US Congressman Lloyd Doggett (D-TX) and eight other Democrats in the US House of Representatives have written a letter to the US Centers for Medicare and Medicaid Services (CMS) asking for information on its outcomes-based payment approach for Novartis’ new chimeric antigen receptor T-cell (CAR-T) treatment, Kymriah (tisagenlecleucel). The drug was approved by the US Food and Drug Administration in September 2017 for treating certain pediatric and young adult patients with a form of acute lymphoblastic leukemia.

In support of the product, Novartis formed a collaboration with the CMS focused on improving efficiencies in current regulatory requirements to deliver value-based care and ensure access for the specific patient population for the drug. Novartis said that this approach is intended to include indication-based pricing for medicines and supports payments for a medicine, such as Kymriah for its initial indication, based on the clinical outcomes achieved, which would eliminate inefficiencies from the healthcare system. Other value-based approaches related to future indications for Kymriah and CAR-T cell therapies are under discussion. Novartis said it is further collaborating with CMS to make an outcomes-based approach available to allow for payment only when pediatric and young adult ALL patients respond to Kymriah by the end of the first month. Future potential indications would be reviewed for the most relevant outcomes-based approach.

In their letter, the Congressmen are seeking additional information on reimbursement regarding this outcomes-based payment approach. “Novartis announced that it is collaborating with the Centers for Medicare & Medicaid Services (CMS) on an outcomes-based payment approach, which may help defray the impact of the $475,000 price of this medication,” they wrote in the letter. “Reports indicate that Novartis and CMS have reached an agreement to only reimburse for Kymriah if patients respond by the end of the first month of treatment. However, we are seeking additional information about this approach and the process by which it was developed.”

In their letter, the Congressmen estimate that government funding of $200 million was used to develop the basic and translational science behind the CAR-T treatment. While Novartis purchased the exclusive global rights and contributed some additional resources, the Congressmen said that “American taxpayers’ investment in CAR-T must be acknowledged and reflected in the price.”  The letter further said that Novartis benefitted from the 50% orphan drug tax credit for clinical trials, which helped to offset the cost of approval and development. It also said that costs for producing engineered T-cells costs for the CAR T therapy is approximately $20,000 per patient, but that could become cheaper as the procedure is scaled up.

The Congressmen outlined a series of questions of the CMS relating to the outcomes-based payment approach. These questions related to the number of Medicaid and Medicare beneficiaries expected to be eligible for the treatment; payment by the federal government if a patient relapses; and success criteria, including how and whom develops such criteria.

Source: US Congressman Lloyd Doggett