7 September 2018

CAR-T Therapies and the Challenge of Pricing Research

NHS England has become the first EU country to approve a full access deal for one of the two approved CAR-T therapies. Funding approval of Novartis’ Kymriah was the fastest in NHS history and came just days after the agency rejected Gilead/Kite’s CAR-T Yescarta for being “too expensive”. In the US, where CAR-T has been available since 2017 the pricing of the drugs has been a contentious issue, not just because of the list price but also the associated healthcare expenses.

Named ASCO’s 2018 Advance of the Year, CAR-T is a new and unique method to treat otherwise incurable cancers. Autologous chimeric antigen receptor (CAR)-T cell therapy uses the patient’s own white blood cells (T cells) which are genetically reprogrammed in the laboratory to attack the patient’s tumour cells.

To date, two CAR-T therapies have been approved by the FDA and EMA. Novartis’ Kymriah was first approved by FDA in August 2017 for ALL in relapsed or refractory pediatric and young adult patients and has since been approved for adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of treatment. Gilead/Kite’s Yescarta was approved by FDA in October 2017 for the treatment of several types of relapsed or refractory large B-cell non-Hodgkins lymphoma, including DLBCL.

A number of other players have assets in development including Celgene’s Juno acquired JCAR017 and Bluebird’s bb-2121 and bb-21217. Allogene also recently raised $120M for continued development of an ‘off-the-shelf’ version which uses donor cells and is intended for multiple patient types.

Whilst CAR-Ts undoubtedly provide important clinical benefits, they are some the most expensive cancer therapies ever marketed reflecting the increased benefit but also the decades of clinical investment. This pricing has been a controversial topic in US with Kymriah’s $475,000 and Yescarta’s $373,000 price tags.

In addition, patients and the healthcare services are required to pay for auxiliary services such as hospital stays, supportive care or physician visits. These supportive costs were highlighted in a April JAMA Oncology article. In the article, Dr Samuel Silver of the University of Michigan Comprehensive Cancer Center suggested that the total cost for these therapies is at least $750,000. This figure includes $400,000 to $450,000 made up of non-drug costs, effectively doubling the cost of the therapy.

As more indications are approved for CAR-T therapies, and thus the eligible patient population increases pricing and reimbursement challenges are likely to be heightened. Differing pricing models have been floated in US. Novartis made an outcomes-based agreement with the Centers for Medicare & Medicaid Services (CMS) in which Novartis will only bill for patients who have not responded within the first month of treatment. Clinical data has shown that the majority, ~80%, will have an initial response to the therapy. It is therefore highly likely that Novartis has offered a similar deal to NHS England.

For market research, high value innovative products raise an interesting challenge for pricing research. Methodologies using open ended questions such as PSM is likely to produce unusable data as respondents hugely underestimate the manufacturer’s expected price range.

Conjoint remains a useful tool to capture and force trade-offs between willingness to pay and clinical value. However, more so than in other projects, the comparator products, attributes and levels need to be carefully chosen. It is therefore essential for novel therapy research to include a comprehensive qualitative initial phase to truly understand the value drivers which are likely to be used to assess therapy benefit by payers and practitioners. Whilst, this additional stage does add to research budget and timelines, the output will be much richer in insight and ensure effective competitor modelling. As personalised cancer vaccines move closer to market approval research methodologies such as this will provide crucial input to market launch strategies.