Meeting News

CAR T-cell therapy total cost can exceed $1.5 million per treatment

Richard T. Maziarz, MD
Richard T. Maziarz

PHILADELPHIA — When factoring in all the costs associated with chimeric antigen receptor T-cell therapy, hospitals may charge as much as $1.5 million or more to avoid losing money, according to Richard T. Maziarz, MD, professor of medicine at Oregon Health & Science University’s Knight Cancer Institute.

Maziarz presented this information at the recent CAR-T and the Rise of the Cellicon Valley event at the University of Pennsylvania.

The total cost of care when administering tisagenlecleucel (Kymriah; Novartis) includes the cost of the drug ($475,000), its administration, and oftentimes inpatient care for toxic side-effects. Maziarz said his center needs to charge $1.5 million to break even on providing the drug to patients, according to his own unpublished analysis.

“And that’s for an uncomplicated case,” Maziarz said. “In the case of a Medicaid patient, it actually takes $2 million dollars before you break even. [Hospitals] cannot break even if the drug is provided in the inpatient setting.”

Maziarz said that the American Society for Blood and Marrow Transplantation advises hospitals that administer CAR T-cell treatments must bill 4 to 5 times the price of the drug ($2-$2.5 million) to avoid losing money.

“Half of private payers will laugh at the price because they know they won’t pay it, then they will make a deal with you,” he quipped.

Continuing CAR T Care

Maziarz gave two reasons why would hospitals continue to provide CAR T-cell therapy though they are destined to lose money. First, centers providing the treatments see the possibility of downstream charges if they keep the patient alive. Second, reimbursements for patients who receive CAR T-cell therapy and do not require inpatient monitoring for toxicities allows the hospital to profitably treat some patients and bank that revenue to subsidize patients who require post-infusion inpatient care.

Maziarz explained that the world of health care reimbursement is continuously changing, but the mission to treat patients remains. Cell therapy programs will shut down unless they are able to adopt new approaches that address the financial issues around providing these new therapies to patients, he warned.

“There are new models emerging,” Maziarz said. “CAR T is an awesome new drug, and it may be a onetime-only therapy as opposed to something like checkpoint inhibitors, which you might give every 3 weeks until disease progression occurs.”

The current state of CAR T-cell delivery and reimbursement is a new challenge in the U.S. health care system, he added.

“Single drug, single-time payments are rare. As of last year, there were only 50 drugs in the country that had a value-based or performance-based reimbursement,” he noted.

Maziarz briefly touched on some of the new models that could help payers and providers keep up with the expense of emerging therapies, such as CAR T cells.

One was an escrow model for value-based performance: payers would hold payment for up to 18 months to ensure the drug has performed as intended before reimbursing providers.

Another included portability agreements, because many Americans change their insurance companies every few years, for various reasons. This model would pay the total cost of the drug and its administration over time, like an annuity, which hedges payers’ risk when a customer moves to another insurer and gives providers a more reliable income flow after a patient receives CAR T-cell therapy.

“The market is evolving,” Maziarz said. “Providers need to know how to track the money, and we will need to pay increasing attention to value-based frameworks to guide our decision making.”

CAR T-cell Therapy as Value-Based Medicine

The price of CAR T-cell therapy is an obvious issue, Maziarz said. It’s part of an overall trend that has seen overall health care costs remain relatively stable while the cost of prescription drugs has exploded.

Maziarz noted that Medicare Part D costs have increased 280% over the last 6 years, led by the cost of rare, orphan indications, for which “the basic entry price is about $200,000 per year.”

“The payers are complaining. The politicians are complaining. And it turns out that MDs are complaining, too,” Maziarz said.

But where is the value to the health care system at an entry price of $373,000 for one treatment of axicabtagene ciloleucel (Yescarta; Kite Pharma, Gilead)?

Maziarz said there is little doubt about the clinical value of CAR T-cell therapy, for example, in pediatric patients with acute lymphoblastic leukemia.

“All of these children would probably have been dead,” he said. “Instead we have an 18-month 70% survival rate. No question, CAR T has good clinical value.”

As for the price, Maziarz said providers must evaluate the cost of the drug, and balance that against its cost to the community and the goals of the patient.

The payer community is increasingly demanding that people be treated at centers of excellence and that defined pathways be established for delivering cancer care because of drug costs, Maziarz added.

“We are seeing massive consolidation in the payer industry,” he observed, and payers are often demanding that providers follow value-based frameworks to guide treatment decisions to receive reimbursement. Guidelines like those established by the National Comprehensive Cancer Network, which Maziarz called a “value-based framework,” now take on greater importance in the delivery of cancer care.

There is an ongoing battle in the payer industry over whether to cover CAR T-cell therapy, Maziarz explained, in an industry where endorsements matter.

“When NCCN basically endorsed CAR T for large cell lymphoma, it basically became approved. It became a de facto standard of care.”

“As doctors, we are focused on delivering care — patients need to be the center of attention. However, we live in an environment that impacts our ability to deliver that care,” Maziarz said.

“I am approaching 40 years in practicing medicine and this last decade had been absolutely dramatic — every few months there is significant change that impacts our practice.” – by Drew Amorosi

 

Reference: NCCN. Clinical practice guidelines in oncology: B-cell lymphomas. Version 3.2019. May 6, 2019. www.nccn.org/professionals/physician_gls/pdf/b-cell.pdf.

 

Disclosure: Maziarz reports no relevant financial disclosures.

