Novartis's US$475,000 cancer breakthrough heralds new era of cures

Washington

THE approval of Novartis's breakthrough therapy for a deadly form of leukaemia opened the door to a new class of treatments even as its US$475,000 price tag reignited the debate on how to value potentially life-saving drugs.

Demonstrating its willingness to clear medicines faster, the US Food and Drug Administration on Wednesday approved a radical new one-time treatment from the Swiss drugmaker, weeks earlier than expected. The move heralds acceptance of a promising, potentially curative approach to cancers, genetic diseases and other severe disorders.

The Novartis drug, which will be sold under the name Kymriah, was approved on the condition that the drugmaker continue to track the patients who get it for another 15 years.

"We're entering a new frontier in medical innovation with the ability to reprogram a patient's own cells to attack a deadly cancer," FDA commissioner Scott Gottlieb said.

The therapies, known as CAR-T, raise a host of questions for doctors, patients, manufacturers and regulators, including who will receive the treatments and how to pay for them. Novartis is attempting to address the pricing question with a new type of agreement: for patients whose care is covered by US government programmes, the company will only get paid if patients show signs that the treatment is working within a month of getting it.

"This will support sustainability of the healthcare system and patient access while allowing a return on our investment," Bruno Strigini, chief executive officer of oncology for Novartis, said on a call.

The Basel, Switzerland-based company is wading into a new arena of performance-based pricing, said Sam Fazeli, a Bloomberg Intelligence analyst. "We're not used to drugs curing people" of major diseases such as cancer, he said. "It's a paradigm shift."

Shares of Novartis rose 0.8 per cent to 79.85 Swiss francs as at 10:07 am in Zurich trading. The stock has risen 7.7 per cent in the past year.

The US healthcare system has grappled with the pricing issue before. In 2013, Gilead Science introduced an US$84,000 cure for the viral disease hepatitis C, prompting a nationwide debate over drug costs. And new cancer treatments that have greatly extended some patients' lives can cost US$150,000 a year.

Yet, the almost half-million-dollar price tag on the Novartis CAR-T drug is a new benchmark, and more are likely to follow, with similar new therapies for blindness, blood disorders and other cancers. Spark Therapeutics's gene therapy for a genetic disorder that causes childhood blindness is expected to get an agency decision by January.

There are more than 600 gene and cell therapies in clinical trials today, according to Mark Trusheim, a strategic director at the Massachusetts Institute of Technology's Center for Biomedical Innovation. Those that make it to approval are likely to come with similar costs, in part because of the complex manufacturing process required to make these treatments.

"Gene therapies are different because you're treated once and then you're done, as compared to regular drugs where you take them every month or every day," Mr Trusheim said. "There's no mechanism for the developer to get paid every month, so the price points start to look pretty high."

He called Novartis's arrangement to pay only if patients respond to the drug a "huge breakthrough". Others, such as Peter Bach, director of Memorial Sloan Kettering's Center for Health Policy and Outcomes, see the industry's prices creeping higher with no end in sight. "We have gotten so comfortable with these numbers that are just beyond belief for these agents. And this is a highly profitable sector," said Mr Bach, who studies drug prices. "They just continue to move the goal posts" about what is reasonable. BLOOMBERG