(Reuters) - The proposed price for Spark Therapeutics Inc's ONCE.O groundbreaking one-time gene therapy for a rare form of blindness is far too high, an independent U.S. nonprofit organization that evaluates clinical and cost effectiveness of new medicines said on Friday.

Patients receive eye exams in a file photo. REUTERS/Mario Anzuoni

Spark announced that its recently approved treatment, Luxturna, would carry a list price of $850,000, or $425,000 per eye, for a form of blindness that affects only 1,000 to 2,000 people in the United States.

Despite strategies proposed by the company, such as stretching payment over several years and refunds if the treatment fails, the Institute for Clinical and Economic Review (ICER) said Luxturna in most cases should cost about 50 percent to 75 percent less than the proposed price.

“We believe it’s a scientific milestone, but that for the majority of patients being treated, the cost is not in line with what’s considered cost-effective,” ICER Chief Medical Officer David Rind said.

Spark shares were down 1.8 percent at $53.09.

The report comes at a sensitive time for Spark as it negotiates payments and reimbursement with the government and private health insurers ahead of a planned March launch of the therapy.

Companies developing gene therapies for other conditions are also looking to Spark for indications on what pricing will be deemed acceptable.

The long-term benefit of Luxturna remains unknown. Assuming a 10- to 20-year benefit, the treatment failed to meet cost-effectiveness thresholds, ICER said.

Considering only direct healthcare system benefits with a patient treated at age 15, Luxturna should be priced 75 to 82 percent lower, or between $153,000 and $217,000, ICER said.

However, taking into account the many benefits and cost savings of regaining vision to society, such as greater productivity and reduced caregiver burden, ICER figures the price should be about $400,000.

“For a condition like blindness, a lot of the benefits and impact is outside the healthcare system,” ICER founder Steve Pearson said.

Pricing needs to be set “in a way that will be sustainable and affordable,” he added.

If a child of three were to receive the therapy and it lasted long-term - a best-case scenario - the value of Luxturna does approach $850,000, Pearson said.

While ICER often recommends significantly lower pricing for expensive new medicines, it said the cost of the two new CAR-T cancer therapies that genetically modify a patients' own immune cells was appropriate. Those one-time treatments from Novartis NOVN.S and Gilead Sciences GILD.O carry list prices of $475,000 and $373,000.