House Reps Seek More Transparency on Novartis-CMS Pricing Deal for Newly Approved CAR-T Therapy

Rep. Lloyd Doggett (D-TX) and other House Democrats on Wednesday sent a letter to Seema Verma, administrator of the Centers for Medicare & Medicaid Services (CMS), seeking to find out more information about an outcomes-based payment approach for Novartis’ newly approved chimeric antigen receptor T-cell (CAR-T) treatment Kymriah (tisagenlecleucel) for certain pediatric and young adult patients with a form of acute lymphoblastic leukemia (ALL).

The outcomes-based payment deal for the $475,000 treatment, which is tailored to each individual patient and ensures CMS payment to Novartis will only occur if there is a response by the end of the first month, has been viewed as being a trendsetter for such deals but the one-month timing has been questioned.

Critics and analysts have been split on the price tag, with critics saying the price should be lower because taxpayer funding went into some of the early work and analysts and Novartis saying they could have sought a higher price.

Novartis, which did not comment on the letter or the outcomes-based deal pointed Focus to the 83% of the Phase 2 study participants - many of whom had not responded to any other therapy and who "were able to achieve complete remission as a result of one-time treatment with Kymriah." The company told Focus in a statement, "We expect that this innovative approach will reduce costs for the Medicare and Medicaid programs and ensure timely access to Kymriah for the most vulnerable patients."

Doggett Letter

The letter sent by nine Democrats to CMS seeks more information on Novartis’ potential profit margin and how many Medicaid and Medicare patients will receive Kymriah over the next year, five years and ten years (analysts have estimated there are about 600 patients total that could be treated with Kymriah).

Among other questions, the representatives also sought more transparency on why the one-month threshold was set, asking:

• "How was the one-month response period established? Were oncologists within or outside of CMS consulted on this decision?

• What is the agreed-upon definition of success for the one-month outcome?  What criteria will be evaluated in determining success?  Who will be responsible for assessing these criteria? 

• How does CMS plan to track whether outcomes-based pricing arrangements lower prices for taxpayers and patients?"

Walid Gellad, co-director of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh, told Focus: "I think the letter brings up some really important issues for CMS on this deal. Most importantly, will the 'outcome-based' payments be in place at the time that Kymriah reaches the market? Given the complexity of payments within Medicaid, specifically with multiple managed care plans operating in every state, this arrangement is a complicated one to get right. I also agree with the concerns about figuring out how deeply CMS thought about the 30-day time period for this arrangement.

"The success of this arrangement with CMS is really important for the future of these kinds of deals," he added. "They have to work. They have to help Medicare/Medicaid beneficiaries access these therapies. They should lower costs for taxpayers and consumers. They should not just be a talking point for either payer or manufacturer."