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Officials at the Centers for Medicare & Medicaid Services announced reimbursement rates for outpatient administration of two chimeric antigen receptor (CAR) T-cell therapies, settling on a fee that is roughly the wholesale acquisition cost plus 6%.
The agency will pay $395,380 to those who administer axicabtagene ciloleucel (Yescarta) on an outpatient basis and $500,839 for outpatient use of tisagenlecleucel (Kymriah), a similar CAR T-cell therapy for cancer patients. The two drugs have list prices of $373,000 and $475,000, respectively.
Although CMS set the Medicare Part B copayment for axicabtagene ciloleucel at $79,076, the agency later clarified that out-of-pocket expenses for Medicare patients are capped at around $1,340 in 2018 – the amount of the inpatient hospital deductible.
The Medicare rate is a first step to being able to use and get paid for CAR T-cell therapies, said Richard T. Maziarz, MD, a bone marrow transplantation and blood cancer specialist at the Oregon Health and Science University Knight Cancer Institute in Portland. However, the rate is not as straight forward as it sounds, he pointed out.
“This is big news,” Dr. Maziarz said in an interview. “This allows us to start to deliver these therapies, but there is a risk: If we give this in the outpatient setting and someone ends up needing hospitalization, we may end up not being reimbursed for the drug product.”
That’s because of CMS’s 3-day payment window rule, Dr. Maziarz explained: If medical treatment is provided in an outpatient setting and the patient needs inpatient care within 72 hours, all payments prior to that 72-hour window become part of the inpatient stay, according to the rule. Inpatient reimbursement varies depending on treatment, previous patient comorbidities, and complications during their stay. Analysts say that inpatient care is likely to occur with CAR T-cell therapies because some patients will need to be admitted so doctors can monitor them for serious side effects.
“If I have a drug that costs me $373,000, what happens if I admit the patient?” Dr. Maziarz said. “I don’t get $373,000; I get between $8,000 and $18,000. So if we give this and someone gets sick in 48 hours, then we may be at risk for losing.”
On the inpatient side, Medicare payment for CAR T-cell therapy is currently bundled into the payment for the inpatient stay, rather than being paid separately. The drug manufacturers – Gilead Sciences and Novartis AG – have requested that CMS set a separate “new technology add-on payment,” but the agency has not yet issued a decision.
Further advancements are expected for CAR T-cell therapies in 2018, said Cai Xuan, PhD, senior analyst in oncology and hematology for GlobalData, a data analytics and commercial intelligence firm.
For starters, pharmaceutical companies are now working toward next-generation CAR T-cell therapies that can be mass produced, Ms. Xuan noted. At a recent American Association for Cancer Research meeting, for example, the biopharmaceutical company Cellectis presented early clinical data in pediatric B-cell acute lymphoblastic leukemia for its off-the-shelf CAR T-cell candidate UCART19. Additionally, CRISPR Therapeutics presented preclinical data for one of its off-the-shelf CAR T-cell candidates for multiple myeloma, and the company announced it would apply for approval to start human trials by the end of 2018.
“The trend for 2018 is very much focusing on how to eliminate some of the profitability issues with first-generation CAR Ts because companies realize that manufacturing individualized treatments for each patient is not an ideal business model,” Dr. Xuan said in an interview.
More market competition is also in the forecast, particularly from smaller companies, Dr. Xuan said.
“What we are likely to see in the future is larger companies acquiring smaller ones once their CAR T technology has matured to a certain point,” she said. “We have seen it with the Gilead-Kite acquisition, as well as Celgene’s acquisition of Juno Therapeutics, and this trend will continue as long as smaller companies are able to develop proprietary next-generation CAR T technologies.”
Cost and accessibility remain key concerns with the therapies, especially for the Medicare population. Cost estimates have put the cost of CAR T-cell therapies as high as $1.5 million per patient.
“There remain unanswered questions about value and cost in older adults,” said Walid F. Gellad, MD, codirector for the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. “There are many life-saving treatments in the medical system that cost much less than this therapy. Presumably, its cost will go down as the indications expand and the experience with creating the CAR T cells improves. At least, one would hope.”
