Novartis said Wednesday that it would not charge for its newly approved cellular immunotherapy, tisagenlecleucel (Kymriah)—the first so-called CAR-T product to ever come to market—if it fails to help patients within a month. If the cell therapy, approved for kids with leukemia who have run out of other options, starts to work within a month, Novartis will charge $475,000, which doesn’t include associated costs such as hospital stays and emergency treatment for side effects.
The no-charge promise didn’t assuage critics of the price. “While Novartis’ decision to set a price at $475,000 per treatment may be seen by some as restraint, we believe it is excessive,” David Mitchell of Patients For Affordable Drugs wrote in a blog post yesterday. “Novartis should not get credit for bringing a $475,000 drug to market and claiming they could have charged people a lot more.”
Novartis officials Wednesday positioned the price as a discount compared to the standard of care bone marrow transplant.
The one-month cutoff also raises questions. In clinical studies CAR-T therapies have worked like gangbusters at first before fading after a few months. So why draw the line at one month? A Novartis spokesman provided this answer via email: “In order for us to establish an outcomes based approach, we need to be in line with the clinical endpoints in our label. Additionally, we believe it is important to be in line with the billing and reimbursement processes of our stakeholders.”
The label is an official document, released by the FDA, containing everything about a drug from side-effect warnings, to dosing instructions, to the clinical data that drove its approval.
The initial data for Novartis’s cell therapy are indeed in the label. The details: 52 of 63 patients (83 percent) saw their cancer disappear within three months. The remission began for most of them between 26 and 31 days post-treatment.
Novartis has also reported longer-term outcomes, but those are not in the label. Of all patients who responded in the first month, 25 percent ended up relapsing in the first six months. By the one-year mark, the relapse rate grew to 36 percent.
Those are still significant results for these patients, who are pretty much at the end of the road if the CAR-T therapy doesn’t work. But even if the data hold up in the “real world”—beyond the controlled settings of clinical trials—it means that Novartis is going to get paid for a lot of treatments that stop working after several months. (Approved drugs often fare more poorly on the market than in clinical studies, a phenomenon known as the efficacy-effectiveness gap.)
Just because an outcome is not described in a drug’s label, however, doesn’t mean it is off-limits for setting prices. Amgen (NASDAQ: AMGN) has said it would give money back to insurers if eligible patients taking its anti-cholesterol drug evolocumab (Repatha) have a heart attack or stroke. As Peter Bach, the head of Memorial Sloan Kettering’s Center for Health Policy and Outcomes, points out, evolocumab is not approved to prevent heart attacks or strokes, technically. It is approved to lower levels of “bad” LDL-C cholesterol.
But Bach, who is skeptical that outcome-based pricing will save patients money, said Novartis, by sticking to what is in the label, is being consistent: “Novartis is a relatively conservative company [and] has said publicly that [it] would not cross this line” of using data beyond the label to determine pricing.
Bach also told Xconomy that it was a positive sign that Novartis has made public the “one-month” cutoff, a step toward transparency that other drug companies have not taken. Another potential positive step: Novartis said yesterday that tisagenlecleucel might have a different price altogether for other types of cancer, an acknowledgement that the benefit to patients could vary depending on the disease. Sometime this year, Novartis will ask the FDA to approve tisagenlecleucel for a severe form of non-Hodgkin lymphoma in adults.