Are CAR T-Cell Therapies Worth the Costs?

Frederick Locke, MD
Coleader of the Immunology Program, Moffitt Cancer Center
John K. Lin, MD
Abramson Cancer Center at the University of Pennsylvania

Since the first chimeric antigen receptor (CAR) T-cell therapies gained FDA approval in 2017, the one-time treatments have led to unprecedented response rates in patients with diffuse large B cell lymphoma (DLBCL) and B-cell acute lymphocytic leukemia (ALL). Of course, they also came with unprecedented price tags: List prices for tisagenlecleucel and axicabtagene ciloleucel are upwards of $373,000 for a single infusion. However, this amount does not account for the costs of manufacturing the product or managing potential long-term complications associated with treatment. Also, not all patients are cured; at least half will relapse and still require further lines of therapy.

Uncertainty about the true costs for administering these relatively new treatments are also tied to questions about reimbursement. In August 2019, the Centers for Medicare and Medicaid Services (CMS) issued a final rule that raises payments for new technologies, including CAR T-cell therapies, from 50% to 65%. For Medicare beneficiaries with lymphoma, that means that CMS will only reimburse $240,000 of the costs of administering tisagenlecleucel and axicabtagene ciloleucel. Though health care experts welcomed this decision, some expressed concern that it does not provide enough relief for hospitals.

In this edition of Drawing First Blood, ASH Clinical News asked Frederick Locke, MD, co-leader of the Immunology Program at Moffitt Cancer Center, and John K. Lin, MD, from the Abramson Cancer Center at the University of Pennsylvania, to answer the question, “Are CAR T-cell therapies for lymphoma worth their high costs?”

Frederick Locke, MD: We have two FDA-approved CD19-directed CAR T-cell therapies for the treatment of patients with DLBCL: axicabtagene ciloleucel and tisagenlecleucel. Prior to those FDA approvals, the standard treatment for lymphoma was – and still is today – a combination chemotherapy regimen, most commonly R-CHOP in the U.S. Depending on patient and disease characteristics, that first-line therapy can lead to long-term durable remissions in about 60% of people.

Unfortunately, for those whose disease progresses after frontline therapy, their odds aren’t so great. The chance of responding to any second-line salvage chemotherapy – typically, a dealer’s choice from many different combination chemotherapies – is approximately 50%. Those who respond can benefit from consolidation with high-dose chemotherapy followed by an autologous hematopoietic cell transplantation (AHCT). Even then, only about 50% of those patients are effectively “cured,” without recurrence of their lymphoma.

With each successive line of therapy, there are diminishing returns. The available CAR T-cell therapies are approved for use in the third-line setting, when disease has relapsed following AHCT or fails to respond to second-line salvage therapy. To answer the question of whether they are worth the high costs of treatment, I think we need to keep in mind that these products have induced durable remissions in 35 to 40% of this pretreated patient population.

John K. Lin, MD: CAR T-cell therapies are an incredible achievement for science, and, more importantly, a vital advance for patients with DLBCL. Unfortunately, when axicabtagene ciloleucel and tisagenlecleucel entered the market, their price tags have led the story. CAR T-cell therapies, as well as other gene and cellular therapies, offer potential cures for patients with genetic disorders and hematologic malignancies, but, yes, they come with very high upfront prices.

As more of these therapies are FDA approved, I worry about whether health systems can afford to pay for these therapies and whether they’re going to be adequately reimbursed by insurance companies. If we can’t, and if they aren’t, our most vulnerable patients will lose out.

Dr. Locke: Quite frankly, I have similar concerns. When we look at the cost of the existing therapies administered prior to CAR T-cell treatments, they are not dramatically lower. For example, if I were to administer salvage chemotherapy to a patient with DLCBL, a compromised immune system, and a high risk of infection, he would likely be hospitalized. Also, some of the regimens are administered in the hospital multiple times if they show any signs of working. Then, inevitably, the patient will relapse and receive more chemotherapy. So, I’m not convinced that the costs of treating patients with several lines of chemotherapy or with CAR T-cell therapies are wildly different.