“In the longer term, there’s obviously a lot of people looking at how [the treatments] can be made more accessible,” she said in an interview. “These are the first generation CAR T [products], and I think there’ll be lots of refinements – both to make them more effective and safer, but also eventually with trying to use a third party product – to bring the cost of goods down.”
Other lingering unknowns about CAR T-cell therapies include how many patients in real-world clinical practice will have serious side effects, compared with those in trials, and the long-term recurrence rates after therapy use, Dr. Gellad noted. A recent paper by Dr. Gellad in the New England Journal of Medicine proposes that government payers reimburse only the cost of manufacturing and some predetermined mark-up for such therapies until confirmatory trials demonstrate clinical benefit (N Engl J Med. 2017;376[21]:2001-04).
Time will tell how reimbursement plays out during clinical practice, but one thing is for certain: The current CAR T-cell therapies are only the beginning, Dr. Maziarz said.
“Genetically-engineered cell products are going to explode over the next decade,” he said. “This is not the end of the line, this is the starting point.”
Dr. Maziarz has received consulting fees from Novartis, Juno Therapeutics, and Kite Pharma. Dr. Heslop has received consulting fees from Novartis, has conducted research for Cell Medica and holds intellectual property rights/patents from Cell Medica, and has ownership interest in ViraCyte and Marker Therapeutics. Dr. Gellad reports grants from Express Scripts.
Officials at the Centers for Medicare & Medicaid Services announced reimbursement rates for outpatient administration of two chimeric antigen receptor (CAR) T-cell therapies, settling on a fee that is roughly the wholesale acquisition cost plus 6%.
The agency will pay $395,380 to those who administer axicabtagene ciloleucel (Yescarta) on an outpatient basis and $500,839 for outpatient use of tisagenlecleucel (Kymriah), a similar CAR T-cell therapy for cancer patients. The two drugs have list prices of $373,000 and $475,000, respectively.
Although CMS set the Medicare Part B copayment for axicabtagene ciloleucel at $79,076, the agency later clarified that out-of-pocket expenses for Medicare patients are capped at around $1,340 in 2018 – the amount of the inpatient hospital deductible.
The Medicare rate is a first step to being able to use and get paid for CAR T-cell therapies, said Richard T. Maziarz, MD, a bone marrow transplantation and blood cancer specialist at the Oregon Health and Science University Knight Cancer Institute in Portland. However, the rate is not as straight forward as it sounds, he pointed out.
“This is big news,” Dr. Maziarz said in an interview. “This allows us to start to deliver these therapies, but there is a risk: If we give this in the outpatient setting and someone ends up needing hospitalization, we may end up not being reimbursed for the drug product.”
That’s because of CMS’s 3-day payment window rule, Dr. Maziarz explained: If medical treatment is provided in an outpatient setting and the patient needs inpatient care within 72 hours, all payments prior to that 72-hour window become part of the inpatient stay, according to the rule. Inpatient reimbursement varies depending on treatment, previous patient comorbidities, and complications during their stay. Analysts say that inpatient care is likely to occur with CAR T-cell therapies because some patients will need to be admitted so doctors can monitor them for serious side effects.
“If I have a drug that costs me $373,000, what happens if I admit the patient?” Dr. Maziarz said. “I don’t get $373,000; I get between $8,000 and $18,000. So if we give this and someone gets sick in 48 hours, then we may be at risk for losing.”
On the inpatient side, Medicare payment for CAR T-cell therapy is currently bundled into the payment for the inpatient stay, rather than being paid separately. The drug manufacturers – Gilead Sciences and Novartis AG – have requested that CMS set a separate “new technology add-on payment,” but the agency has not yet issued a decision.
Further advancements are expected for CAR T-cell therapies in 2018, said Cai Xuan, PhD, senior analyst in oncology and hematology for GlobalData, a data analytics and commercial intelligence firm.
