An interview with Russel J Spjut, PharmD, formulary management clinical pharmacist and consultant at Formulary Intel Consulting.
It seems CAR-T therapy seems to have kind of taken managed care by surprise. From your experience what has the reaction to these approvals been?
I think it was one of those things that we have all heard the scientific efforts going on in the gene therapies and we heard the term CAR-T therapy and those sorts of things come out, but we had seen so many things like that go by the waste side that had shown promise in an early stage clinical trial, and the technology behind it was quite interesting and new but it didn’t pan out quite so well in clinical trials. So I think yes, you are right that this was one of those things that was in development, but we actually didn’t know we were going to see it and didn’t know we were going to see it so quickly.
So yeah, it’s been an interesting reaction in the managed care world to see these two new approvals, you know drugs that are in the hundreds of thousands of dollars in total treatments that could pass a million dollars once you include hospitalizations and all the potential treatment for adverse effects and those sorts of things. I think it’s caused a bit of a panic and I think it’s going to force some innovation in managed care, and I think that it’s going to be a great thing. But you are completely right there, we were a little unaware that we were going to see something come and everyone is scrambling to find the right answers on how to cover these and how to handle all of it.
Can you give us a quick overview of the two CAR-T therapies that have been approved for the treatment of hematological malignancies?
The CAR-T therapies, it’s kind of cool—it’s the future of medicine, you know, it’s the things that 10 or 20 years ago would have called futuristic and maybe even Sci-Fi almost. But, the basic premise behind the CAR-T therapies—at least the ones that are approved today—is that we take and remove white blood cells, immune cells, from a patient in the hospital, they get sent into the lab where they use a viral vector to inject new genetic information into the patient’s own T cells which causes the T cells to produce what is called the chimeric antigen receptor—which is the CAR part in CAR-T. It’s a receptor that has a binding domain that can bind with tumor antigens. So it specifically targets binding to these specific cancer types. And then the internal part of the receptor then activates that T cell to go ahead and attack that tumor cell, and hopefully if it turns out well for the patient, it’s going to eradicate that cancer. And I think it’s really important in the blood cancer space because we’ve had standards of treatments that could include maybe a bone marrow transplant or some sort of chemotherapy, but once your patients have gotten to the end of their treatment algorithm, there really haven’t been any options. You tried a few things, and if it doesn’t work, you are kind of out of luck. You pretty much just have to hang on and hang on for as long as you can. So, to see these two new drugs, Kymriah and Yescarta, approved for use in patients who have tried standards of therapy and to have seen the remission rate that we’ve seen of these drugs in clinical trials, it’s quite an exciting development for these patients to have another option—something that produces a pretty high rate of remission for these patients.
You touched on the need to innovate in order for the system to handle the introduction of CAR-T therapies. Can you tell use a little bit about the innovative payment models that we may see emerge?
I think the biggest challenge here is if we remove all the cost portion of this, I don’t think anyone would ever fight paying for these or providing these because they have pretty good clinical data and we are using them in patients that don’t have any other options. But then all of a sudden, the cost of these drugs for hundreds of thousands of dollars for the drug, and like I had mentioned treatment costs related to infusion of these drugs and then all of a sudden everyone kind of gets skittish.
I’ve seen a few different models out there and it comes down to no single health plan and no single payer wants to pay for the complete cost of this drug up front knowing that the patient is likely not going to be on their specific plan long enough to really get the complete benefit of the drug. And so we’ve seen a few different things thrown out there for different ideas of how to pay for this and I think the one that’s been thrown out more than others is to have some sort of delayed payment model over time where the payer today begins making payments towards the manufacturer of the drug for the cost of the drug and if the patient moves next year to another health plan then that health plan would have to assume the remaining payments and keep paying for that treatment even though the treatment itself is over.
The challenge with that though is how do you force a new payer to take over the payment of a drug that has already been given. It’s probably going to take an agreement among the largest payers within the country—that yes, as the member moves from one plan to another, that we will assume that payment or some sort of legislation that is going to count that to happen.
The other idea that I think is interesting that has been thrown out is to kind of consider these types of therapies under the same model that we do for end stage renal disease, and instead of having commercial insurers cover these patients, come up with a model where CMS covers these patients for these kinds of therapies. The challenge there though is obviously the government doesn’t have unlimited funding to pay for those sorts of things, so we would have to come up with ways where either increased tax revenue, we maybe increase the Medicare tax, or we have health plans contribute some of their revenues towards a shared risk pool under CMS that would cover these patients.
