Novartis CEO opens door to cancer patient demanding ‘fair’ CAR-T pricing

David Mitchell had just finished a five-hour infusion of drugs to keep his multiple myeloma under control when he decided to dash off a letter to Joe Jimenez, CEO of Novartis, requesting a meeting about how the company plans to price tisagenlecleucel (CTL019), its CAR-T leukemia treatment expected to win approval from the FDA in October.

Because the treatment is personalized—immune cells are extracted from patients and engineered to recognize and kill their cancer—its impending approval has sparked concerns about just how expensive it might be.

“I write today to urge you in the strongest possible terms to price your CAR-T drug fairly in light of the fact that U.S. taxpayers invested hundreds of millions of dollars to develop CAR-T before your company became seriously involved,” Mitchell wrote in the letter, which came from his organization, Patients for Affordable Drugs, and was co-signed by two other people suffering from blood cancers. Mitchell requested a meeting with Jimenez, even offering to bring along two experts in drug pricing: Steven Pearson, president of the Institute for Clinical and Economic Review (ICER), and Aaron Kesselheim, professor at Harvard Medical School and head of its program on regulation, therapeutics and law.

It worked. On Friday afternoon, Mitchell received a note from Jimenez stating he had asked Bill Hinshaw, Novartis’ head of oncology, to schedule the proposed meeting.

In an interview with FiercePharma, Mitchell emphasized that his goal for meeting with Novartis is not to give the company’s executives a hard time for developing a treatment that’s inherently costly to make. “I’m very excited about this new treatment. I have an incurable blood disease,” Mitchell says. “This CAR-T will initially be approved for leukemia, but other blood diseases are not far behind. It’s really important. But the question is, what’s the appropriate price? Should the price reflect the fact that taxpayers laid the groundwork?”

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Here’s the crux of Mitchell’s argument: Taxpayers invested $200 million in early-stage research on CAR-T science before 2012, when Novartis gained exclusive rights to the treatment that would become tisagenlecleucel. “Novartis only came to the party big time after the promise of the CAR-T treatment had been demonstrated,” Mitchell says. “Taxpayers made the long-term investment starting in 1993 and took all the risk until Novartis stepped up.”

A spokeswoman for Novartis said in an e-mail to Fierce that the company is working hard to establish the appropriate price for the CAR-T product, “taking into consideration the value that this treatment represents for patients, society and the healthcare system, both near-term and long-term, as well as input from external health economic experts. We recognize our responsibility in bringing this innovative treatment to patients and are committed to doing everything we can to help those who can benefit from CTL019 have access to the therapy.”

Novartis has only offered fleeting references to how it might price tisagenlecleucel: In June, R&D head Vas Narasimhan said the company was looking at stem cell transplants—which can cost $800,000—as a model.

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Mitchell’s estimate that taxpayers funded $200 million worth of CAR-T research is based on a keyword search on the National Institutes of Health (NIH) website. Novartis’ academic partner, the University of Pennsylvania, got about $17 million of that. The rest went to the National Cancer Institute and more than 60 academic institutions and biotech companies.

Mitchell is well aware that the fruits of a lot of that research went to other companies that are also advancing CAR-T treatments, like Juno Therapeutics and Kite Pharma, but he believes all of the early-stage science that taxpayer money funded fed into the overall success of the new technology, and that all pricing by any company that commercializes it should reflect that, he says.

In addition to the planned meeting at Novartis, Mitchell’s group is placing ads on cancer-related websites, speaking out on social media and running an e-mail campaign directed at the 15,000 people who have signed up on his organization’s website.

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The value of Novartis' original deal with Penn was not disclosed, and the company invested an additional $20 million towards a joint CAR-T research center, the spokeswoman says. But Novartis ultimately spent far more than that developing tisagenlecleucel, with ongoing clinical trials and other development costs, plus manufacturing.

In 2012, Novartis bought a New Jersey manufacturing plant from Dendreon for $43 million and hired 100 of its employees. It has also been spending money to get CAR-T production up and running overseas. In 2015, for example, it formed an agreement (for an undisclosed sum) with the Fraunhofer Institute in Germany to set up CAR-T manufacturing there. Novartis has not disclosed estimates of what its manufacturing costs might be when tisagenlecleucel is a commercial product. And it's still studying tisagenlecleucel in five clinical trials.

But the company’s executives are well aware they’re introducing a brand-new, expensive approach to treating cancer at a point when the backlash over high drug prices is at an all-time high. Mitchell’s letter to Jimenez arrived just days after President Donald Trump revisited his earlier criticisms of drug prices—blasting Merck CEO Ken Frazier for leaving his manufacturing council and saying in a tweet that maybe now he “will have more time to LOWER RIPOFF DRUG PRICES!”

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One strategy for commercializing CAR-T that Novartis is considering is value-based pricing, the spokeswoman says. Under that system, payers would be reimbursed for the treatment based on its success in individual patients. Such an approach “will enable the U.S. system to adopt new technologies in the fight against cancer,” she says.

Novartis is no stranger to pay-for-performance deals with insurers. Last year, it struck two such deals with Cigna and Aetna for its heart failure drug, Entresto. The company is offering rebates on the drug that will rise or fall based on patient outcomes. If Entresto reduces hospitalizations and other complications of heart failure, the rebate falls, but if a patient taking the drug doesn’t improve, it rises.

Mitchell doesn’t like the idea of value-based pricing in cancer treatments, however. He fears it could invade patient privacy, he says, and it still gives drug companies too much power to set prices. “If [the treatment] doesn’t perform they’ll give the insurers a refund. Well, for me as a patient, if I land in the hospital or dead because this drug didn’t work, what good does that do me?” Mitchell says. “I want the price set fairly from the outset.”

Mitchell’s offer to bring along a representative of ICER when he meets with Novartis was timely, considering that the organization is currently preparing a report assessing the value of CAR-T treatments for acute lymphoblastic leukemia (ALL). ICER is currently collecting public comments and expects to complete its report next March. Novartis is “already in discussions with ICER to provide data they are requesting as needed for their independent analysis,” the spokeswoman says.

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Patients for Affordable Drugs is less than a year old, but Mitchell has already made waves in the pharma industry. In June, he launched a class-action lawsuit against Celgene alleging that the company held up the development of generic versions of its cancer blockbuster Revlimid. Mitchell once relied on Revlimid to control his multiple myeloma and he saw his copay for the drug jump from $42 a month to $250.

After Mitchell’s doctors took him off Revlimid he started on a three-drug cocktail that’s “working great,” he says. His fight against high drug prices doesn’t reflect any personal animosity against the industry, but rather is designed to ensure the healthcare system can afford the price of innovation, he says.

“I couldn’t be more grateful. It’s just that there needs to be a way to set prices based on more than monopoly muscle,” Mitchell says. “People don’t even blanch anymore at a $400,000-a-year cancer drug. We can’t go on this way. Hopefully [CAR-T] is an opportunity to have an open dialogue about how these treatments are priced.”