of spinal muscular atrophy).¹⁶ In the case of B-VEC therapy, the wider indication granted by the FDA may lead to friction between payers on the one hand and patients and physicians on the other. Payers may not want to reimburse for expensive therapies in patients with mild autosomal dominant disease even though such prescribing would fall within the labeled indication. Since there are a paucity of data for these patients, reestablishment of a national registry could be an important initiative for postmarketing data monitoring.¹²

The high cost of gene and cell therapies has led to questions about their value, particularly given uncertainty about long-term benefits and clinical outcomes.¹⁷ One way to assess their value is by using cost-effectiveness analysis and measuring outcomes via quality-adjusted life-years (QALYs). In cases for which new gene therapies are thought to both improve health-related quality of life and extend life, as most purport to do, the QALY measure is well suited to capture these benefits. Considerable incremental gains in QALYs that accrue from new gene therapies may, in some cases, justify their high costs. For example, a report from the Institute for Clinical and Economic Review on onasemnogene abeparvovec for the treatment of spinal muscular atrophy reported an incremental cost-effectiveness ratio per QALY gained of less than $150 000 despite an assumed 1-time cost of $2 million.¹⁸ Similar to other gene therapies, there is still considerable uncertainty about the durability of the treatment effect for B-VEC. Further research on long-term outcomes is needed to better understand the cost-effectiveness of B-VEC therapy, particularly among individuals with mild forms of DDEB.

Our analysis may underestimate costs since diagnoses of DEB may increase. Recent studies have suggested that the incidence and prevalence of RDEB reported from the National Epidermolysis Bullosa Registry might be underestimated.¹⁹ National estimates from other countries suggest higher rates of the disease.⁵ While patients with RDEB are often identified based on the severity of the disease, patients with DDEB are likely underdiagnosed in clinical practice. If the availability of B-VEC therapy prompts increased testing and identification of patients with DDEB, the impact to payers may be even greater than our analysis suggests.

Payers will likely implement prior authorization requirements or other prescribing restrictions on B-VEC therapy, such as ensuring that the prescription comes from a dermatologist. While such measures may be appropriate for those with DDEB, they could also disrupt care for patients with RDEB in whom the benefit of B-VEC therapy will likely be greatest. High prices for B-VEC therapy may also challenge patients without insurance or those with high-deductible health plans. Numerous studies suggest that patients facing substantial out-of-pocket costs are less adherent to therapy with high-cost drugs, even life-extending cancer treatments.²⁰

One way for the manufacturer to avoid such problems would be to set a lower price for its gene therapy. Most available gene therapies now cost between $1 million and $4 million¹¹ and are given as 1-time treatments. These costs are substantially lower than the estimated lifetime costs of B-VEC therapy. Our most conservative projection of treatment with B-VEC for RDEB estimated costs at $10 million per patient over their lifetime. The manufacturer has argued that payers should consider B-VEC treatment as more akin to enzyme replacement therapy than to existing gene therapies.²¹ Enzyme replacement therapies typically cost between $50 000 to $200 000 annually per patient; thus, B-VEC therapy would be on the high end of prices even for this category of drugs.²² In other high-income countries, expected lifetime costs may be 1 piece of information used to help negotiate a fair price for the treatment, but such systems do not exist in the US, where manufacturers can freely set and raise prices after product launch.

Limitations

This study has limitations. Manufacturers may change prices over time, making our calculations underestimates or overestimates of treatment costs. For example, some reports have suggested that the annual cost of B-VEC therapy may be greater than $600 000; therefore, our spending estimates are likely conservative.²³ We had to make a variety of assumptions about mortality rates, the age of patients at diagnosis, and other characteristics of patients with RDEB and DDEB that may affect cost estimates. We did not incorporate differing dosing regimens, nor did we model payer refusals to cover B-VEC therapy or treatment discontinuation by patients. Our goal was to estimate potential costs to the US health care system of B-VEC therapy given the broad FDA approval. To minimize the impact of any single assumption, we conducted a series of analyses using different assumed values. Our analysis, therefore, is meant to be illustrative rather than a precise estimate of spending on B-VEC therapy.

Conclusions

Results of this economic evaluation suggest that the FDA approval of B-VEC therapy for both DDEB and RDEB could have significant implications for payers. While there is good evidence for the effectiveness of B-VEC for treating RDEB, the evidentiary basis for B-VEC approval among patients with DDEB is more uncertain. Further studies are needed to assess the long-term effectiveness and value of B-VEC in patients with DDEB. At our most conservative estimates of lifetime costs, B-VEC will be the most expensive gene therapy currently marketed in the US.

Supplement 1.

Data Sharing Statement