A new cancer treatment will be sold for nearly half a million dollars, sparking criticism from some patient advocates.
On Wednesday, the Food and Drug Administration approved the first gene therapy in the U.S. called Kymriah, which customize a patient's own immune cells to fight a type of leukemia through a therapy called CAR-T.
The drug's maker, Novartis, plans to sell the treatment for $475,000 for the one-time dose.
The company said the price is actually below some independent estimates, including an appraisal from the United Kingdom's National Institute for Cost Effectiveness that pegged a cost-effective price between $600,000 and $750,000.
"We looked at the current standards of care, such as the cost of allogenic stem cell transplants, which is between $540,000-$800,000 for the first year in the U.S.," Novartis said in a statement to the Washington Examiner. "These external assessments as well as our own health economic analysis of the value of Kymriah, all indicated that a cost effective price would be $600,000 to $750,000."
Novartis said that by setting the price below that figure it could help to "support sustainability of the healthcare system and patient access while allowing a return for Novartis on our investment."
It added that it is working with the Centers for Medicare and Medicaid Services for a value-based approach to the drug. That would mean that CMS payments for medicine would be based on how well it works on patients.
But some advocates are upset at the high price tag.
"Kymriah's price tag is simply a continuation of the pattern of sky-high launch prices that spins further out of control each year," according to the Campaign for Sustainable Rx Pricing, an advocacy group that includes insurers, nurses, hospitals and doctors. "While we are very excited about the potential for CAR-T therapies to save lives, Novartis' pricing decision disappointingly pushes an unsustainable trend even closer to the breaking point."
Other groups are more heartened by Novartis' value-based purchasing agreement with CMS.
"While we await more specific details of the agreement reached between Novartis and CMS, we believe this arrangement will be a win for patients, as it recognizes the need to reward outcomes and ensure the cost of treatment is a reflection of its clinical success," said Joel White, president of the Council for Affordable Health Coverage, a coalition of employers, insurers and patient groups.