The Sinister Side Effect of Amazing New Cancer Drug: One Dose Costs Nearly $500K

On Wednesday, the U.S. Food and Drug Administration on Wednesday approved a new cancer therapy developed by the pharmaceutical company Novartis that experts hope may revolutionize the way doctors treat cancer--but the half-million dollar price tag has sparked a national conversation the costs of life-saving treatments.

In a clinical trial of this CAR-T cell therapy--which will hit the market as "Kymriah"--83 percent of children with acute lymphoblastic leukemia were cancer free after just three months and one dose.

"This is an amazing therapy, but there has to be a limit at which point companies can no longer charge desperate patients, or taxpayers, enormous sums."
--Dr. Walid Gellad, University of Pittsburgh

"The therapy," STAT reports, "is made by harvesting patients' white blood cells and rewiring them to home in on tumors. Novartis's product is the first CAR-T therapy to come before the FDA, leading a pack of novel treatments that promise to change the standard of care for certain aggressive blood cancers."

"We're entering a new frontier in medical innovation with the ability to reprogram a patient's own cells to attack a deadly cancer," said FDA commissioner Scott Gottlieb. "New technologies such as gene and cell therapies hold out the potential to transform medicine."

But at what cost?

The price for one treatment set of Kymriah is at $475,000, which does not include any doctors' fees or additional bills for time spent at the hospital, meaning the end cost could be much higher. That is actually lower than anticipated--Wall Street analyst predicted as high as $750,000 per dose, and U.K. regulators said $700,000 "would be fair," STAT reports--but priced at nearly half a million dollars, the treatment has provoked a fierce debate about notoriously high costs for necessary, life-saving healthcare.

Despite Kymriah's success in the clinical trial, Walid Gellad, a doctor and professor at the University of Pittsburgh, suggested to Axios that treatments with undetermined effectiveness--even if they have the potential to save lives--shouldn't cost more than proven measures such as bone marrow or kidney transplants, adding: "This is an amazing therapy, but there has to be a limit at which point companies can no longer charge desperate patients, or taxpayers, enormous sums."

"While Novartis' decision to set a price at $475,000 per treatment may be seen by some as restraint, we believe it is excessive," said David Mitchell, founder and president of the advocacy group Patients For Affordable Drugs, and a cancer patient himself. "The drug pricing system in America is completely broken. Until policy in this country changes, the vicious cycle of patients struggling under high drug prices will continue."

Mitchell's group calculated that over $200 million in federal funding has been allocated to research related to the treatment, and Mitchell said, "Novartis has not acknowledged the significance of taxpayers' investment," but Novartis chief executive Joseph Jimenez insisted to Forbes' Matthew Herper that his company's undisclosed investments "dwarf anything the government has invested through NIH grants."

The pharma exec also told Herper he hopes the discussion about Kymriah's cost could lead to a change in the way patients are charged for life-saving treatments. Writing for Forbes, Herper reports:

Jimenez sees Kymriah as his chance to put into practice new ideas about drug pricing he has advocated for years as a solution to the pharmaceutical industry's bad reputation and unsustainably rising prices: "indication-based" or "value-based" pricing. Drugs, he says, should be priced on the value they bring to the healthcare system, and insurers and governments should pay based on whether the medicines work. That's why Novartis has approached the Centers for Medicaid and Medicare Services and insurers about schemes where only patients who have responded to Kymriah in a month will incur a charge, despite the high cost of administering the treatment.

Journalists who cover the pharmaceutical industry noted that Jimenez's endorsement of response-based payments is a big deal in the debate about healthcare treatment pricing, but even if the government negotiates a deal for those who rely on Medicare and Medicaid, for cancer patients with private insurance or no insurance at all, this and other life-saving treatments could still remain out-of-reach.

High costs are already impacting cancer patients across the U.S. Recent analysis by Kaiser Health News found that because of continuously increasing costs for cancer treatments, "hundreds of thousands of cancer patients are delaying care, cutting their pills in half, or skipping drug treatment entirely."

And although there are more than 600 gene and cell therapies in clinical trials today, according to Bloomberg Technology, future treatments that resemble Kymriah, for different types of cancer and other diseases, are expected to come at similar or even higher costs.

Peter Bach, the director of Memorial Sloan Kettering's Center for Health Policy and Outcomes, who studies drug prices, told Bloomberg he see the industry's prices increasing with no end in sight.

"We have gotten so comfortable with these numbers that are just beyond belief for these agents," Bach said. "And this is a highly profitable sector.... They just continue to move the goal posts" for how much companies can charge.