By Chris Lewis, primary research manager, Clarivate
High remission rates associated with autologous chimeric antigen receptor (CAR) T-cell therapy have given new hope to acute lymphoblastic leukemia (ALL) and B-cell lymphoma patients who have relapsed or not responded to conventional treatments. However, such efficacy comes at a high price—more than $370,000 for a single infusion—resulting in a challenging reimbursement environment for U.S. healthcare institutions and payers.
Following the 2019 decision to cover CAR T-cell therapy for Medicare patients, the Centers for Medicare & Medicaid Services (CMS) established a new reimbursement rate for inpatient CAR T-cell delivery in 2021 designed to more closely reflect the true costs of care and address the financial losses experienced by many healthcare institutions. In another significant change for 2021, managed care organizations (MCOs) are taking over provider reimbursement of CAR T-cell therapy for Medicare Advantage members from the Medicare fee-for-service system.
CAR T-cell Therapy In Multiple Myeloma Raises The Stakes For Medicare
The two major developments in Medicare policy come at a critical juncture. Two CAR T-cell therapies are on track to enter the multiple myeloma market in 2021 and 2022, expanding treatment to a new population that includes many Medicare-age patients (65 or older). Bristol Myers Squibb/Bluebird Bio’s idecabtagene vicleucel (ide-cel) and Janssen’s ciltacabtagene autoleucel (cilta-cel) have shown high overall response rates in relapsed or refractory (R/R) multiple myeloma patients in Phase 1/2 trials. In fact, the pivotal Phase 2 KarMMa study evaluating the efficacy and safety of ide-cel showed a 73% overall response rate among heavily pretreated patients, while 33% achieved a complete response .1 The FDA is expected to take action on the BLA application on March 27.
When Clarivate surveyed pharmacy and medical directors from 40 MCOs in September 2020, nearly one-third were highly concerned about the financial implications to their Medicare Advantage plan as a result of having to cover these therapies.
Unlike conventional drug-based therapies, CAR T-cell administration is logistically complex, with manufacturing turnaround times of up to three weeks. Consequently, the price of a single infusion is among the highest seen for pharmaceutical products in the United States: $475,000 for Novartis’ Kymriah in ALL, $373,000 for Kymriah and Gilead/Kite Pharma’s Yescarta in large B-cell lymphoma, and $410,300 for Breyanzi in large B-cell lymphoma. Costs are often higher as the result of hospitalization, since CAR T-cell therapy carries the risk of severe side effects, including neurotoxicity and cytokine release syndrome. A study published in the Journal of Managed Care & Specialty Pharmacy in August 2020 estimated that the total cost of treatment with Kymriah for ALL patients was $612,779.2
Of 56 hematologist-oncologists we surveyed, 50 had prescribed Kymriah for ALL patients, noting that most patients responded well to therapy, but not without enduring serious side effects. Our research suggests oncologists would persist with insurers to prescribe emerging BCMA CAR T-cell therapies for multiple myeloma within a year of their launch, as well as Kite/Gilead’s CAR T-cell therapy Tecartus, in development for ALL. This is all good news—but market access depends largely on how payers respond.
Costs Of CAR T-cell Therapy Challenges Market Access
As MCOs assume financial risk, we expect payers to more aggressively manage ALL and multiple myeloma, not just for Medicare plans but also commercial plans. While MCOs have built the costs of CAR T-cell reimbursement into their 2021 CMS bids, their lingering concern over the financial impacts to their Medicare Advantage plans suggests they will capitalize on their ability to impose utilization management controls. At minimum, we expect commercial and Medicare payers alike to require prior authorization to ensure appropriate use of CAR T-cell therapy. Out of the gate, CAR T-cell therapy is constrained by the FDA’s Risk Evaluation and Mitigation Strategy (REMS) program, which has relegated the procedure to specialized treatment centers with highly trained staff, which will track patients’ progress in disease registries.
Commercial plans have more leeway in coverage than do Medicare plans and our research suggests they may be more selective in which products they cover. If the costs rise high enough, some plans may prioritize coverage to the most seriously ill, as we witnessed with expensive hepatitis C therapies. As the number of CAR T-cell products rises in the market, payers will gain leverage to pressure lowest net pricing from pharmaceutical companies to prefer a particular product through their formulary or medical benefit policies.