Dr. Lin: In my group’s cost-effectiveness analysis, the high price of CAR T-cell therapy exceeds any savings from averting the downstream therapies, hematopoietic cell transplantations, hospitalizations, and complications that patients would otherwise incur with salvage chemoimmunotherapy.1  Two other cost-effectiveness analyses, including one sponsored by Kite pharmaceuticals, came to the same conclusion.2,3 We also should acknowledge that most patients receiving CAR T-cell therapy will still experience disease relapse, and many of these patients receive further CAR T-cell constructs. If these become standard of care, it will become even more expensive. I don’t think that CAR T-cell treatment will save money in the long run.

Dr. Locke: To answer the question of the their worth, we need to discuss outcomes. Although transplant is a consolidative option that can lead to durable remissions in certain patients, the overall chance of achieving this outcome is much lower without CAR T-cell therapy. In my understanding of the clinical data from the pivotal trials, we’re definitely extending patients’ lives. To me, it’s not the cost; it’s the value of the therapy.

Dr. Lin: I agree that we should reward therapies that make the biggest difference for our patients. CAR T-cell therapy has resulted in substantial gains for patients – in a way that other cancer therapies have not. To your point, one of the flaws in the American health care system is that we pay more than $200,000 per year for non-curative oral chemotherapies but struggle to pay for CAR T cells. Nevertheless, how should we define what price is reasonable for a curative therapy? We have to weigh the outcomes and costs of a therapy simultaneously, and this is the goal of cost-effectiveness analyses.

Our analysis showed that CAR T-cell therapies are priced somewhere between intermediate and low value; its ultimate cost-effectiveness depends heavily on cure rate. If 40% of patients are cured with CAR T-cell therapy, it will probably be cost-effective (at a willingness to pay threshold of $150,000 per quality adjusted life year). However, if the cure rate is closer to 30%, it is unlikely to be cost-effective at current prices. Until we have long-term data, I think the jury is still out on whether CAR T-cell therapy is cost-effective.

I also should point out that current analyses take an optimistic look at the cost-effectiveness of CAR T-cell therapy. Axicabtagene ciloleucel and tisagenlecleucel were approved on the basis of single-arm trials. Without a randomized trial, we had to compare CAR T-cell therapy to historic controls, which probably overstate the benefit of CAR T-cell therapy.

Dr. Locke: Certainly, there’s been plenty of fanfare over the relatively small single-arm phase II clinical trials that led to these FDA approvals. We need randomized data and, in fact, ongoing randomized trials are looking at CAR T-cell therapy for the second-line treatment of DLBCL. Although this is a slightly different indication, it may improve our understanding of their cost-effectiveness because they are being compared more directly with the standard approaches for inducing long-term remissions.

Still, anecdotally, we have treated nearly 300 patients with CAR T-cell therapy at our center, and the results are remarkable. And these are patients who we would not expect to be alive today without these new therapies. This has been supported in updated data from the ZUMA-1 trial, with which I was involved, and in the National Cancer Institute’s trials, some patients are in remission 5 years after a single infusion.4,5 If all patients had relapsed at five years, that would undoubtedly change the economics of the equation.

Dr. Lin:  I would argue that we should set a lower price to start with, which can be revised upward as time goes on. The current list price for the approved CAR T-cell therapies is $373,000. If the prices dropped to $250,000 or $275,000, they would be cost-effective even if there are fewer cures than we hope. As data mature, if outcomes are good, we can then increase the price accordingly. We know that pharmaceutical companies have no qualms with raising the prices of their drugs over time.

With a lower starting point, more patients will have access to these lifesaving treatments, and health systems will be more likely to be reimbursed fully for the costs of the product.

Dr. Locke: Right, and while we know the high list prices of CAR T-cell therapies, we also know that there is a high cost to administering them. Unfortunately, the U.S. medical system appears to have a bureaucratic inability to actually deliver the dollars where they belong.

“I’m not convinced that the costs of treating patients with several lines of chemotherapy versus with CAR T-cell therapies are wildly different.”

