What a $2 Million Per Dose Gene Therapy Reveals About Drug Pricing

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Vincent Gaynor remembers, almost to the minute, when he realized his part in birthing the breakthrough gene therapy Zolgensma had ended and the forces that turned it into the world’s most expensive drug had taken over.

It was May 2014. He and his wife were sitting in the cafeteria at Nationwide Children’s Hospital in Columbus, Ohio.

Elsewhere in the hospital, an infant — patient No. 1 in a landmark clinical trial — was receiving an IV infusion that, if it worked, would fix the genetic mutation that caused spinal muscular atrophy, a rare, incurable disease. At the time, children born with the most severe form of SMA swiftly lost their ability to move, to swallow, to breathe. Depending on the disease’s progression, most didn’t live to their second birthdays.

The Gaynors’ daughter Sophia had been diagnosed with SMA five years earlier. Since then, they’d raced to fund research to save her. Their charity, Sophia’s Cure, was covering a substantial portion of the costs of the trial.

They’d helped raise about $2 million for a program at Nationwide run by Brian Kaspar, a leading researcher. Gaynor, a New York City construction worker, had forged a tight bond with Kaspar, speaking frequently with him by phone, sometimes deep into the night.

But their relationship had started to fray when — with success in sight — Kaspar became part owner of AveXis, a biotech startup that had snapped up the rights to his SMA drug. Billions of dollars were at stake.

When Kaspar walked into the cafeteria that day, Gaynor said, the scientist didn’t acknowledge him or his wife before sitting down a short distance away. Neither did the man with him, the startup’s CEO.

“It was like they didn’t know us,” Gaynor recalled.

When Zolgensma hit the market five years later, it was hailed as a miracle drug. Some babies treated with it grew up able to run and play. It helped reduce U.S. death rates from SMA, long the leading genetic cause of infant mortality, by two-thirds.

That leap forward came at a sky-high price: more than $2 million per dose, making Zolgensma then the costliest one-time treatment ever.

How did a drug rooted, like many, in seed money from the U.S. government — that is, American taxpayers — and spurred by the grassroots fundraising of desperate parents, end up with such a price tag?

The story of Zolgensma lays bare a confounding reality about modern drug development, in which revolutionary new treatments are becoming available only to be priced out of reach for many. It’s a story that upends commonly held conceptions that high drug prices reflect huge industry investments in innovation. Most of all, it’s a story that prompts, again and again, an increasingly urgent question: Do medical advances really have to be this expensive?

ProPublica traced Zolgensma’s journey from lab to market, from the supporters there at the beginning to the hired guns brought in at the end to construct a rationale for its unprecedented price.

We found that taxpayers and private charities like Sophia’s Cure subsidized much of the science that yielded Zolgensma, providing research grants and opening the door to federal tax credits and other benefits that sped its path to approval.

Yet that support came with no conditions — financial or otherwise — for the for-profit companies that brought the drug over the finish line, particularly when it came to pricing.

Once Zolgensma’s potential was clear, early champions like the Gaynors were left behind as the private sector rushed in. AveXis’ top executives and venture-capital backers made tens or hundreds of millions of dollars apiece when the startup was swallowed by the pharmaceutical giant Novartis AG in 2018.

Wall Street analysts predicted Novartis’ new prize drug would be the first therapy to smash the million-dollar-a-dose mark. The Swiss colossus crafted a sophisticated campaign to justify more than double that amount, enlisting a team of respected academics, data-modelers and pricing strategists to help make its case.

“This was a case where the charities and the government did everything to get this thing commercialized, and then it just became an opportunity for a bunch of people to make transformative, generational wealth,” said James Love, director of the public advocacy group Knowledge Ecology International.

In a statement to ProPublica, Novartis said Zolgensma’s price reflects its benefits to children with SMA and to society more broadly.

“Zolgensma is consistently priced based on the value it provides to patients, caregivers and health systems,” the company said, adding that the drug may reduce the burden of SMA by replacing “repeat, lifelong therapies with a single treatment.”

Zolgensma’s price quickly became the standard for gene therapies. Nine of them cost more than $2 million. A tenth, approved in November, is predicted to run about $3.8 million, just shy of the most expensive, also approved last year, which costs $4.25 million a dose.

“Drug companies charge whatever they think they can get away with,” said David Mitchell, the founder of Patients For Affordable Drugs. “And every time the benchmark moves up, they think, ‘Well, we can get away with more.’”

Parents of children with SMA say their concerns about costs pale in comparison to the hope offered by such cutting-edge therapies. “I mean, it’s a child’s life,” said Hailey Weihs, who battled her health plan to get Zolgensma for her daughter. “Anybody would want that for their own child.”

The seven-figure costs of Zolgensma and other gene therapies add to the nation’s ballooning bill for prescription drugs, absorbed by all Americans in the form of rising insurance premiums and taxes for public programs like Medicaid.

Breakthroughs like Zolgensma are often framed as wins for all: Patients get life-saving new therapies. Drug companies and biotech investors make enough money to incentivize even more breakthroughs.

But not everyone’s a winner, Gaynor noted.

No one wanted Zolgensma to succeed more than he did, or understands better what it has meant for families like his. Yet his years behind the scenes of the drug’s development left him and his family disillusioned.

“I learned it’s all about money,” Gaynor said. “It’s not about saving people.”

