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Signage is displayed on the exterior of the Novartis AG Institutes for BioMedical Research building in Cambridge, Massachusetts, U.S.

(bloomberg)

(Bloomberg) -- Novartis AG’s breakthrough cancer drug Kymriah has been approved in Europe. Now comes the debate about its hefty cost.

In Germany, Novartis has set a price of 320,000 euros ($371,000) that’s now subject to negotiation with authorities, Pascal Touchon, head of the drugmaker’s cell and gene therapy business, said in an interview. That’s the list price to treat a form of childhood leukemia and a type of lymphoma in adults. Similar discussions are playing out elsewhere in Europe.

Drugmakers like Novartis and Gilead Sciences Inc. are seeking coverage for a new wave of one-time therapies that offer potential cures for a range of devastating diseases but carry big price tags. While patients and their families clamor for the life-saving treatments, governments want to increase access while curbing health spending.

“These technologies and innovations are very welcome because they can save the lives of people who had no solution before,” said Lieven Annemans, a professor of health economics at Ghent University in Belgium. “But the prices of all these medicines aren’t cheap.”

Hunt and Kill

A year ago, Kymriah became the first in a new type of treatments known as CAR-T to win approval in the U.S., entering the market at a price of $475,000 for the deadly childhood leukemia. It was approved later for another type of cancer at a price of $373,000. The therapies involve extracting immune cells from the body and genetically engineering them to hunt and kill cancer cells after they’re put back into the patient.

Novartis’s treatment was cleared last month in the European Union. It has temporary authorization in France, meaning some patients there have access to it already, the company said. In Germany, one center has met qualifications to offer it to patients and the Swiss drugmaker said it’s working to set up more sites in the coming weeks. Kymriah may be available in Austria next.

“We’re working very actively with reimbursement authorities across Europe to set a fair price,” Touchon said.

Drugmakers are fighting for reimbursement on a number of fronts as President Donald Trump vows to rein in drug prices in the U.S. Meanwhile, European health systems are warily eyeing expensive new technologies that increase pressure on strained budgets.

Agreement Clinched

Uncertainty over the long-term sustainability of the results and the one-time prices for the therapies pose challenges for health-care systems, according to the health economist Annemans. Governments as a result are looking at contracts that refund money if the treatments don’t deliver or spread out the costs over a longer period, he said.

Gilead, which makes rival CAR-T therapy Yescarta, estimates there will be about 7,700 patients with diffuse large B-cell lymphoma -- a form of blood cancer -- across the European Union who may be eligible for CAR-T therapies this year.

Patients have been prescribed Yescarta in France and those in Germany are expected to receive it soon, the U.S. company said in an email. The drugmaker said it’s talking with a number of governments and reimbursement authorities.

In Germany, Europe’s largest market for drugs, companies are allowed to set a list price for new therapies after they’re approved. Yet insurers negotiate discounts after a cost-benefit assessment run by a federal committee.

Novartis last week clinched an agreement with England’s state-funded health service to make the cancer therapy available to children in the first arrangement of its kind in Europe. Young patients could begin receiving Kymriah, which has a list price of about 282,000 pounds ($366,000), within weeks, the National Health Service said at the time.

Novartis is having “productive” discussions with U.K. health authorities about making Kymriah available for the form of lymphoma, but can’t comment on when and how that could lead to a potential approval, Touchon said.

Gilead’s Yescarta, which costs $373,000 per treatment in the U.S., was rejected in the U.K. last month. The country’s National Institute for Health and Care Excellence concluded its effects were comparable to those of standard treatment in some patients and needed more study.

To contact the reporter on this story: James Paton in London at jpaton4@bloomberg.net

To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Marthe Fourcade, John Lauerman

©2018 Bloomberg L.P.

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