FDA approves Novartis’ $2.1 million gene therapy — making it the world’s most expensive drug

The Food and Drug Administration on Friday approved Novartis‘ $2.13 million gene therapy for spinal muscular atrophy, sending the company’s shares traded in the U.S. 4% higher in midday trading.

The therapy, Zolgensma, is a one-time treatment for spinal muscular atrophy — a muscle-wasting disease and leading genetic cause of infant mortality that affects one in every 11,000 births. Novartis had previously said it could price the treatment between $1.5 million to $5 million.

Novartis said the treatment will cost $2.1 million — or $425,000 per year for five years. The company said it’s “working closely with insurers to create 5-year agreements based on success of the treatment as well as other novel pay-over-time options. It’s currently in “advanced discussions” with more than 15 insurers on payment options.

Novartis CEO Vas Narasimhan has called for new ways to pay for innovative gene therapies.

“Zolgensma is a historic advance for the treatment of SMA and a landmark one-time gene therapy. Our goal is to ensure broad patient access to this transformational medicine and to share value with the healthcare system,” Narasimhan said a statement Friday.

The company in explaining the rationale for its price said the one-time treatment is 50% less than the 10-year cost of current chronic management for the disease.

“We believe by taking this responsible approach, we will help patients benefit from this transformative medical innovation and generate significant cost savings for the system over time,” Narasimhan said.