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With Approval of CAR T-Cell Therapy Comes the Next Challenge: Payer Coverage

Evidence-Based OncologyFebruary 2018
Volume 24
Issue 2

CAR T- cell therapies are among the most expensive ever invented. For now, there’s a lot of uncertainty, as both government and commercial insurers, and a handful of the nation’s leading cancer centers, navigate a reimbursement structure that truly has no precedent.

When the FDA approved the chimeric antigen receptor (CAR) T-cell therapy in August 2017, the news made headlines around the world: in this process, a patient’s own genetically modified T-cells are engineered to express receptors that latch on to a specific cell surface protein, connecting them to cancer cells to be destroyed.1 Treatments for individual patients take weeks to create, to say nothing of the costs of care to receive the therapy or the millions to develop it.2

It all adds up to some of the most expensive therapies ever invented. The first CAR T-cell therapy, tisagenlecleucel (Kymriah)—a treatment for children and young adults with B-cell acute lymphoblastic leukemia (ALL) developed by Novartis—was priced at $475,000 for a one-time treatment.3 Axicabtagene ciloleucel (Yescarta), Kite Pharma/Gilead’s treatment for adult patients with relapsed or refractory large B-cell lymphoma, soon followed, priced at $373,000.4 Such ground-breaking therapies, with equally unprecedented prices, would clearly change the way payers did business.

Express Scripts’ chief medical officer Steve Miller, MD, did not hold back in a September blog post, saying the arrival of gene therapies would demand payment models “as novel as the medications themselves.”5 Critics of the cost of the Kymriah, writing in Health Affairs as Evidence-Based OncologyTM (EBOTM) went to press, said the issue of cost matters because CAR T-cell therapies are expected to receive FDA and overseas approval to treat many other blood cancers, including adult ALL, chronic lymphocytic leukemia, and diffuse large B-cell lymphoma. They argue Novartis should be charging only $160,000 per treatment, in part because so many millions in federal research funds helped spark CAR T-cell discoveries.6

For now, there’s a lot of uncertainty, as both government and commercial insurers, and a handful of the nation’s leading cancer centers, navigate a reimbursement structure that truly has no precedent. “Ideas on the table include paying for a treatment over time, establishing insurer risk pools and financing one-time payments,” Miller wrote. “A successful model must address patients who change insurers or employers, and tracking their health outcomes over time to ensure payments aren’t being made if the treatment stops being effective.”5

Aaron Chrisman, director for Stem Cell Transplant and Cellular Therapy Administration at the University of Chicago Medicine, told EBOTM in an email that the approval and reimbursement process is necessarily painstaking because of the nature of the treatment, not just its high cost. “Because each product is designed for a specific patient, the cells, millions of them, must be produced for 1 patient at a time,” he said. “It can take 2 to 4 weeks to insert the new, molecularly engineered receptor and grow the required number of cells.”

As Chrisman explained, once the customized treatment is returned to the hospital and infused, the modified T-cells multiply and set out to find and attack the cancerous B-cells. Other reports have told of serious short-term side effects, including disorientation and tremors,7 so beyond the cost of therapy itself are the hospitalization costs.

For those on the front lines, connecting very sick cancer patients with a potentially life-saving treatment takes the involvement of the highest levels of leadership at an institution. At this stage, “there is a tremendous amount of oversight in each case,” from the cellular therapy program itself, to managed care, revenue cycle, supply chain, and pharmacy among others, Chrisman said in the email. “This will hopefully lessen over time, but currently it requires a substantial investment in time in order to obtain approvals and to ensure payment happens in a timely and accurate fashion.”

Medicare and Medicaid

CAR T-cell therapy’s groundbreaking nature—and the learning curve involved for all stakeholders—makes information on reimbursement hard to pin down. On the day of the FDA approval, Novartis announced an outcomes-based arrangement with CMS, to “eliminate inefficiencies from the healthcare system,” with Kymriah as the first therapy subject to the agreement.8 In short, CMS won’t pay for those patients who fail to respond in the first 28 days of treatment.6 A person familiar with CMS reimbursement policy told EBOTM the following about Medicare reimbursement for CAR T-cell therapy, as of January 19, 2018:

  • CAR T-cell therapy treatment will only be reimbursed for hospitals or health systems for in inpatient and outpatient settings
  • Individual or small group practices will not be reimbursed. Those familiar with the treatment said this made sense due to the acute side effects that can occur.
  • Inpatient cost for CAR-T will be bundled into the total cost of inpatient stay. If Medicare’s payment does not cover costs, CAR T-cell treatment may qualify under the acute inpatient “outlier” Prospective Payment System (PPS)
  • As of January 1, 2018, Kymriah, which was the first CAR T treatment to be approved, has an outpatient code: ASP+6% for outpatient prospective payment ($503,500)
  • As of January 1, 2018, Yescarta did not have an outpatient code; it could be allocated a “not otherwise classified” code

For Kymriah, state-level Medicaid policies matter due to its pediatric indication. Over 2 months, EBOTM contacted the press office at Penn Medicine, the center for Kymriah’s clinical trials, but received no response to questions about reimbursement. Spokespersons for the New Jersey and Pennsylvania Departments of Human Services, which oversee Medicaid programs closest to Penn, said Kymriah and Yescarta were both covered on an inpatient basis only; in Pennsylvania, Medicaid will only reimburse for FDA-approved indications, not investigational uses.