–Frederick Locke, MD

Solving that problem would require some creative governmental rulemaking or implementing new payment models. Still, I’m fairly skeptical of how value-based pricing would be rolled out in the pharmaceutical sector.

Novartis introduced an outcomes-based pricing model for the pediatric ALL indication for tisagenlecleucel: If the therapy doesn’t work, no one pays for it. That proposal is fraught with many problems, the least of which is that the definition of “not working” is not in line with reality. For example, the small percentage – say 20% – of patients whose disease did not respond to treatment by day 30 might get a refund. We know, though, that the therapy isn’t curing 80% of patients.

Dr. Lin: I’m in favor of outcomes-based payment arrangements, but I agree that we have to make sure that the outcomes we’re measuring and rewarding are the ones that matter. Durability is what we truly care about.

Dr. Locke: We should be looking at one- or two-year remission rates, and perhaps have multiple payments over time if the treatment appears to be working over that longer period.

Dr. Lin: I completely agree. I’d also like to see insurers pay pharmaceutical companies directly for CAR T-cell therapies and pay hospitals separately for the care they provide related to these treatments. This would allow health systems to provide CAR T-cell therapy without taking on the extra financial uncertainty of whether they will be adequately reimbursed for the cost of buying the product.

CAR T-cell therapies are unlike traditional chemotherapy or immunotherapies, which health systems buy in bulk before administering to patients. Right now, hospitals are buying CAR T-cell products from pharmaceutical companies, then trying to get adequate reimbursement from insurers. Unfortunately, they don’t have the leverage to negotiate well with either party. In my opinion, health systems should get out of the middle of this battle between insurers and pharmaceutical companies.

Dr. Locke: True – that would absolutely increase access to CAR T-cell therapies for the patients who need them, and likely decrease the financial risks that hospitals are taking on by administering these therapies.

There’s also been talk about academic medical centers pairing together to manufacture CAR T-cell products themselves at a reduced cost, thereby cutting out the pharmaceutical companies. Although that’s possible on a clinical trial, I’m not sure it’s a sustainable model within our current reimbursement systems. Essentially, it would mean the participating academic centers would have to assume the role of the pharmaceutical company – paying for the clinical trial, the manufacturing, and, ultimately, the FDA approval process.

The sponsoring pharmaceutical companies have shelled out a lot of money to develop these therapies; they set their prices with expectations of recouping those investments. If, as happens with other technologies, we manage to increase automation in the manufacturing process and the costs of goods decreases accordingly, could we stimulate more competition and force companies to lower their prices? We have to wonder, “Will costs always be this high?”


  1. Lin JK, Muffly LS, Spinner MA, et al. Cost Effectiveness of Chimeric Antigen Receptor T-Cell Therapy in Multiply Relapsed or Refractory Adult Large B-Cell Lymphoma. J Clin Oncol. 2019;37:2105-2119.
  2. Whittington MD, McQueen RB, Ollendorf DA, et al. Long-term Survival and Cost-effectiveness Associated With Axicabtagene Ciloleucel vs Chemotherapy for Treatment of B-Cell Lymphoma. JAMA Netw Open. 2019;2:e190035.
  3. Roth JA, Sullivan SD, Lin VW, et al. Cost-effectiveness of axicabtagene ciloleucel for adult patients with relapsed or refractory large B-cell lymphoma in the United States.. J Med Econ. 2018;21:1238-1245.
  4. Locke FL, Ghobadi A, Jacobson CA, et al. Long-term safety and activity of axicabtagene ciloleucel in refractory large B-cell lymphoma (ZUMA-1): a single-arm, multicentre, phase 1-2 trial. Lancet Oncol. 2019;20:31-42.
  5. Kochenderfer JN, Somerville RPT, Lu T, et al. Long-Duration Complete Remissions of Diffuse Large B Cell Lymphoma after Anti-CD19 Chimeric Antigen Receptor T Cell Therapy. Mol Ther. 2017;25:2245-2253.