by Natalie Morrison
LONDON, Aug 31 (APM) - Novartis’ newly approved CAR-T cell therapy Kymriah (tisagenlecleucel) is set to cost $475,000 per treatment in the U.S., which has experts debating whether this is cheap or expensive.
The Swiss pharma giant on Wednesday won the race with Kite Pharma - bought for $11.9 billion on Monday by Gilead (APMMA 54431) - to have the first CAR-T (chimeric antigen receptor T cell) drug approved (APMMA 54476).
Several major news outlets - including the BBC, Financial Times and Forbes - reported on a Novartis investor call citing the cost of the children and young adults’ acute lymphoblastic leukaemia (ALL) therapy as $475,000 per treatment.
For some commenters, the price is too high - especially when compared to other ALL drugs such as Pfizer’s CD22-directed antibody-drug conjugate Besponsa. Reuters reported on August 17 that Besponsa has a list price of $168,300 based on typical treatment duration
However, others take into account the potentially paradigm-changing nature of CAR-T therapy, which targets patients who are refractory to treatment or have relapsed at least twice, a group with limited treatment options and extremely poor prognosis.
Efficacy results in clinical testing have been powerful, with around 83% of the 63 evaluable participants in the Phase II ELIANA paediatric trial cancer-free (in complete remission) within three months of infusion.
The study’s lead Stephen Grupp of the University of Pennsylvania told Forbes earlier studies suggest around 60% would remain in remission after a year.
As a therapy manufactured from the patients’ own cells - known as autologous production - there is also a safety advantage in that Kymriah is more likely to be accepted by the body than a chemical drug or a biologic therapy from a different organism, experts say.
Cheaper than expected
A Yahoo Finance analysis on Wednesday said the unprecedented efficacy of the drug means the market considers the price tag relatively cheap, noting that it is lower than original analyst estimates. Wall Street guesses reached as high as $750,000 per dose.With the expense of autologous manufacturing - which includes the logistics costs of harvesting cells, cryopreserving them, sending them to Novartis’ single New Jersey facility for processing and returning them to patients in 32 locations around the U.S. - commenters also say the therapy will not be a big revenue generator for the company at $475,000.
Analysts price the cost of goods at roughly $200,000 per patient, the Financial Times reported, which is purely cost of manufacturing - not taking into account a lengthy and complex development process for Novartis.
“We have spent a considerable amount of money bringing this therapy to market through development and through the manufacturing process, investments which we have not disclosed but which dwarf anything the government has invested through NIH grants,” Novartis CEO Joe Jimenez was quoted as saying in Forbes, adding that bringing Kymriah to market cost Novartis more than $1 billion.
Pay for success
Even considering the relatively lower margin potential on the therapy than original estimates, Novartis may not get paid immediately - or at all - in some cases, after agreeing a ‘pay for success’ scenario with United States Centers for Medicare and Medicaid Services (CMS).As part of a “novel collaboration” over value-based care, the company said on Wednesday it has agreed that payment for paediatric and young adult ALL patients should only be made when they respond to Kymriah by the end of the first month.
Other value-based approaches related to future indications for Kymriah and other CAR-T cell therapies are under discussion, Novartis said. The outcomes-based pricing model agreed with CMS is a “first-of-its-kind collaboration with a technology that has the potential to transform cancer care,” said Jimenez.
Novartis has also reportedly hinted it was restrained in pricing the drug, which it could have charged a lot more for.
It is now planning additional filings beyond the U.S. and Europe - where approval is pending - in 2018, it said. It noted it also plans additional Kymriah filings in the U.S. and Europe later this year, including for adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL).
Unwillingness to pay
Nevertheless, there still remains some opposition to high-drug costs on the patient side. The Financial Times quotes president of Patients For Affordable Drugs David Mitchell as saying: “While Novartis’ decision to set a price at $475,000 per treatment may be seen by some as restraint, we believe it is excessive.”He added: “Novartis should not get credit for bringing a $475,000 drug to market and claiming they could have charged people a lot more”.
Mitchell, a cancer survivor, added that the campaign group believed a price below $300,000 would be more appropriate.
In Forbes, Grupp expressed general discomfort with the high cost of cancer treatment, but stressed he sees Kymriah as good value because it can eliminate the need for a bone marrow transplant for children, which is equally expensive and often does not save lives.
“For an individual patient or even an individual insurer, this is not a bad way to spend that money compared to a lot of other ways we spend money for treatment,” Grupp said.
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