For starters, pharmaceutical companies are now working toward next-generation CAR T-cell therapies that can be mass produced, Ms. Xuan noted. At a recent American Association for Cancer Research meeting, for example, the biopharmaceutical company Cellectis presented early clinical data in pediatric B-cell acute lymphoblastic leukemia for its off-the-shelf CAR T-cell candidate UCART19. Additionally, CRISPR Therapeutics presented preclinical data for one of its off-the-shelf CAR T-cell candidates for multiple myeloma, and the company announced it would apply for approval to start human trials by the end of 2018.
“The trend for 2018 is very much focusing on how to eliminate some of the profitability issues with first-generation CAR Ts because companies realize that manufacturing individualized treatments for each patient is not an ideal business model,” Dr. Xuan said in an interview.
More market competition is also in the forecast, particularly from smaller companies, Dr. Xuan said.
“What we are likely to see in the future is larger companies acquiring smaller ones once their CAR T technology has matured to a certain point,” she said. “We have seen it with the Gilead-Kite acquisition, as well as Celgene’s acquisition of Juno Therapeutics, and this trend will continue as long as smaller companies are able to develop proprietary next-generation CAR T technologies.”
Cost and accessibility remain key concerns with the therapies, especially for the Medicare population. Cost estimates have put the cost of CAR T-cell therapies as high as $1.5 million per patient.
“There remain unanswered questions about value and cost in older adults,” said Walid F. Gellad, MD, codirector for the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. “There are many life-saving treatments in the medical system that cost much less than this therapy. Presumably, its cost will go down as the indications expand and the experience with creating the CAR T cells improves. At least, one would hope.”
“In the longer term, there’s obviously a lot of people looking at how [the treatments] can be made more accessible,” she said in an interview. “These are the first generation CAR T [products], and I think there’ll be lots of refinements – both to make them more effective and safer, but also eventually with trying to use a third party product – to bring the cost of goods down.”
Other lingering unknowns about CAR T-cell therapies include how many patients in real-world clinical practice will have serious side effects, compared with those in trials, and the long-term recurrence rates after therapy use, Dr. Gellad noted. A recent paper by Dr. Gellad in the New England Journal of Medicine proposes that government payers reimburse only the cost of manufacturing and some predetermined mark-up for such therapies until confirmatory trials demonstrate clinical benefit (N Engl J Med. 2017;376[21]:2001-04).
Time will tell how reimbursement plays out during clinical practice, but one thing is for certain: The current CAR T-cell therapies are only the beginning, Dr. Maziarz said.
“Genetically-engineered cell products are going to explode over the next decade,” he said. “This is not the end of the line, this is the starting point.”
Dr. Maziarz has received consulting fees from Novartis, Juno Therapeutics, and Kite Pharma. Dr. Heslop has received consulting fees from Novartis, has conducted research for Cell Medica and holds intellectual property rights/patents from Cell Medica, and has ownership interest in ViraCyte and Marker Therapeutics. Dr. Gellad reports grants from Express Scripts.
Officials at the Centers for Medicare & Medicaid Services announced reimbursement rates for outpatient administration of two chimeric antigen receptor (CAR) T-cell therapies, settling on a fee that is roughly the wholesale acquisition cost plus 6%.
The agency will pay $395,380 to those who administer axicabtagene ciloleucel (Yescarta) on an outpatient basis and $500,839 for outpatient use of tisagenlecleucel (Kymriah), a similar CAR T-cell therapy for cancer patients. The two drugs have list prices of $373,000 and $475,000, respectively.
Although CMS set the Medicare Part B copayment for axicabtagene ciloleucel at $79,076, the agency later clarified that out-of-pocket expenses for Medicare patients are capped at around $1,340 in 2018 – the amount of the inpatient hospital deductible.
The Medicare rate is a first step to being able to use and get paid for CAR T-cell therapies, said Richard T. Maziarz, MD, a bone marrow transplantation and blood cancer specialist at the Oregon Health and Science University Knight Cancer Institute in Portland. However, the rate is not as straight forward as it sounds, he pointed out.
“This is big news,” Dr. Maziarz said in an interview. “This allows us to start to deliver these therapies, but there is a risk: If we give this in the outpatient setting and someone ends up needing hospitalization, we may end up not being reimbursed for the drug product.”
