David Augus and and Dana Goldman weigh in on Novartis’ decision to price their new chimeric antigen receptor T-cell (CAR-T) therapy known as Kymriah (tisagenlecleucel). The treatment represents ground-breaking technology, but is priced at $475,000 per treatment. But the authors note that there is something else novel about this technology:
There was another announcement from another government agency, the Centers for Medicare and Medicaid Services (CMS). But it also could have far-reaching impact on how we pay for—and ultimately treat—cancers of all kinds. CMS would cover Kymriah’s announced price of $475,000 for the treatment. That grabbed headlines, but in the long run it does not compare to the other part of the announcement from CMS. For the first time the agency agreed to a payment plan which is dependent on whether the drug actually produces a benefit to the patient. Novartis will get paid $475,000 only if patients respond to the drug by the end of the first month of therapy
One key point the authors make is that pharmaceutical firms in the past have been incentivized to treat chronic diseases since they get paid per dose. However, if payment is tied to value, one-time use cures–such as Kymriah has the potential to be–could become an attractive investment option for researchers and patients may see more treatment cures in the coming years.
It only costs that much because someone is willing to charge that much. Money is relative. How much did it cost to develop?