The world's most expensive drug has been approved for treating spinal muscular atrophy (SMA) in infants, with the one-off treatment costing a record $US2.125 million ($3.068 million).

Key points: The drug costs a little more than $3 million

The drug costs a little more than $3 million It is designed as a one-off treatment, which manufacturers say is cheaper than ongoing doses of other drugs

It is designed as a one-off treatment, which manufacturers say is cheaper than ongoing doses of other drugs Manufacturers have offered refunds if the treatment does not work

Manufactured by Swiss pharmaceuticals company Novartis, the gene therapy treatment Zolgensma will help combat the leading genetic cause of death in infants.

The US Food and Drug Administration (FDA) approved Zolgensma for children under the age of two with SMA, including those not yet showing symptoms.

"This is potentially a new standard of care for babies with the most serious form of SMA," paediatric neurologist Emmanuelle Tiongson said.

"The job now is trying to negotiate with insurers that this would be a long-term savings."

Costly one-off 'more valuable' than annual doses

Novartis executives defended the price, saying the one-time treatment was more valuable than expensive long-term treatments that cost several hundred thousand dollars annually.

Novartis touched off a debate over what gene therapy is worth last year, estimating its treatment would be cost-effective at up to $5 million per patient.

A review in April by an independent US group, the Institute for Clinical and Economic Review (ICER), concluded Novartis's value estimate for Zolgensma was excessive.

But on Friday, ICER said that based on Novartis's additional clinical data, the broad FDA label and its launch price, it believed that the drug fell within the upper bound of its range for cost-effectiveness.

Novartis will have to include side effect warnings on the label. ( AP )

Novartis said it was offering health insurers the option of instalment payments for Zolgensma as well as refunds if the treatment does not work and upfront discounts for payers who commit to standardised coverage terms.

What is spinal muscular atrophy?

SMA is a rare genetic disease caused by a mutation in the survival motor neuron 1 (SMN1) gene.

It often leads to paralysis, breathing difficulties and death within months for babies born with Type I, the most serious form.

"Children with SMA experience difficulty performing essential functions of life," director of the FDA's Center for Biologics Evaluation and Research Peter Marks said.

"Most children with this disease do not survive past early childhood due to respiratory failure."

The disease affects about 400 babies born in the US each year.

Symptoms can be apparent at birth, but may not be present until the age of six months.

Loading...

A life-saving drug?

Evelyn Villarreal was one of the first children treated, receiving the drug at eight weeks old.

Her mother, Elena Villarreal, lost her first child to spinal muscular atrophy at 15 months, and had Evelyn tested for the disease as a newborn.

She says the now four-and-a-half-year-old shows no muscle problems other than minor trouble standing up.

"She's very active and goes to the playground a lot," Ms Villarreal said.

"She's walking and even jumping."

It is too early to know how long the benefit of the treatment lasts, but doctors' hopes are rising that they could last a lifetime.

Novartis Chief Executive Vas Narasimhan described the drug as a near-cure for SMA if delivered soon after birth.

But data proving its durability extends to only about five years and the medicine cannot reverse damage already done.

The therapy uses a virus to provide a normal copy of the SMN1 gene to babies born with a defective gene.

It is delivered by infusion.

Evelyn, centre, responded well to the treatment. ( GoFundMe: Villarreal Family )

Treatment still being studied

Zolgensma was approved based on a series of clinical trials involving 36 patients aged two weeks to eight months.

The agency said patients treated with Zolgensma showed significant improvement in developmental motor milestones such as head control and ability to sit up.

However, Novartis is looking into whether the death of one severely ill baby treated with Zolgensma was related to the therapy.

The most common side effects of Zolgensma are elevated liver enzymes and vomiting.

The FDA is requiring Zolgensma's label to include a warning that acute serious liver injury can occur.

Wires