 

 

Richard T. Maziarz, MD
Richard T. Maziarz

PHILADELPHIA — When factoring in all the costs associated with chimeric antigen receptor T-cell therapy, hospitals may charge as much as $1.5 million or more to avoid losing money, according to Richard T. Maziarz, MD, professor of medicine at Oregon Health & Science University’s Knight Cancer Institute.

Maziarz presented this information at the recent CAR-T and the Rise of the Cellicon Valley event at the University of Pennsylvania.

The total cost of care when administering tisagenlecleucel (Kymriah; Novartis) includes the cost of the drug ($475,000), its administration, and oftentimes inpatient care for toxic side-effects. Maziarz said his center needs to charge $1.5 million to break even on providing the drug to patients, according to his own unpublished analysis.

“And that’s for an uncomplicated case,” Maziarz said. “In the case of a Medicaid patient, it actually takes $2 million dollars before you break even. [Hospitals] cannot break even if the drug is provided in the inpatient setting.”

Maziarz said that the American Society for Blood and Marrow Transplantation advises hospitals that administer CAR T-cell treatments must bill 4 to 5 times the price of the drug ($2-$2.5 million) to avoid losing money.

“Half of private payers will laugh at the price because they know they won’t pay it, then they will make a deal with you,” he quipped.

Continuing CAR T Care

Maziarz gave two reasons why would hospitals continue to provide CAR T-cell therapy though they are destined to lose money. First, centers providing the treatments see the possibility of downstream charges if they keep the patient alive. Second, reimbursements for patients who receive CAR T-cell therapy and do not require inpatient monitoring for toxicities allows the hospital to profitably treat some patients and bank that revenue to subsidize patients who require post-infusion inpatient care.

Maziarz explained that the world of health care reimbursement is continuously changing, but the mission to treat patients remains. Cell therapy programs will shut down unless they are able to adopt new approaches that address the financial issues around providing these new therapies to patients, he warned.

“There are new models emerging,” Maziarz said. “CAR T is an awesome new drug, and it may be a onetime-only therapy as opposed to something like checkpoint inhibitors, which you might give every 3 weeks until disease progression occurs.”

The current state of CAR T-cell delivery and reimbursement is a new challenge in the U.S. health care system, he added.

PAGE BREAK

“Single drug, single-time payments are rare. As of last year, there were only 50 drugs in the country that had a value-based or performance-based reimbursement,” he noted.

Maziarz briefly touched on some of the new models that could help payers and providers keep up with the expense of emerging therapies, such as CAR T cells.

One was an escrow model for value-based performance: payers would hold payment for up to 18 months to ensure the drug has performed as intended before reimbursing providers.

Another included portability agreements, because many Americans change their insurance companies every few years, for various reasons. This model would pay the total cost of the drug and its administration over time, like an annuity, which hedges payers’ risk when a customer moves to another insurer and gives providers a more reliable income flow after a patient receives CAR T-cell therapy.

“The market is evolving,” Maziarz said. “Providers need to know how to track the money, and we will need to pay increasing attention to value-based frameworks to guide our decision making.”

CAR T-cell Therapy as Value-Based Medicine

The price of CAR T-cell therapy is an obvious issue, Maziarz said. It’s part of an overall trend that has seen overall health care costs remain relatively stable while the cost of prescription drugs has exploded.

Maziarz noted that Medicare Part D costs have increased 280% over the last 6 years, led by the cost of rare, orphan indications, for which “the basic entry price is about $200,000 per year.”

“The payers are complaining. The politicians are complaining. And it turns out that MDs are complaining, too,” Maziarz said.

But where is the value to the health care system at an entry price of $373,000 for one treatment of axicabtagene ciloleucel (Yescarta; Kite Pharma, Gilead)?

Maziarz said there is little doubt about the clinical value of CAR T-cell therapy, for example, in pediatric patients with acute lymphoblastic leukemia.

“All of these children would probably have been dead,” he said. “Instead we have an 18-month 70% survival rate. No question, CAR T has good clinical value.”

As for the price, Maziarz said providers must evaluate the cost of the drug, and balance that against its cost to the community and the goals of the patient.

The payer community is increasingly demanding that people be treated at centers of excellence and that defined pathways be established for delivering cancer care because of drug costs, Maziarz added.

PAGE BREAK

“We are seeing massive consolidation in the payer industry,” he observed, and payers are often demanding that providers follow value-based frameworks to guide treatment decisions to receive reimbursement. Guidelines like those established by the National Comprehensive Cancer Network, which Maziarz called a “value-based framework,” now take on greater importance in the delivery of cancer care.

There is an ongoing battle in the payer industry over whether to cover CAR T-cell therapy, Maziarz explained, in an industry where endorsements matter.

“When NCCN basically endorsed CAR T for large cell lymphoma, it basically became approved. It became a de facto standard of care.”

“As doctors, we are focused on delivering care — patients need to be the center of attention. However, we live in an environment that impacts our ability to deliver that care,” Maziarz said.

“I am approaching 40 years in practicing medicine and this last decade had been absolutely dramatic — every few months there is significant change that impacts our practice.” – by Drew Amorosi

 

Reference: NCCN. Clinical practice guidelines in oncology: B-cell lymphomas. Version 3.2019. May 6, 2019. www.nccn.org/professionals/physician_gls/pdf/b-cell.pdf.

 

Disclosure: Maziarz reports no relevant financial disclosures.

 

 

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