WASHINGTON, DC — A new analysis by cancer patients and experts at Brigham and Women’s Hospital/Harvard Medical School shows that Novartis’ CAR-T drug, Kymriah, is overpriced by at least $315,000 per treatment.
The in-depth analysis, published today on the Health Affairs Blog, factors in Novartis’ research and development costs, production cost, royalties, patient assistance programs, rebates, and more. The paper finds that Novartis will make a 65 percent profit on Kymriah — more than 2.5 times what the drug manufacturer needs to cover its full investment, plus reap historic profit margins while continuing its investments in research and development.
The authors, three faculty members in the Division of Pharmacoepidemiology and Pharmacoeconomics and two cancer patients, wrote, “Novartis took a drug developed with significant investment from US taxpayers and is on course to make substantially more than its already healthy performance. We believe Novartis could cover both its historic margins and continuing R&D spending at a retail price of $160,000.”
The authors include Paul Kleutghen, a former pharmaceutical manufacturer CEO, and David Mitchell, president and co-founder of Patients For Affordable Drugs. Both have incurable blood cancers and stand to benefit from future CAR-T discoveries. Brigham and Women’s Hospital drug policy experts Ameet Sarpatwari and Aaron Kesselheim and economist Mehdi Najafzadeh co-wrote the piece.
Novartis chose to price its drug at almost a half-million dollars per treatment despite taxpayers spending more than $200 million to invent the drug. It sets an alarming precedent for future CAR-T and gene therapies, of which there are almost four dozen in development.
The authors stress the need for greater transparency into pricing decisions for drugs invented using taxpayer funding, and they request the National Institutes of Health (NIH) use its authority to ensure reasonable prices for drugs developed using its intellectual property.
Those options include NIH:
- Creating an advisory committee to assist it in negotiating end prices.
- Requiring that patients in the US be charged no more than the average price in six other wealthy nations.
- Issuing a request for information on approaches NIH could use to address downstream pricing issues when working with manufacturers to develop and commercialize a drug.