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Express Scripts exclusive deal with Spark Therapeutics

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Express Scripts chief medical officer Steve Miller poses for a portrait in the Manhattan borough of New York. Reuters

MISSOURI (Reuters) – Express Scripts Holding Co built a multi-billion enterprise pressuring drug companies to lower their prices for US patients. Now it is quietly building a side business: getting paid to help drug companies dispense a new generation of high-priced drugs.

Express Scripts is in talks with biotechnology companies Biomarin Pharmaceutical Inc, Spark Therapeutics Inc and Bluebird Bio Inc to have its specialty pharmaceutical business exclusively distribute their new hemophilia therapies when they are expected to become available in 2019 and 2020, chief medical officer Steve Miller told Reuters in an interview.

Biomarin, Spark and Bluebird confirmed to Reuters that they were speaking to payers – a group generally defined as pharmacy benefit managers, health plans and government agencies – about pricing models for future therapies. Analysts project those drugs could top $1 million to $1.5 million in price.

Rather than rail against the drugs’ expected high prices, Mr Miller echoes the familiar drug company argument that the potentially curative therapies will likely be worth the high cost if they supplant the hundreds of thousands of dollars in annual medical costs to treat ailments such as hemophilia, which affects about 20,000 people in the United States alone.

“Even if they charge $1 million, that’s a great deal,” Mr Miller said. “So there are going to be some gene therapies where it is very clear that everyone who has that disease should get it.”

By working closely with biotech companies, Mr Miller says it can help their expensive therapies succeed commercially. To manage any potential conflicts of interest, he said Express Scripts separates its benefits management and specialty pharmacy businesses.

The move into hemophilia builds on exclusive rights Express Scripts already has to distribute Spark’s Luxturna – an $850,000 treatment for a rare genetic disorder that, left untreated, causes children to go blind. It has a similar deal with Biogen Inc on Spinraza, he told Reuters. The drug costs $750,000 the first year and treats the rare condition spinal muscular atrophy that often kills babies within months of their birth. Spark and Biogen confirmed the agreements.

The company also helps manage one of the most expensive gene-based cancer treatments on the market: the $475,000 Novartis AG gene-based cancer therapy Kymriah – a personalized treatment that requires a long hospital stay. Novartis confirmed the arrangement to Reuters.

Those deals put Express Scripts in a vastly different role than its traditional business managing prescription drug claims for the employees of its corporate and government clients, a business Cigna Corp found so valuable that it agreed in March to acquire Express Scripts for $52 billion.

Express Scripts, which negotiates the prescription payments for 80 million people in the United States, competes with UnitedHealth Group Inc’s Optum and CVS Health Corp.

These companies are usually among the most vocal critics of the pharmaceutical industry’s pricing practices, publicly calling out companies and specific products for their high cost.

But the pharmacy benefits businesses themselves are facing growing criticism from US regulators, lawmakers, drugmakers, and President Trump, who say they act as unnecessary middlemen and end up helping drive up prices for payers.

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