When contacted by EBOTM, Eric Althoff, head of Global Media Relations, Novartis, referenced a Q-code approved for Medicare that became effective January 1, 2018, and said in an email “a number of state Medicaid programs have published Kymriah Medicaid policies,” but offered no specifics.

Commercial Coverage, Pharma Assistance

In emails to EBOTM, spokespersons for both Novartis and Gilead report progress in obtaining commercial coverage; Gilead reported that commercial payers would likely account for between 50% and 60% of Yescarta’s users, and thus far most commercial payers were willing to cover the treatment. The University of Chicago Medicine’s Chrisman said thus far, commercial coverage for CAR T-cell therapy has occurred through individual contracts. “This can be a long process depending on the payer,” he said. “However, we will try our hardest for the sake of all our patients.” As of late January, 4-5 patients were awaiting confirmation of coverage and payment terms at the institution.

Novartis’ Althoff said patient access programs are also available. “Novartis is committed to ensuring eligible patients have access to Kymriah,” he wrote. “This includes co-pay assistance and travel assistance for transportation and accommodations for eligible patients and up to 2 caregivers to support compliance with the safety monitoring period.”

Does the Novartis model need to go a step further, of having billing codes ready when these expensive therapies are approved? “This would likely shorten the time to therapies being widely used, and would certainly help reduce uncertainty around reimbursement and coverage for providers,” Chrisman said. “This would need to go beyond just the creation of billing codes; therapies like CAR T-cell include the product itself as well as a variety of inpatient and outpatient services.” The best bet, he said, would be figuring out how to bill for everything before, or very soon after FDA approval occurs.


  1. FDA approval brings first gene therapy to the United States [press release]. Silver Spring, MD: FDA Newsroom; August 30, 2017. fda. gov/NewsEvents/Newsroom/PressAnnouncements/ucm574058. htm. Accessed February 7, 2018.
  2. Szabo L. Cascade of costs could push new gene therapy above $1 million per patient. Kaiser Health News website. khn.org/news/ cascade-of-costs-could-push-new-gene-therapy-above-1-million-per- patient/. Published October 17, 2017. Accessed February 9, 2018.
  3. At $475,000 per treatment, is Novartis’ Kymriah a bargain, or just another example of skyrocketing prices? Fierce Pharma website. fiercepharma.com/pharma/at-475-000-per-treatment-novartis- kymriah-a-bargain-or-just-another-example-skyrocketing. Published August 31, 2017. Accessed February 6, 2017.
  4. Kite’s Yescarta (axicabtagene ciloleucel) becomes first CAR T therapy approved by the FDA for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after two or more lines of systemic therapy [press release]. Foster City and Santa Monica, CA: Business Wire; October 18, 2017. gilead.com/news/press-releases/2017/10/ kites-yescarta-axicabtagene-ciloleucel-becomes-first-car-t-therapy- approved-by-the-fda-for-the-treatment-of-adult-patients-with- relapsed-or-refractory-large-bcell-lymphoma-after-two-or-more- lines-of-systemic-therapy. Accessed February 6, 2017.
  5. Miller S. Gene therapy holds great promise, but big price. Express Scripts website. lab.express-scripts.com/lab/insights/drug-options/ gene-therapy-holds-great-promisec-but-big-price. Published September 21, 2017. Accessed February 6, 2018.
  6. Kleutghen P, Mitchell D, Kesselheim AS, Najafzadeh M, Sarpatwari A. Drugs won’t work if people can’t afford them: the high price of tisagenlecleucel [published online February 8, 2018]. Health Aff. 10.1377/hblog20180205.292531.
  7. Welch A. Considerations for CAR T-cell therapy in NHL. OncLive website. onclive.com/web-exclusives/considerations-for-car-tcell-therapy-in-nhl. Published January 19, 2018. Accessed February 9, 2018.
  8. Novartis receives first-ever FDA approval for a CAR T-cell therapy Kymriah (CTL019) for children and young adults with B-cell ALL that is refractory or has relapsed at least twice [press release]. Basel, Switzerland: Novartis; August 30, 2017. novartis.com/news/media- releases/novartis-receives-first-ever-fda-approval-car-t-cell-therapy- kymriahtm-ctl019. Accessed February 9, 2018.
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