Continue to page 2
Then I think the other important piece that gets talked about a lot is, like I mentioned high remission rates in the 70- and 80%, but still leaves 20% of patients who are going to receive these therapies who are not going to respond, and I think both the current manufacturers are open to some sort of risk share and not charging for patients who don’t have a remission, and I think that is an important piece. If we are going to charge this much for a kind of a therapy, then we should have to pay for a therapy if it doesn’t work for a patient.
ICER determined that both Yescarta and Kymriah are clinically valuable relative to their current pricing. Can you discuss this kind of juxtaposition between the sticker-shock regarding the initial investment and the long-term clinical value of these drugs provide?
I think most everyone that I have talked to within managed care does agree with the ICER conclusion that for patients that have tried other therapies and are at the end of their traditional treatment path these are therapies that are financially cost-effective over the long run. It’s just when you have a lot of populations that overturn every year, a single payer doesn’t want to be on the hook for something that they are not going to see the complete benefit for.
I think that is where that juxtaposition comes in where a payer doesn’t want to be on the hook for something that’s only going to be beneficial to them for a few months. That is where the biggest challenge comes in. It’s a one time—for Kymriah for example—it’s a one-time infusion, over $400,000 for the infusion, and then it’s done and hopefully the patient retrieves remission and never has to deal with it again. And so that one-time payment is hard to reconcile if that patient is not going to stay on your plan for the next couple of decades.
I think there definitely are some health plans where some employers have a really steady population and they’re probably not going to have as much of a challenge with this. Some employers have health plans and patients that will stay with them for decades, and in those cases, they probably aren’t as worried as this, but in a market where they have a lot of patient turnover, it’s going to be a lot more of a worry and a lot more of a consideration on how to make sure they spread the financial risk for these kinds of treatments.
Another issue seems to be that there are significant post treatment costs that are incurred in the spectrum of CAR-T treatment. So, my question is do these “back-end” costs create a challenge for managed care?
I think that is another layer of challenge even beyond what we’ve already talked about. If we are pushing a total treatment cost of over a million dollars and the drug is only $300,000 or $400,000 that means the ancillary services for this treatment are actually more than the actual drug itself. It may be one thing to work with the manufacturer to spread payments out over time, but are you going to be able to get hospitals and providers to agree to that same kind of model where they are not going to get paid right up front? I don’t think that is going to be as easy of a conversation. That is probably going to be one of the bigger hurdles to overcome. Once we nail down a payment plan for the drugs itself, then we are going to have to come up with an even more innovative plan to pay for the entire services surrounding the infusion.
I think that is going to have to come through a lot of innovation. Maybe it is even something like the manufacturer of the drug pays for a certain amount of the hospitalizations themselves and then that gets all bundled together in the payments over time that the insurer makes to them or something similar to that. It’s going to require a lot of innovation, and a lot of thinking to get this financially viable which I think is why some are suggesting that CMS model and are having a model similar to the end stage renal disease where all of this falls under CMS together and if health plans are paying part of their revenues into that risk share then no one has to worry about who is going to pay what and when, it’s just all a shared risk and CMS is handling all of that in the background. That may be where we end up because of its simplicity of having a single payer paying for these types of therapies.
Finally, are there any other challenges that you think need to be addressed in order for the health care system to increased access to CAR-T therapy?
I think the other thing that has made managed care professionals a little bit more nervous about this area is that we know there is a lot of these drugs in the pipeline too. The number I have heard is over 400 therapies in clinical development currently. Whether its CAR-T or other similar types of therapies, and obviously we know that all 400 aren’t going to make it to market and be approved but even if only 10% of those we see over the next decade, 40 of these types of therapies come to market, it really expands the space, it really makes it a crucial area we need to focus on.
I think today is the day to make sure we have these discussions and I think it is happening, but I hope we don’t lose focus on finding a long term solution knowing that there is going to be an expansion. Some of these are targeting more common cancer types where hopefully we’re going to see some of these for solid tumors. Imagine if a therapy like this comes out for a cancer as common as colon cancer or breast cancer, and the potential financial impact that will have on health care. I think it is something we all have to keep in mind and hopefully the manufacturers also keep in mind the fact that health care resources in the US aren’t unlimited and even though at this point we’ve been able to come up ways to pay for most health care in the United States, if we see all 40—or the potential 40 drugs—over a decade and they all cost this much, eventually something is going to break and the health care system is not going to be able to support payment of these types of drugs. I hope manufacturers keep that in mind too and really drive the cost down on their end to make sure that we all work together to make sure the patient gets the treatment they need, health care remains viable, and the pharma companies are rewarded for the developments they put into these drugs.
Listen to the First Report Podcast here podcast here.