Vantage view – Payers OK with CAR-T? Not so fast

When ICER, the leading US cost-effectiveness organisation, last month concluded that new CAR-T treatments for blood cancers were “priced in alignment with clinical benefits” this was widely seen as payer validation of the cutting-edge technology. The truth is probably more complicated.

Novartis and Gilead achieved approval of Kymriah and Yescarta respectively on data from a total of 164 patients, in trials that started less than three years ago. Drawing conclusions about lifetime cost-effectiveness, as ICER (the Institute for Clinical and Economic Research) has done, assumes CAR-T durability that is yet to be demonstrated, and makes assumptions that could be disproved as experience grows.

Value for money

In its draft assessment ICER has calculated that, while Kymriah and Yescarta initially cost much more than the current chemotherapy standards of care, they should add quality adjusted life years (QALYs). This would effectively bring down the cost of CAR-T over time, as well as flattering the cost comparison of CAR-T versus chemo.

Kymriah was found to have a greater benefit on QALYs over chemo than Yescarta did, but this is at least partly a function of the disease in which it is approved, paediatric acute lymphoblastic leukaemia (ALL). As these patients are young they would be expected to live longer than adults with diffuse large B-cell lymphoma (DLBCL), the population in which Yescarta is approved. 

ICER’s draft assessment found that Kymriah cost $57,093 per QALY more than clofarabine chemo, if the patient’s entire lifetime is taken into account. Yescarta was judged to cost $145,158 per QALY more than chemotherapy, also over a lifetime horizon.

The cost-effectiveness ratio shrinks, of course, with the period over which it is measured – at one year the cost increases per QALY for Kymriah and Yescarta are, respectively, $1.2m and $5.1m. ICER points out that the lifetime duration does not assume that everybody survives five, 10 or 30 years, but that those who do “contribute proportionally toward the average findings that are aggregated across time”.

However, the cost-effectiveness case is really only made if Kymriah and Yescarta can demonstrate durability that they have yet to show conclusively in the clinic.

Novartis has attempted to model this alongside health economists. In a presentation at Ash the Swiss group extrapolated from current data to argue that median survival in ALL would be 13.4 years, and five-year survival about 55%. 

If this is the case then ICER’s estimates might not be too far off the mark.

Yescarta could have a more difficult case to make. Long-term follow-up from the Zuma-1 trial showed median duration of response to be 11.1 months in DLBCL.

Who buys vs who benefits?

A flaw in taking the ICER analysis as gospel is that US healthcare coverage is not a single-payer system. Many patients will shift coverage as insurance is linked to employment, or in the case of public coverage, subject to annual enrolment. Thus the pool that incurs the $475,000-575,000 cost of Kymriah or Yescarta might not see the downstream benefit in QALYs gained.

On the other hand, decision-making at this scale has to account for small patient numbers. Many payers would be extraordinarily unlucky to have to cover more than one case per year, and this could make the decision to pay for Kymriah and Yescarta easier when measured against the much larger budgetary impacts of cheaper treatments for more common diseases.

And indeed, some media reports have suggested incredibly low patient uptake for CAR-T so far. This situation has not been helped by the complexity of Medicare reimbursement, which the leading US speciality society argues would require a hospital to mark up its CAR-T compensation claims to more than $2m to cover its own costs. 

Of course, the macroeconomic implications of these two new agents must also be considered. If one assumes that the 617 paediatric patients ICER estimates will be eligible for Kymriah and the 6,223 patients eligible for Yescarta each year all receive treatment, the cost to the US healthcare system at large would be just shy of $4bn. Put in the perspective of all US healthcare spending, this is about a tenth of 1%.

ICER attempts to make an evaluation of the national implications of the new treatments in its budgetary impact analysis – something for which the group has been criticised in the past. ICER sets $915m in annual spending for a new drug as a threshold that will help keep health spending in line with growth in gross domestic product.

Kymriah does not hit this threshold, but Yescarta does. To meet it payers would need to limit Yescarta treatment to just 32% of eligible patients.

These micro and macro factors could shift as CAR-T researchers attempt to expand into additional indications. Novartis has sought FDA approval for Kymriah to be used in a similar DLBCL population, which will not meaningfully increase costs. Trials for both therapies are under way in other blood cancer settings.

Development-stage competitors like Juno Therapeutics, Bluebird Bio and Cellectis also have the potential to expand the eligible population, increasing the risk that individual payers will suffer growing costs and that decision-makers will see the CAR-T field as a budget-busting science.

These will be among the factors that ICER’s expert panel will debate when it meets in March to review the draft evidence report along with public comments. It could very well be that Kymriah’s small, youthful population will represent the best-case cost-effectiveness scenario as CAR-T science advances and eligible patient numbers grow. That is, unless drug makers begin cutting the price of these very complex treatments.

To contact the writer of this story email Jonathan Gardner in Virginia at [email protected] or follow @ByJonGardner on Twitter