| Today's Managing Health Care Costs Number is $475,000 |
Personalized medicine is here - and it's a miracle. Novartis' newly-approved drug Kymriah is genetically engineered immune cells from the patient which will kill leukemia cells, and it's shown remarkable efficacy in small trials. One girl was dying of leukemia five years ago and remains in remission, and gave stirring testimony for the drug's approval before the FDA last month. (Photo of Emily Whitehead, above, is from the Associated Press via the NY Times)
This is just the beginning - training one's own immune cells to fight cancer (and possibly other diseases) holds enormous promise. The cost: $475,000 for the one-time treatment.
Here are the reasons we shouldn't worry about that eye-popping cost
- $475,000 is a small price to pay for a cure of an otherwise fatal disease- especially in a kid. With a life expectancy of 70 years, this could mean the cost per Quality Adjusted Life Year (QALY) is under $7000.
- The drug has been approved for a rare cancer- with under 60 people likely to be eligible each year. If all of them responded and paid full price, that's under $30 million. Putting this in perspective, this is 0.0008% of national health care expenditures.
- Novartis will restrict use to just 30-35 centers, so we won't have unqualified physicians prescribing this willy-nillly. The engineered cells can cause life-threatening reactions - so this is an important safety measure
- Novartis has promised refunds if there is no response in 1 month, and has also promised financial assistance for families without insurance coverage
You can probably guess that I'm worried, though.
Kymriah is the first of a set of CAR-T therapies - and there are a gaggle more on the way. Some of them will be used for much more common conditions, and even Kymriah is likely to be used much more widely than the FDA-approved indications. Gilead Pharmaceuticals just paid $11 billion for Kite, a cancer therapy company that has a CAR-T therapy tailored to non-Hodgkins Lymphoma expected to be approved in the next year. The cost is likely to be similar, and the market larger. The total cost for CAR-T therapies will likely rise to many billions in just a few years.
Novartis has broken yet another price ceiling -and this will make it easier for the prices of other oncology medicines to continue to rise. See this post for how this works with Multiple Sclerosis drugs.
Refunds for non-efficacy sound good in theory - but are often ineffective in practice. This research showed "such schemes have poorly contributed to the fulfillment of the purpose in Italy, producing a trifling refund."
Financial assistance programs have largely been focused on maintaining price discipline - and have helped contribute to pharmaceutical company bottom lines by increasing revenue from other payers and offering the pharmas favorable tax treatment.
These genetically engineered cells will never be produced by a generic company - and are unlikely even to be produced as biosimilars for a long time if ever. So if very high prices "stick," we should expect to pay them for the foreseeable future.
We should celebrate - this is an enormous feat of American medicine. The initial research was performed at the University of Pennsylvania - but this drug would never had made it to market without the investment, trials, and regulatory work done by Novartis.
But we need to address drug prices if we are to control health care costs, and the high price set for Kymriah is a bad omen.
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