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Representatives Probe CMS for Further Detail on New CAR-T Therapy Payment Agreement

Christina Mattina
After CMS and Novartis devised an outcomes-based payment approach for the new chimeric antigen receptor (CAR)-T treatment tisagenlecleucel (Kymriah), a group of representatives are requesting more information on the specifics of the agreement.
After CMS and Novartis devised an outcomes-based payment approach for the new chimeric antigen receptor (CAR)-T treatment tisagenlecleucel (Kymriah), a group of representatives are requesting more information on the specifics of the agreement.

“As members strongly concerned with both rising prescription drug prices and the need to protect taxpayer access to therapies developed with public funding, we are watching closely the discussion around pricing for this treatment,” the letter to CMS administrator Seema Verma read. It was signed by a group of 9 Democratic members of the House of Representatives.

Novartis had first trumpeted the “groundbreaking collaboration” with CMS in its press release announcing the FDA’s approval of Kymriah. It indicated that pricing would be based on indications and outcomes, and that CMS would only pay for the immunotherapy treatment if the approved patients, pediatric and young adults with acute lymphoblastic leukemia, respond to Kymriah within their first month of therapy.

The representatives acknowledged that Kymriah, the first CAR-T therapy approved in the United States, “is a promising treatment that may benefit cancer patients,” but noted that it will only be effective if patients in need are able to afford it, considering the estimated $475,000 price tag. They also cited concerns about the $200 million in taxpayer funding used to finance the therapy’s development.

The letter included 14 questions for Verma on how CMS developed the outcomes-based payment equation for Kymriah. It asked for an explanation of payment mechanisms, details on data collection, and estimates on the number of patients who would be eligible, as well as how exactly a successful response would be defined. There were also questions about whether any of the CMS political appointees who had developed the agreement had ever worked for Novartis or elsewhere in the pharmaceutical industry.

CAR-T therapy is individualized by genetically modifying each patient’s T cells to include the CAR gene, then infusing them back into the patient, allowing the cells to target and kill leukemia cells. This customization costs around $20,000 per patient, but that price may decline as production is ramped up, according to Carl June, MD, a CAR-T researcher quoted in the letter. Considering this estimate, the representatives asked Verma how Novartis’ profit margin equates to a fair deal for taxpayers.

“We look forward to the opportunity to learn more about how CMS established this outcomes-based payment agreement and how it will be enacted,” the letter concluded. “We look forward to your reply and your continued engagement as the conversation around outcomes-based pricing moves forward.”

A CMS statement on the payment arrangement released at the time of Kymriah’s approval indicated its enthusiasm for novel payment models like outcomes-based pricing, particularly for innovative but costly therapies like CAR-T treatment, but did not provide further details on the Novartis agreement.

“Improving payment arrangements is a critical step towards fulfilling President Trump’s promise to lower the cost of drugs,” Verma said in the statement.

Two of the representatives who signed the letter, Peter Welch, D-Vermont, and Elijah Cummings, D-Maryland, met with President Donald Trump in March to discuss the high cost of prescription drugs. Cummings praised the president for being “aware of the problem” and “enthusiastic” about solutions like allowing Medicare to negotiate prices.

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