‘Like we were being forced to gamble with our son’s life’: Health insurers won’t pay for a $2.1 million drug for kids, and parents say they’re running out of time

Elissa Schultheis

A new type of therapy that treats a devastating inherited disease at the genetic level was recently approved in the US. Its $2.1 million price tag makes the drug, Zolgensma, the most expensive in the world.
Four parents of children born with the disease, called spinal muscular atrophy, told Business Insider they have been fighting health insurers like Aetna and Anthem to get access to Zolgensma. One decision, by UnitedHealth, has since been reversed.
Sarah Stanger, whose son lives with spinal muscular atrophy, called it "heartbreaking, because this one person is everything to us. And they’re acting like his life doesn’t really matter."
These kinds of barriers could create "further inequities in the healthcare system for people with genetic diseases and disabling conditions," Stanford ethicist Holly Tabor said.
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Jackson Schultheis was just over six months old when his parents noticed his legs giving out.

They didn’t know it then, but the symptom was a telltale sign of a rare, inherited disease called spinal muscular atrophy that severely affects a child’s muscle movement.

Elissa Schultheis

A new, one-time treatment for spinal muscular atrophy was approved in the US this year, creating new hope for kids like Jackson who are younger than two years of age. The therapy, called Zolgensma, is a cutting-edge new type of "gene therapy" treatment that treats the disease at the genetic level.

With a price tag of $2.1 million, Zolgensma is the most expensive drug in the world, leaving parents and their kids caught between a drug company selling a new treatment and health insurers trying to limit medical spending. Adding to the parents’ frustration, the drug needs to be given as soon as possible, because damage from spinal muscular atrophy accumulates over time and can’t be reversed.

For Jackson Schultheis, who lives in Indiana and gets health insurance through Anthem Blue Cross Blue Shield, time is of the essence. He has to start taking the drug before his second birthday, in late December. Jackson, who’s now 18 months old, has been denied Zolgensma by his health insurer twice. His parents also unsuccessfully tried to get access before the therapy was approved, when it was being tried out in research trials.

"Literally since the day of diagnosis we have been in hopes of receiving this gene therapy drug," Jackson’s mom, Elissa Schultheis, told Business Insider.

"The most heartbreaking part is that there isn’t much time," she said, because in less than six months Jackson will be too old for the drug.

Spinal muscular atrophy does damage to nerve cells that can’t be reversed, though current drugs like Zolgensma can improve survival and help with muscle control and function.

An Anthem spokeswoman said in a statement that its policy on Zolgensma had been decided by a committee that reviewed medical literature and determined when the therapy is medically necessary. She said a majority of the committee’s members were doctors who aren’t employed by Anthem. The company didn’t comment on the Schultheis family’s case.

"We recognize the severity of severe spinal muscular atrophy and we empathize with the children who have SMA, as well as their families," the spokeswoman said. "Based on the severity of this disease, we are actively in discussion with relevant experts and will continue to review our existing medical policy on coverage criteria for Zolgensma."

‘Sad and frustrating and angering’

In the Anthem denial letters, which are dated early this month and were shared with Business Insider, the health insurer says there isn’t proof that the treatment, Zolgensma, helps kids who are Jackson’s age. The Food and Drug Administration approved Zolgensma based on research testing the drug in kids up to 9 months old, though the regulator’s decision was broader and applied to kids up to two years old. Anthem’s cutoff is at 6 months old.

The Schultheis family is one of four families Business Insider spoke with whose health insurers have declined to cover Zolgensma for their kids. In one instance, the health insurer UnitedHealth Group reversed the decision after The Washington Post wrote about it. Parents say they’re frustrated and upset to be denied an FDA-approved treatment that could change their children’s lives.

The fight over Zolgensma is just a preview of the battles to come as drugmakers increasingly develop promising drugs that could bear seven-figure price tags. Zolgensma is a particularly challenging case, because it is one of the first and parents in some cases have readier access to a rival drug.

Sarah StangerSarah Stanger’s son Duke was denied Zolgensma by the self-insured non-profit health consortium Butler Health Plan in Ohio because it doesn’t cover any type of gene therapy.

"Which is heartbreaking, because this one person is everything to us. And they’re acting like his life doesn’t really matter," she told Business Insider.

Butler Health confirmed the policy, but declined to comment on Stanger’s case due to health privacy laws.

Gene therapies are cutting-edge treatments that could make big differences for debilitating diseases, but "we also must recognize that these therapies are costly and the current health benefit market has not yet determined how it will adapt to make them available to participants of health benefit plans without jeopardizing the opportunity to provide affordable benefits to the entire population each plan serves," Butler Health said in a statement. "This is not a consideration that is unique to the Butler Health Plan."

In the US, health insurers have some latitude to decide which treatments to cover, though the federal government and states set rules requiring many types of care. Patients and their doctors can appeal decisions like denials, including to an external reviewer.