To inform their negotiations, some payers will likely consult the Institute for Clinical and Economic Review, which is expected to issue a final report in May 2021 on the cost-effectiveness of multiple myeloma CAR T-cell therapies. Its draft evidence report in February 2021 suggested that to achieve a cost-effectiveness standard of $100,000 per quality adjusted life year, ide-cel would have to be priced at $198,000 per unit and cilta-cel at $578,000 per unit, but that was before the latest trial results for ide-cel were released.3
CAR T-Cell Developers Should Prepare Early To Make Their Case To Payers
The challenge for drug companies is convincing payers that the steep up-front costs of personalized CAR T-cell therapy will be more than offset by higher and durable remission rates, avoiding more costly treatment in the long run. This will be tricky, considering the membership churn that MCOs experience.
MCOs have been increasingly turning to cost effectiveness studies to aid in formulary decisions for high-cost therapies. Thus, companies eying CAR T-cell therapy development should prepare pharmacoeconomic data or health economics outcomes research for dossier submissions. Our surveys have shown that some payers are open to accepting companies’ own modeling of cost-effectiveness, so payers should be engaged early in the development planning process.
Additionally, a go-to-market strategy should include an evaluation of innovative payment models to help payers and some providers better absorb the long-term costs. Our research suggests most payers are somewhat open to outcomes-based contracts with pharmaceutical manufacturers that tie reimbursement to real-world outcomes. However, payers’ receptivity is tempered by the logistical and legal impediments surrounding risk-based contracts, including agreeing on the outcomes to be measured. Some payers may also be open to an annualized payment model for CAR T-cell therapy rather than a pay-up-front approach.
The focus on safety will also be an important determiner of good market access. Because the cost of hospitalization due to severe side effects is a concern to MCOs, a CAR T-cell therapy that can be delivered in an outpatient setting is likely to factor favorably in its market access. Notably, Bristol Myers Squibb’s Breyanzi has demonstrated feasibility of outpatient administration for B-cell lymphoma, which may set the scene for other CAR T-cell therapies.
Fortunately for drug companies, the unprecedented clinical benefits of CAR T-cell therapy, as demonstrated in early trials for multiple myeloma and as tested in other blood-based malignancies, have largely spoken for themselves. Companies just need to be sensitive to the sticker shock that will undoubtedly greet those who will inevitably foot a large part of the bill.
Implications for the managed care industry are explored in CAR T-Cell Therapy in Hematological Malignancies, a U.S. access and reimbursement report published by Clarivate in December 2020. The report, which focuses on ALL and multiple myeloma, also examines the potential for first-line use of CAR T-cell therapy as well as off-the-shelf allogeneic products.
1. Munshi NC, et al. Idecabtagene Vicleucel in Relapsed and Refractory Multiple Myeloma, New England Journal of Medicine. 2021; 384:705-716.
2. Yang H, et al. Estimation of Total Costs in Pediatric and Young Adult Patients with Relapsed or Refractory Acute Lymphoblastic Leukemia Receiving Tisagenlecleucel from a U.S. Hospital’s Perspective. Journal of Managed Care & Specialty Pharmacy. 2020; 8(26). Link: https://www.jmcp.org/doi/pdf/10.18553/jmcp.2020.20052
3. Anti B-Cell Maturation Antigen CAR T-cell and Antibody Drug Conjugate Therapy for Heavily Pre-Treated Relapsed and Refractory Multiple Myeloma, Draft Evidence Report, Institute for Clinical and Economic Review. Published February 11, 2021 (accessed March 15, 2021) Link: https://icer.org/assessment/multiple-myeloma-2021/#timeline
About the Author:
Chris Lewis is primary research manager, U.S. access and reimbursement, for Clarivate. Lewis has authored reports and given presentations analyzing market access issues affecting the pharmaceutical industry, including health insurance trends in large markets such as California, New York, and Pennsylvania. She also initiated the company’s series of profiles of U.S. pharmacy benefit managers. A former journalist, Lewis holds a B.A. in Communications from California State University, Sacramento.