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Gilead ‘open’ to considering value-based pricing for Yescarta with some payers

by Natalie Morrison
Gilead could be "open" to value-based pricing on a payer-by-payer basis for its B-cell lymphoma CAR-T therapy Yescarta, chief executive officer John Milligan said late on Thursday.
Many CAR-T experts speaking to APM recently questioned the fact that Gilead did not stipulate any pay-for-performance type pricing for Yescarta (axicabtagene ciloleucel), unlike Novartis with Kymriah (tisagenlecleucel).
When Kymriah was approved, Novartis detailed an outcomes-based pricing structure under which payers only reimburse for the product if patients respond to therapy within the first month. Kymriah’s list price is $475,000.
Despite Yescarta targeting a different indication to paediatric acute lymphoblastic leukaemia CAR-T Kymriah, it had been expected that Gilead would follow suit and offer similar outcomes-based payment, since Yescarta is only the second CAR-T (chimeric antigen receptor T-cell). It was also a surprise to many that Gilead is charging around $100,000 less, with a list price of $373,000 (APMHE 55293).
However, experts told APM Gilead may consider different reimbursement structures on a payer-by-payer basis, for instance with some risk-sharing approaches (APMHE 55298).
It seems this conclusion was accurate, as Milligan told investors on Gilead’s Thursday night third quarterly results call: “just touching on value-based pricing at first, we are in ongoing and active discussions with really all commercial and government payers, including CMS [the Centers for Medicare & Medicaid Services].
“And I can convey to you there are varying degrees of interest and ability to execute value-based contracts. It truly does vary by payer.”
Value-based pricing is slightly different to Novartis’ more set pay-for-performance structure, in that the aim is to pay an amount for a treatment based on the benefit patients, the healthcare system and society stand to gain. This is determined through health assessments and negotiations with payers, though historically it is largely a system used by European payers.
Milligan admitted there are a lot of operational complexities for payers besides government price barriers, “but we have communicated our openness to considering solutions - any and all solutions - to improve patient access, regardless of what they may be. It may end up not being value-based pricing; it could be something different. But we're very open to it.”
Still, Milligan stressed that in the past “we haven’t seen value-based pricing in oncology”, noting “it’s not the easiest to execute under current regulations, but we’re open to that,” according to Seeking Alpha’s transcript of the call.

Solid tumours and M&A

Many CAR-T commenters have also stressed the importance of targeting solid tumours. According to a recent Edison Investment Research report (APMHE 54971), the relatively small haematological malignancies space in which CAR-T drugs currently reside will soon become too crowded. Solid tumours is the bigger opportunity, it said.
Milligan reiterated the fact that Gilead and Kite have planned or ongoing clinical studies for CAR-Ts targeting CD-19 - as Yescarta does - or modified T-cell receptor therapies. These are to treat solid tumours as well as other B-cell malignancies and leukaemias, he said.
“Beyond these studies, Gilead and Kite will continue to invest in research and development in order to bring forward future generations of CAR-Ts and TCRs with a goal of increasing short and long-term complete response rates and improving safety,” he said.
Asked about further M&A after the ‘rapid’ Kite acquisition, Milligan said: “We see this [Kite’s] as a platform that will require continuous innovation. And so we are quite active in bringing in technologies, which will help us move this CAR-T forward.”
Gilead will continue to seek M&A, he said, noting “I would expect us to continue to be quite active in the coming years,” though declining to hint what the firm could be looking at in terms of targets.
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