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US FDA chief hints at labeling fix to solve CAR-T drug reimbursement dilemma

U.S. Food and Drug Administration Commissioner Scott Gottlieb said he wants to ensure the burgeoning cell therapy market is not afflicted by the same poor reimbursement decisions from the U.S. government that all but sunk the radiopharmaceuticals market.

The decisions by the U.S. Centers for Medicare and Medicaid Services to limit coverage of radiopharmaceuticals "left hospitals underwater for the delivery of those drugs and hospitals stopped prescribing them and it basically destroyed the radiopharmaceutical industry," Gottlieb said during a Nov. 13 forum hosted by the Washington Post. "You didn't see investment going into the development of those drugs."

Gottlieb said he was worried the same scenario could play out with chimeric antigen receptor T-cell therapies, like Novartis AG's Kymriah and Gilead Sciences Inc.'s Yescarta.

CAR-T therapies are drugs made by taking immune cells from a patient's blood and re-engineering them to attack cancer cells. The cells are then infused back into the person's body.

Novartis set the list price of its drug at $475,000 for a single course of treatment, while Yescarta's list price is $373,000.

Gottlieb noted the current FDA-approved CAR-T drugs are labeled for inpatient use only.

"A lot of hospitals that are prescribing those drugs in the inpatient side are losing money or aren't getting reimbursed," the commissioner said. "There's sort of an arbitrage between the outpatient delivery of those drugs and the inpatient delivery of those drugs."

Gottlieb said labeling changes could be made that would permit the medicines to be reimbursed under the U.S. government's Medicare Part B program, which covers injectable medicines administered in doctor's offices and clinics.

He noted that the difference between an inpatient and outpatient setting sometimes is no more than "an elevator ride one floor up."

For instance, Gottlieb said, many outpatient infusion centers that are part of academic institutions are adjacent to their hospitals.

The FDA commissioner said he could "potentially foresee" changes being made to the labeling of CAR-T drugs to state that if an outpatient clinic was five minutes from a hospital intensive-care unit where a patient could receive rescue care in the event of an infusion reaction, the product could be delivered in that outpatient facility.

Such a labeling change would be a way to get the CAR-T drugs "out of this sort of temporary reimbursement challenge that they are facing," Gottlieb said.

"But it's not a long-term solution," he said. "We need a long-term solution."

If reimbursement for CAR-T therapies is not settled the right way, "we have the potential to choke off a really exciting area of development," Gottlieb said.

He noted that most of the development for CAR-T therapies underway is in the late stages.

"Some people will say that has nothing to do with reimbursement, that it's because CAR-Ts haven't proven themselves to be effective in solid tumors, and so most of the people have applied them to liquid tumors and most of that development is going on," Gottlieb said. "But I don't think that's right."

He said he believes venture capitalists and entrepreneurs are pulling back from the CAR-T space over caution about the unclear nature of the reimbursement landscape.

"And that's a very worrisome sign to me if in fact that's true," said Gottlieb, a former venture capitalist.

Regulators have often noted during advisory committee meetings, however, that the FDA is not supposed to consider the costs of drugs when making approval and labeling decisions.

Cancer drugs too expensive overall

The problem is that the costs of cancer drugs overall is too expensive, Ezekiel Emanuel, vice provost for global initiatives and chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania, said during a later panel discussion at the Washington Post forum.

But Jennifer Bryant, senior vice president of policy and research at the industry trade group the Pharmaceutical Research and Manufacturers of America, said most patients in the U.S. have prescription drug coverage.

She reminded Emanuel that the Affordable Care Act — a law for which he was one of the key architects during the Obama administration — has an annual cap of $7,000 on patient spending.

"There's no question that for patients we do need to worry about cost-sharing," Bryant said. "Cost sharing, especially for oncology, is out of control. We need to make it more predictable and manageable. It's really a scandal."

Only about one cent per every dollar spent on drugs is for cancer medicines, Bryant noted.

"Find me another penny that has produced as many remarkable advances in care," she added.

Peter Bach, director of Memorial Sloan Kettering's Center for Health Policy and Outcomes, however, said "every penny we spend on smoking cessation probably yields 40 times the benefit" in overall cancer costs.

The money spent on cancer treatments is "getting to be a less and less good deal," Bach stated.

"For the last 25 years or so, the cost per life year gains, which is dictated by the price of the drug and how well it works, has gone up about five or six-fold," he said.

While Emanuel, an oncologist, said he wants investment to continue in cancer drugs, he noted that there are 450 clinical trials ongoing for CAR-T therapies versus less than 50 for antibiotics — drugs that cost Americans very little money out of pocket, for the most part.

"We are not researching the most health important drugs out there precisely because of the skew in prices," Emanuel said. "This notion that the amount of money we get from exorbitant prices is necessary for research is simply untrue."

The $2 billion figure cited by PhRMA and brand-name drugmakers for research and development per drug "has been cooked up" and cannot be verified, Emanuel said. "There's no transparency on that number."