The U.S. Centers for Medicare and Medicaid Services (CMS) has stepped away from a potential pilot program for “indication-based” pricing for tisagenlecleucel, a chimeric antigen receptor (CAR) T-cell therapy for the treatment of acute lymphocytic leukemia and diffuse large B-cell lymphoma.
Novartis (the manufacturer of tisagenlecleucel) decided to set an indication-based pricing for this product after considered its clinical value to patients, arriving at a list price of $475,000 for the pediatric ALL indication and $373,000 for the diffuse large B-cell lymphoma indication.
With the pilot program, CMS was exploring whether it would potentially reimburse treatment centers for CAR T-cell therapies based on the indication and the indication-based price. However, representatives from Novartis stress that, “even if CMS is not pursuing the indication-based reimbursement pilot, it will not prevent a treatment center from getting reimbursed for tisagenlecleucel by Medicare or Medicaid.”
Previoulsy, the agency entered an outcomes-based payment arrangement with Novartis to mitigate concerns over the drug’s $475,000 list price. The model noted that CMS would not pay for tisagenlecleucel when used to treat pediatric patients with ALL unless patients responded to treatment within a one-month timeframe. This agreement is the first instance of CMS paying for treatments based on patient outcomes, a key point in President Donald Trump’s plan to lower prescription drug costs. Because these plans ensure that drug manufacturers only get reimbursed when patients experience positive outcomes, pharmaceutical companies are incentivized to create and sell only the most effective treatments, according to the administration’s plan.
However, the outcomes-based plan drew scrutiny from CMS and members of Congress, who contend that the model was too favorable to Novartis. Critics claimed that the one-month timeframe, in particular, could not be used to judge the success rate of a therapy; many patients treated with CAR T-cell therapies experience relapse up to one year or more after appearing to respond to treatment.
Though CMS pulled out of the pilot program, the agency is not giving up on its quest to lower drug prices through new models of payment, according to CMS Administrator Seema Verma, MPH. In a letter to Congress, she wrote that the agency is still “exploring the design of an innovative payment model that would involve value-based payment for prescription drugs.”
Source: Politico, July 9, 2018.