Pharma Giant to Bill Taxpayers $475,000 Per Patient for New Rx

Jaw-dropping price tag for new cancer drug …

(BLOOMBERG) The FDA’s approval of Novartis AG’s breakthrough therapy for a deadly form of leukemia opened the door to a new class of treatments even as its $475,000 price tag reignited the debate on how to value potentially life-saving drugs.

U.S. taxpayers will foot the bill for the latest FDA-approved cancer drug from Novartis. The price tag: $475,000 per patient. PHOTO: Andrew Hecht, CC

The FDA recently approved the radical new one-time treatment from the Swiss drugmaker.

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“We’re entering a new frontier in medical innovation with the ability to reprogram a patient’s own cells to attack a deadly cancer,” FDA Commissioner Scott Gottlieb said.

The therapies, known as CAR-T, raise a host of questions, including who will receive the treatments and how to pay for them.

Novartis is attempting to address the pricing question with a new type of agreement: for patients whose care is covered by U.S. government programs, the company will only get paid if patients show signs that the treatment is working within a month of getting it.

“This will support sustainability of the health-care system and patient access while allowing a return on our investment,” Novartis executive Bruno Strigini said on a call.

The company is wading into a new arena of performance-based pricing, said Sam Fazeli, a Bloomberg Intelligence analyst.

“We’re not used to drugs curing people” of major diseases like cancer, he said. “It’s a paradigm shift.”

The U.S. health-care system has grappled with the pricing issue before. In 2013, Gilead Science Inc. introduced an $84,000 cure for the viral disease hepatitis C, prompting a nationwide debate over drug costs. And new cancer treatments that have greatly extended some patients’ lives can cost $150,000 a year.

Yet the almost half-million-dollar price tag on the Novartis CAR-T drug is a new benchmark, and more are likely to follow, with similar new therapies for blindness, blood disorders, and other cancers. READ THE FULL STORY AT BLOOMBERG.COM.