1:25 PM
 | 
Jan 11, 2018
 |  BioCentury  |  Strategy

Leading by example

Why Novartis may adopt indication-based pricing for Kymriah

A third-party cost-effectiveness analysis of CAR T therapies Kymriah tisagenlecleucel and Yescarta axicabtagene ciloleucel suggests that Novartis AG may need to price Kymriah differently for its second indication. Fortunately, the pharma is already discussing such a plan with payers.

In a draft report issued on Dec. 19, the Institute for Clinical and Economic Review (ICER) concluded that both Kymriah and Gilead Sciences Inc.’s Yescarta are priced in line with their long-term benefits in the indications for which they are approved.

Kymriah is approved to treat relapsed, refractory pediatric B cell acute lymphoblastic leukemia (ALL). It has a wholesale acquisition cost (WAC) of $475,000, including the cost of leukapheresis. Under an outcomes-based deal with CMS, the pharma is paid only for patients who are in remission one month after treatment.

Based on a complete remission rate of 63% in clinical trials and ICER’s calculation that Kymriah would provide 7.18 more quality-adjusted life years (QALYs) than clofarabine, the group concluded the CAR T product had an incremental cost per QALY of $57,093 under the current the pay-for-performance deal. The complete remission rate is based on an intent-to-treat (ITT) analysis performed by ICER.

Without the pay-for-performance deal, the incremental cost per QALY was $65,444.

ICER generally considers therapies to be cost effective at a cost per QALY up to $150,000.

Yescarta is approved to treat adult patients with relapsed or refractory large B cell lymphoma, including diffuse large B cell lymphoma (DLBCL), after two or more lines of systemic therapy. Yescarta was launched at a WAC of $373,000, excluding leukapheresis, and Gilead has not disclosed any pay-for-performance deals. The biotech did not comment on whether it would consider such deals in the future.

Given the therapy’s complete remission rate of 47% and ICER’s calculation that Yescarta would provide 3.59 more QALYs than salvage chemotherapy regimens that included rituximab, its cost per QALY was $145,158, absent any outcomes-based arrangement (see “A CAR T of QALYs”).

“When drugs have a significant impact on the length of life and/or...

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