ViewPoints: With no pricing war on the horizon in CAR-T, the sky's the limit for Gilead and Novartis

Proving that maybe one can have too much of a good thing, Gilead Sciences stepped into the forefront of what's sure to be another pricing debate over another efficacious drug with its buyout of Kite Pharma. Gilead's ample experience in facing off with drug pricing critics may come in handy sooner rather than later, as evidence suggests that it won't be facing pressure any time soon to keep prices down in the CAR-T marketplace.

Gilead is no stranger to public controversy; it has been often accused of price gouging in its HCV franchise, eventually sparking a payer rebellion over coverage for therapies like Harvoni (ledipasvir/sofosbuvir), which functionally cure the disease but at a hard-to-swallow cost. The strategy paid off nonetheless, as Gilead's HCV portfolio soon began printing money despite the blowback. (See ViewPoints: This means war! Impact of AbbVie's HCV deal with Express Scripts goes well beyond Gilead)

The company is confidently stepping into fray again, having just dropped about $12 billion to buy Kite Pharma and its CAR-T cell therapy, axicabtagene ciloleucel. While no prices have been set for Kite's product or the competing candidate from Novartis, Gilead is particularly open to pricing criticism for a therapy that could easily cost five times more than a course of Harvoni.  With its salty history with payers and the public as a backdrop, Gilead will also have to contend with outcries that it is profiting from taxpayer research dollars, via Kite's license from the National Cancer Institute (NCI).

Given Gilead's history, it's easy to imagine a scenario where it is cast as the pharma villain, independent of the price eventually set for axicabtagene ciloleucel. But for better or for worse, the burden of setting the initial price will fall on Novartis, which is likely to receive the first-ever CAR-T therapy approval in October for tisagenlecleucel-T. Importantly, Novartis' forward position gives it the opportunity to undercut Gilead just before its product comes to market, effectively making its $12-billion acquisition a bit more expensive if it needs to lower its price to match Novartis. (See Spotlight On: Reassessing the FDA's first CAR-T AdCom as Kite confirms there won't be a second one)

But David Epstein, who had helmed Novartis' Oncology and Pharmaceuticals units before joining Flagship Pioneering last year, has a different opinion on the market dynamics. He told FirstWord "I don't think it'd be a particularly smart decision" to compete based on price, at least in early stages of commercialisation. He argued that with only two products initially on the market, there will be a broad enough patient base for both manufactures to work out the kinks of their supply chains and their expected demand.  

Supporting a high ceiling for the products, Epstein said that he expects payers to tolerate lofty price tags given the products' efficacy and relatively small patient populations. "I see no reason why these interventions can't be priced in the mid-to-high hundreds of thousands of dollars," he said, noting a risk for "reputational blowback" at higher figures. He said the value added for patients that are "days to weeks from death" puts CAR-T therapies in a different category from products meant for incremental improvement in hundreds of thousands of patients.

In the absence of pricing war, that proposed half-a-million-dollar sticker price is likely to stick around despite the near simultaneous market entry of the two products. Though the therapies face initial approvals in different indications, eventual label expansions are expected to put the products in more direct competition. However, it is not yet clear if the two treatments are so closely squared-off in safety and efficacy that pricing and reimbursement will be the only differentiator. Epstein said "no one can say with a straight face" which product will prove more efficacious, particularly as conditioning regimens and the products themselves are continually refined.

Efficacy aside, the Institute for Clinical and Economic Review (ICER) has already put both companies on alert. It published a draft scoping document earlier this month saying that the group will be using overall survival as its go-to outcome for its yet-to-be-completed assessment of both CAR-T-cell therapies. ICER expects to release a draft version of its evidence report in December, followed by a comment period and a final report in March of 2018. The group has had an adversarial relationship with some pharmas and biotechs after claiming that certain drugs are priced above their value, but has seen its assessments gain traction with payers as an independent means of gauging reasonable drug prices. (See ViewPoints: ICER adds some teeth – albeit indirectly)

But Epstein was quick to point out that market share for CAR-Ts likely won't be decided by a battle between Kite/Gilead and Novartis, emphasising how quickly technologies in cell therapy are modified. He also had advice for the current players. "Shortening time to T-cell processing is job number 1….Job number two is to make the investment in improved therapies."

To read more ViewPoints articles, click here.