NVS Novartis AG

   By Donato Paolo Mancini and Carlo Martuscelli 
 

Novartis AG's (NOVN.EB) immunotherapy Kymriah is too expensive to be recommended for use in adults with B-cell lymphoma that have relapsed or haven't responded to first-line treatment, a U.K. regulator said Wednesday, despite the Swiss pharma giant offering a discount on its hefty list price--the first major setback for the company's drug in Europe.

The National Institute for Health and Care Excellence earlier this month recommended the therapy for use in pediatric patients with a different kind of blood cancer.

In a statement, NICE recognized that Kymriah had significant clinical benefits, with response rates of about 40% in two studies, and overall survival rates of about one to two years. But it justified its decision not to recommend the therapy for cancer patients with limited options because there is currently no data comparing Kymriah to salvage chemotherapy, the most common treatment currently used for that group. A spokeswoman added separately that cost was a determining factor in the decision.

"Although we could not recommend [Kymriah] for adults with lymphoma, we welcome further discussions around the cost-effectiveness of the treatment and engagement with stakeholders," NICE said.

Kymriah's list price for this indication is 282,000 British pounds ($371,000). Pharma companies typically offer sizeable discounts to access the British market, and negotiations usually see the U.K. succeeding in pushing those discounts further down. "I wouldn't be surprised if Novartis offered a 30% or 40% discount [to the list price]," said Bruno Bulic of Baader Helvea.

CAR-T is a kind of cell therapy that works by extracting blood cells, modifying them, and then reinjecting them into the bloodstream to attack the cancer. The infrastructure around the treatment can be very expensive. In the U.S., the cost of the drug can balloon to USD1 million, including hospital visits and other costs.

Last month, the same regulator also rejected Gilead Sciences Inc.'s (GILD) own homologue for similar indications because it was too expensive.

Markets observers and analysts say that pharma giants are under considerable pressure to price their drugs as evenly as possible across world markets. Confidential negotiations between regulators and companies help hedge against pressure, said Mr. Bulic. "There would be a dangerous precedent [otherwise]", he said.

While the decision is important for patients and it reinforces the idea that public health systems are driven to negotiate harder on discounts, the move has no immediate financial impact on the company, added Mr. Bulic, because sales aren't expected to reach levels that affect profitability before the next decade.

Novartis said that while it was disappointed and surprised by this preliminary decision, it recognizes that Kymriah is radically different from other treatments, and that it may be challenging to adequately compare it with existing therapies. The company said it is working with NICE to define relevant studies and will continue to support the recommendation of the treatment for patients with limited treatment options.

NICE's decision isn't final. It said that it'll consider any new evidence submitted to support the recommendation for Kymriah use in this category of patients in late October.

--Jonathan D. Rockoff contributed to this article.

Write to Donato Paolo Mancini at donatopaolo.mancini@dowjones.com and to Carlo Martuscelli at carlo.martuscelli@dowjones.com

(END) Dow Jones Newswires

September 19, 2018 13:19 ET (17:19 GMT)

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