In Missouri, Ben Olthoff was told by Aetna that his son, Isaac, didn’t have the right subtype of the disease and was too old for the treatment. After Olthoff was denied pre-approval for the procedure, the health insurer released a policy detailing its conditions for covering Zolgensma.

Aetna will only cover the treatment for patients younger than 9 months old, unless they’d already been receiving other treatment, according to the policy. Isaac was diagnosed when he was over 9 months old. The Olthoffs first applied around then, and he’s now 11 months old.

Ben Olthoff

"It was a little bit scary and felt like we were being forced to gamble with our son’s life," Ben Olthoff said. "And that’s sad and frustrating and angering."

Aetna has provided Zolgensma coverage "on a limited basis" since the FDA approved the drug, "but certain criteria that determine whether the treatment is safe and effective must be met," a spokesman said.

The criteria are based on the most recent science and can take time to research and review. In Zolgensma’s case, the process was expedited, he said.

"It’s important to note that an initial determination is just the start of the process for the Olthoffs, as multiple levels of appeal are available and rely heavily on consultation with experts both within and outside of the company," the Aetna spokesman said, noting that the Olthoffs’ request for Spinraza, another drug for spinal muscular atrophy that’s less expensive upfront but must be administered regularly, was "immediately" approved.

About 400 babies are born with spinal muscular atrophy in the US each year, and the disease is the leading genetic cause of death in infants. Children born with it have impaired reflexes and lessened muscular and head control; the disease also affects their ability to breathe, speak, and move.

For Zolgensma, "the landscape is still settling out," due to factors like its $2.1 million cost, the very recent, late May FDA approval, and the broader-than-expected FDA decision, said Dr. Tom Crawford, co-director of the Muscular Dystrophy Association Clinic at Johns Hopkins Medicine. The FDA approved the gene therapy for kids up to two years old, though the decision was based on clinical trial research with kids only up to 9 months old when the research began.

Access challenges could eventually get resolved but ‘there are people stuck in the middle’

Patients also had a hard time getting the other spinal muscular atrophy drug, Spinraza, when it first came out, though those challenges have largely been resolved, Johns Hopkins’s Crawford said. Approved by the FDA in late 2016, Spinraza was launched by the drug company Biogen at a list price of $750,000 for the first year and $375,000 a year thereafter, likely for a patient’s entire life.

Crawford recommends that patients who are waiting months for an insurance authorization consider Spinraza, since when it comes to spinal muscular atrophy, early treatment is crucial.

"Now the problem of course, with ethics is, there are people stuck in the middle," Crawford said. "That’s one of the deep quandaries."

The drug company Novartis, which makes Zolgensma, said it’s working to help patients get the treatment, including by partnering with health insurers to allow them to pay over time and based on how well the therapy works.

CEO Vas Narasimhan told Business Insider that "almost all patients" who qualified for the therapy and used Novartis’s patient-support services were able to get access, so long as they went through the required process, which could stretch to several weeks. In some cases, health insurers have restricted or limited access to patients with a form of the disease that’s considered less severe, or those who seek treatment with both Zolgensma and Spinraza, he said.

"Now in instances where insurers choose not to cover a patient that’s in label, which has been a handful of circumstances, we then work to try and find alternative ways to get patients the medicine," Narasimhan said.

More than 20 private health insurance plans and four Medicaid plans have set up coverage policies for Zolgensma since the FDA approval, according to Novartis. The drugmaker also noted that it is testing Zolgensma out in older patients with spinal muscular atrophy, in hopes of getting the therapy approved for those individuals.

Barriers to access concern Stanford ethicist Holly Tabor, who cowrote a 2017 research paper about the ethical dimensions of similar challenges with Spinraza.

"It potentially creates further inequities in the healthcare system for people with genetic diseases and disabling conditions," Tabor said.

Access to drugs is already a problem in the US, something these one-time drugs with an extremely high upfront cost could exacerbate, she said. Limited insurance coverage also presents difficulties for doctors who are recommending a treatment, and navigating insurance appeals processes can be difficult, Tabor said.

"People will have the impression and be told that there’s a gold standard of therapy that exists, and they just won’t be able to get access to it," she said.

"There will certainly be people who get denied who maybe wouldn’t be denied if they were covered by another insurance company or lived in another state, and that is certainly inequitable," Tabor said.

The families denied access to Zolgensma have continued to fight their health insurers, but many are at a loss about what to do next. Finding a job with different health insurance isn’t feasible, and neither is fundraising $2 million, Elissa Schultheis said.

Advocates from Novartis have worked with Stanger’s family and offered advice, but don’t have financial assistance available for her son, Duke, she said. Novartis didn’t answer questions about the Stanger family’s case.

"And as two public school teachers, we definitely don’t have $2.1 million," she said.

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