That’s because of CMS’s 3-day payment window rule, Dr. Maziarz explained: If medical treatment is provided in an outpatient setting and the patient needs inpatient care within 72 hours, all payments prior to that 72-hour window become part of the inpatient stay, according to the rule. Inpatient reimbursement varies depending on treatment, previous patient comorbidities, and complications during their stay. Analysts say that inpatient care is likely to occur with CAR T-cell therapies because some patients will need to be admitted so doctors can monitor them for serious side effects.
“If I have a drug that costs me $373,000, what happens if I admit the patient?” Dr. Maziarz said. “I don’t get $373,000; I get between $8,000 and $18,000. So if we give this and someone gets sick in 48 hours, then we may be at risk for losing.”
On the inpatient side, Medicare payment for CAR T-cell therapy is currently bundled into the payment for the inpatient stay, rather than being paid separately. The drug manufacturers – Gilead Sciences and Novartis AG – have requested that CMS set a separate “new technology add-on payment,” but the agency has not yet issued a decision.
Further advancements are expected for CAR T-cell therapies in 2018, said Cai Xuan, PhD, senior analyst in oncology and hematology for GlobalData, a data analytics and commercial intelligence firm.
For starters, pharmaceutical companies are now working toward next-generation CAR T-cell therapies that can be mass produced, Ms. Xuan noted. At a recent American Association for Cancer Research meeting, for example, the biopharmaceutical company Cellectis presented early clinical data in pediatric B-cell acute lymphoblastic leukemia for its off-the-shelf CAR T-cell candidate UCART19. Additionally, CRISPR Therapeutics presented preclinical data for one of its off-the-shelf CAR T-cell candidates for multiple myeloma, and the company announced it would apply for approval to start human trials by the end of 2018.
“The trend for 2018 is very much focusing on how to eliminate some of the profitability issues with first-generation CAR Ts because companies realize that manufacturing individualized treatments for each patient is not an ideal business model,” Dr. Xuan said in an interview.
More market competition is also in the forecast, particularly from smaller companies, Dr. Xuan said.
“What we are likely to see in the future is larger companies acquiring smaller ones once their CAR T technology has matured to a certain point,” she said. “We have seen it with the Gilead-Kite acquisition, as well as Celgene’s acquisition of Juno Therapeutics, and this trend will continue as long as smaller companies are able to develop proprietary next-generation CAR T technologies.”
Cost and accessibility remain key concerns with the therapies, especially for the Medicare population. Cost estimates have put the cost of CAR T-cell therapies as high as $1.5 million per patient.
“There remain unanswered questions about value and cost in older adults,” said Walid F. Gellad, MD, codirector for the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh. “There are many life-saving treatments in the medical system that cost much less than this therapy. Presumably, its cost will go down as the indications expand and the experience with creating the CAR T cells improves. At least, one would hope.”
“In the longer term, there’s obviously a lot of people looking at how [the treatments] can be made more accessible,” she said in an interview. “These are the first generation CAR T [products], and I think there’ll be lots of refinements – both to make them more effective and safer, but also eventually with trying to use a third party product – to bring the cost of goods down.”
Other lingering unknowns about CAR T-cell therapies include how many patients in real-world clinical practice will have serious side effects, compared with those in trials, and the long-term recurrence rates after therapy use, Dr. Gellad noted. A recent paper by Dr. Gellad in the New England Journal of Medicine proposes that government payers reimburse only the cost of manufacturing and some predetermined mark-up for such therapies until confirmatory trials demonstrate clinical benefit (N Engl J Med. 2017;376[21]:2001-04).
Time will tell how reimbursement plays out during clinical practice, but one thing is for certain: The current CAR T-cell therapies are only the beginning, Dr. Maziarz said.
“Genetically-engineered cell products are going to explode over the next decade,” he said. “This is not the end of the line, this is the starting point.”
Dr. Maziarz has received consulting fees from Novartis, Juno Therapeutics, and Kite Pharma. Dr. Heslop has received consulting fees from Novartis, has conducted research for Cell Medica and holds intellectual property rights/patents from Cell Medica, and has ownership interest in ViraCyte and Marker Therapeutics. Dr. Gellad reports grants from Express Scripts.