Novartis accused of gaming Europe's orphan program to price Lutathera sky-high

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Novartis is facing criticism that its radioactive therapy Lutathera is costing too much in the Netherlands. (Novartis)

While CEO Vas Narasimhan is busy boasting Novartis’ new position in radiotherapies built on its acquisition of Advanced Accelerator Applications (AAA), the centerpiece of that buyout, Lutathera, has provoked the ire of health authorities in the Netherlands.

Dutch health minister Bruno Bruins accused Novartis of using Lutathera's orphan designation—and the market exclusivity that comes along with it—to jack up the therapy's price fivefold to €90,000 for a full course of treatment comprising four infusions, local news service DutchNews reported. Calling the price an “example of how not to behave,” the minister told a television talk show last week that he plans to have a conversation with Novartis about it.

But Novartis says Bruins' is a false comparison, because he's lining up the price of ready-made Lutathera against versions hospitals make themselves and use in-house at a cost DutchNews quoted at €4,000 per infusion. The cost of a full course of treatment at that price is about one-fifth that of Lutathera, the publication said.

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The company still supplies the basic component of the house-made versions—lutetium 177 (Lu-177)—and hospitals are still free to use it to make their own peptide receptor radionuclide therapies. To work as a radiotherapy, Lu-177 needs to be attached to dotatate, a peptide that targets somatostatin receptors on cancer cells.

RELATED: As Novartis' other cancer launches struggle, Lutathera gets off to flying start

As Novartis sees it, AAA has invested a lot in Lutathera’s development along its regulatory path. Additionally, it has set a global GMP-certified manufacturing process and “a global supply chain process that allows us to deliver Lutathera to hundreds of centers in Europe and the U.S. that lack the ability to make it themselves.”

“The price of Lutathera was carefully considered and based on the benefit the treatment provides to patients, healthcare systems and society at large. It is priced comparably to other existing therapies approved for this patient population,” Novartis said in a statement.

The Netherlands has a special attachment to Lutathera: Researchers at Erasmus University Medical Center in Rotterdam were key in the drug’s development in the 1980s. Because the number of patients with gastroenteropancreatic neuroendocrine tumors (GEP-NETs) is low, Lutathera was designated as an orphan medicine in 2008, a classification that comes along with market exclusivity.

During the talk show, Bruins said the orphan designation is meant to stimulate the development of new medicines as opposed to registering a relatively old experimental therapy, and said he would raise the issue with European authorities, DutchNews reported.

RELATED: Novartis building out cell and gene therapy platform that'll lead the pack, CEO promises

Lutathera is now covered for reimbursement in the Netherlands, but Bruins said the country’s health system has to deal with “so many other really expensive drugs that we really do have to tackle [Lutathera],” according to DutchNews.

Novartis told FiercePharma on Sunday that it’s currently in negotiations on price and it “had an open discussion with” Bruins. “We are committed to maintaining a dialogue on pricing and access,” the company said.

Novartis bought AAA for $3.9 billion in October 2017, right after Lutathera won approval in Europe. At that time, Baader Helvea analyst Bruno Bulic, as quoted by Reuters, projected Lutathera sales could peak at $2 billion. As part of CEO Narasimhan’s plan to build Novartis into “a medicines company” with a meaningful stake in some hot therapeutic approaches, the drugmaker bet further on radiotherapy by scooping up Endocyte through a $2.1 billion deal last October.

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