A transformative genetic treatment for a rare, inherited form ofblindness will come with a price tag of of $425,000 per eye, or $850,000for both, said Spark Therapeutics Inc., the tinybiotechnology company that is bringing the therapy to market.

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Since Spark’s Luxturna was approved by the U.S. Food and DrugAdministration last month, speculationover the price has grown as it became clear the therapy would beone of the first in a wave of medicines that yield remarkableresults after a single treatment -- and would carry a commensurate cost.

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In a novel arrangement, Spark will offer discounts based onwhether or not the drug works initially and remains effective forthe estimated 1,000 to 2,000 patients in the U.S. with a type ofinherited retinal disease caused by a mutant gene.

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“We believe that this price reflects not only the breakthrough,life-altering value of one-time Luxturna, but it will enable us tocontinue to invest and build on the revolutionary science thatsupports not only Luxturna but the rest of our pipeline,” ChiefExecutive Officer Jeff Marrazzo said in a phone interview.

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Spark shares rose 1 percent to $53.85 at 9:33 a.m. in NewYork.

New way to pay

The company’s effectiveness-based discount is sharply differentfrom how most drugs are currently sold. Health insurers are alsoused to paying for medicine over the course of a disease or over apatient’s life, in the case of some chronic conditions.

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A one-time treatment presented a challenge, since the cost wouldbe paid for by one insurer or government, only to have others reapthe benefits when the patient changes coverage.

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To help mitigate that dynamic, Spark is rolling out severalprograms to spread out the cost over the years or give rebates topayers if the benefits wane with time.

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For example, the company said it’s discussing a program with theU.S. Centers for Medicare & Medicaid Services that would spreadpayments for Luxturna over several years, even though the therapywould be given only once. It didn’t say how many installments wouldbe made, or how long it would take to pay the full cost of thedrug.

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In an agreement with the Boston-area insurer Harvard PilgrimHealth Care, Spark will get the full price of treatment up front.If patients don’t get an immediate benefit -- measured at 30 days,or a long term one -- measured at 30 months, Spark will have togive some of the money back in a rebate.

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Spark has also proposed selling the gene therapy directly toinsurance companies or specialty pharmacies. That would sidestepthe current process that requires hospitals or health careproviders to buy expensive therapies upfront. Spark is working withExpress Scripts Holding Co. on such anarrangement, and said it’s talking with other drug plans.

‘Revolutionary product’

Express Scripts has been a frequent critic of costly drugs, yetsaid that the Spark treatment is an exception.

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"Many people were anticipating this would be more than a milliondollars" said Steve Miller, the St. Louis-based company’s chiefmedical officer. “In the end, this is a revolutionary product, andI think in most plans this will be covered.”

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Spark’s biggest challenge may be finding patients to treat.

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Of the few thousand people with the disease, only a few haveactually been tested and confirmed to have it, since there was nocure, and thus little use in diagnosis. Many with more advancedforms of the disease won’t qualify for treatment, according to thecompany.

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