On Thursday Novartis said that its cost of goods per Kymriah treatment is confidential commercial information, but analysts estimate it could be as high as $200,000.
The process is complex. Doctors remove T cells from each cancer victim and ship the material to its factory in Morris Plains, New Jersey. After re-engineering them to attack cancer, frozen cells are returned a couple weeks later for reinfusion into patients.
Additionally, Novartis partner Oxford BioMedica, which supplies a key ingredient, may be due $100 million over the next three years, plus royalties on sales.
Furthermore, competition is on the horizon. Gilead Sciences this week announced an $11.9 billion deal to buy Kite Pharma to gain access to a similar drug, while Bluebird Bio and Juno Therapeutics are all working on their own CAR-T therapies.
While Kymriah's price tag will grab headlines, it pales in comparison with some other gene therapy treatments.
For instance, UniQure's Glybera, for a very rare blood disorder, runs at about $1 million per patient. Meanwhile, GlaxoSmithKline’s Strimvelis, for so-called “bubble boy” disease, comes in at about $700,000 per patient.
Outcome Pricing
Novartis points out that some groups think the company could actually have charged more for Kymriah.
British health authorities, for instance, had said that up to $650,000 might have been justified if the treatment added years to children's lives.
Novartis plans to charge insurers and payers only when the drug proves to be effective one month into treatment, a so-called "outcome-based" pricing scheme that puts some of the risk of the drug on its manufacturer.