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When Vincent and Catherine Gaynor started their married life in 2006, they knew one thing for certain: They wanted children.

They learned well into Catherine’s 2008 pregnancy that they were both carriers for SMA, meaning there was a 25% chance their child would be born with the muscle-wasting disorder.

They were concerned but clung to the larger chance the baby would be born healthy.

When Sophia was born in late February 2009, at first they just marveled at her sweet disposition and bright, expressive eyes. How she loved being snuggled. How she sighed after she burped.

But it didn’t take long for Vincent, who’d grown up with younger siblings, to sense something was off. Sophia didn’t lift her legs. They flopped outward like a frog’s when he changed her diaper.

Their pediatrician assured them Sophia was fine. Then a different doctor suggested testing her for SMA. While they waited for the results, the family went to a nearby park, and Catherine pushed Sophia’s stroller around a pond. “I remember walking behind her with the video camera and knowing in my heart this was the last day we were all going to be happy,” Vincent recalled.

After Sophia’s diagnosis, Catherine quit her office job to care for the baby full time. Vincent started gulping down studies and going to conferences, desperate to find a way to save his daughter.

At the time, there were no treatments to slow or stop SMA. By the time Sophia was 4 months old, she needed a machine to help her breathe overnight. At 6 months, she could no longer take a bottle and needed a feeding tube. Each time she lost ground, their urgency to find a treatment grew.

The Gaynors didn’t have deep pockets or wealthy friends. He was a steamfitter with Local 638, from a family of steamfitters. They began raising small amounts of money by hosting golf tournaments and throwing Zumba parties. As the volume of donations grew, they founded Sophia’s Cure, emerging as serious players in the small world of SMA charities.

I learned it’s all about money. It’s not about saving people.

—Vincent Gaynor, who raised funds for medical research to help his daughter with spinal muscular atrophy
Vincent met Brian Kaspar at a cocktail hour for high-yield fundraisers. Kaspar was among the small group of top researchers working to find treatments for SMA, competing fiercely for recognition and funds. (Kaspar declined an interview request from ProPublica and didn’t respond to written questions.)

Because his drug was a gene therapy, public grant money and private philanthropy played an especially central role, with the National Institutes of Health alone putting over $450 million into science related to SMA. Drug companies at the time approached these treatments with more skepticism, waiting longer to invest and letting universities and academic hospitals do the heavy lifting, said Ameet Sarpatwari, an assistant professor at Harvard Medical School who studies the pharmaceutical industry.

Drug companies sponsored only 40% of the U.S. gene therapy trials active in January 2019, according to a study Sarpatwari co-authored.

“The narrative of industry is, ‘We’re doing the hard, expensive part of drug development,’ and, at least for cell and gene therapies, the most risky part is actually being done by public or federally supported labs,” Sarpatwari said, calling Zolgensma a “poster child” for the study’s findings.

By the time of the cocktail party, Kaspar had turned early research into a promising drug therapy that he was beginning to test on animals — the precursor to a human trial. Gaynor remembered him as humble and almost classically nerdy, happy to spend hours on the phone explaining how motor neurons work.

More established SMA charities tended to hedge their bets, spreading money around to multiple programs. But Sophia was already around 18 months old, and Gaynor had no time for that. In September 2010, when Sophia’s Cure won a $250,000 grant from the Pepsi Refresh Project by amassing votes online, he steered the money to Kaspar’s program. The following June, the charity signed an agreement promising Kaspar up to $1 million more, for which it had launched a drive to recruit 200 people to raise $5,000 apiece.

As the money flowed in, Gaynor and Kaspar became close friends. The Gaynors stayed overnight at Kaspar’s house on their drive to an annual charity event. Kaspar did a Q&A for the Sophia’s Cure YouTube channel from the Gaynors’ dining room and proofread posts Vincent wrote for the charity’s website.

Gaynor said they often talked about how getting the drug through the development process would require way more money and muscle than the various SMA charities could muster. Kaspar shared his conversations with venture capital firms and even asked Gaynor to talk to a potential investor.

Yet Gaynor said he was blindsided when Kaspar told him he’d formed a relationship with a Dallas startup called BioLife Cell Bank that had been focused on stem cell research.

The CEO, John Carbona, then 54, had run medical device and equipment companies, but he had no background in drug development. In an interview, Carbona told ProPublica that he took the reins at BioLife in the aftermath of his mother’s death, determined to do something “significant” to fulfill her hopes for him. After an associate’s twins were born with SMA, he said he became convinced that Kaspar’s gene therapy was the answer.

Carbona remade BioLife into AveXis: Av for adeno-associated virus serotype 9, the engine of Kaspar’s drug; ve for vector; X for the DNA helix; and Is for Isis, the goddess of children, nature and magic.

Still, for much of the next year and a half, money from charities and more than $2.5 million from the National Institutes of Health remained Kaspar’s bread and butter. In late 2012, Sophia’s Cure agreed to provide another $550,000 for a Phase 1 clinical trial. The Nationwide Children’s Hospital Foundation, an affiliate of the hospital, agreed to match it.

Kaspar singled out Sophia’s Cure for the extent of its support in a Nationwide press release.

“Sophia’s Cure Foundation has been the lead funder of this program and their incredible investment in this lab has accelerated our program by many years,” he said.

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