5:59 PM
Sep 01, 2017
 |  BioCentury  |  Strategy

Pathfinding for access

Novartis’ pathfinding value-based deal with CMS for CAR T therapy Kymriah

A pact with the Centers for Medicare & Medicaid Services for Novartis AG’s CAR T therapy demonstrates leadership in new value-based drug pricing models.

Kymriah tisagenlecleucel represents a milestone for three reasons. Its approval by FDA on Aug. 30 was the first for a chimeric antigen receptor T cell therapy. It was the first therapy to show a durable response in pediatric and young adult patients with relapsed, refractory B cell acute lymphoblastic leukemia (ALL) who are out of options.

And it is the first pharmaceutical for which CMS has done a pay-for-performance deal.

The treatment’s novelty and exceptional efficacy, coupled with hypothetical cost-effectiveness calculations by the U.K.’s NICE and others, led analysts to expect a price tag in the neighborhood of $500,000-$750,000.

But Novartis set the list price for the one-time treatment at $475,000 and said it would not collect payment for patients covered by CMS who do not have a response within the first month.

The pharma also said it will provide assistance for food, lodging and travel expenses for the patient and up to two caregivers to mitigate the impact of the company’s decision to restrict initial distribution to 30-35 centers.

“If there were an indication-based pricing, it might lead to a lower price.”

Bill Hinshaw, Novartis

CEO Joe Jimenez said on an Aug. 30 media call that the CMS deal “will streamline delivery, reduce the costs for Medicaid programs and ensure timely access.”

The fact that Kymriah is launching with CMS coverage suggests that’s true. On average there is a six-month delay between launch and coverage under Medicare, and for prostate cancer treatment Provenge sipuleucel-T, the first autologous cell therapy approved in the U.S., it took about a year. Similar delays are seen in Medicaid.

The contract includes patients covered by Medicaid and the Children’s Health...

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