Gilead Sciences Inc. is not likely to follow in the footsteps of its main rival Novartis AG when it comes to pricing its CAR-T therapy, Gilead President and CEO John Milligan seemed to suggest during a presentation at the Morgan Stanley Global Healthcare conference on Sept. 11.
Just two weeks ago, Novartis' Kymriah marked the first approval for a chimeric antigen receptor T cell, or CAR-T, therapy, which involves infusing gene-edited cells back in to the body to fight cancer. While Novartis' indication is for pediatric acute lymphoblastic leukemia, or ALL, Gilead's acquisition target Kite Pharma is currently in the U.S. approval process for its own CAR-T therapy, axi-cel, for diffuse large B-cell lymphoma, or DLBCL, patients whose disease has returned or is not responding to treatment.
Surprising some who expected a near $1 million price tag, Novartis priced Kymriah at $475,000 and with some agreements implemented a 'pay-for-performance' plan in which the treatment would be free if patients showed no response within a month.
"I'd be interested to hear more as they unveil what the plan actually is," Milligan said, adding that he thinks indications-based pricing is harder to do in the U.S. than in Europe.
Milligan said that ALL has very high response rates to CAR-T therapy compared to DLBCL, and can typically be measured at the one-month mark. Meanwhile, for DLBCL, response rates are generally measured at three months and complete responses, in which there are no detectable signs of cancer, can happen later, he said.
"We're going to have to come up with some better way to understand this and to work with it, demonstrating the value and the pricing that we, that Kite or we, choose, depending when the approval occurs," he said. A Food and Drug Administration decision on axi-cel is expected by the end of November.
Milligan was careful to note the reasons that CAR-T therapy is valuable. It would be replacing many expensive chemotherapies, he said, and as an individualized therapy, it is "one of the most expensive medicines ever manufactured."
Gilead has been criticized in the past for its prices. While the 2014 arrival of its hepatitis C drugs Harvoni and Sovaldi slashed treatment times and significantly raised cure rates, the drugs also cost about $1,000 a pill for an eight-week cycle.
Milligan said that with axi-cel, the company will work to automate parts of production in order to bring costs down and he expects prices to fall further as indications for CAR-T therapies broaden.
"But we're going to have to work with the hospitals and make sure that the pricing is acceptable within their business models and acceptable within our business model," he added.
Kite Pharma has already worked out plans to launch with somewhere between 10 and 15 hospitals, according to Milligan. By this time next year, that hospital network will grow to have 90% of the roughly 7,500 annual DLBCL patient in the U.S. within range, he said. The company will later mimic that process in Europe.
Novartis is launching Kymriah with 32 administration facilities this year and expects to have roughly all 600 U.S. ALL patients in a two-hour reach within a year, executives said in the company's approval call.
In terms of manufacturing, Milligan said that by next year Kite Pharma's facilities will be able to handle production for about 4,000 CAR-T patients annually. In order to scale up, Gilead is planning new facilities in Europe, a second site in the U.S., and possibly more down the line.
While the therapy itself may be expensive, building the manufacturing facilities is not, based on Milligan's comments. He said that Kite's current facility cost about $30 million to build, significantly less than facilities for biologics drugs, and CAR-T manufacturing is much easier to expand upon.
"This is very rudimentary, so you can clearly automate some of the processes," he said. "There are a lot of things that we can do to enhance the output, potentially even lower the time frame to move forward."