A Japanese drugmaker is using value-based pricing in Europe for an expensive cell therapy used to treat the autoimmune disorder Crohn’s disease.
Nikkei Asian Review reported Monday that Tokyo-based Takeda Pharmaceutical would adopt the model for Alofisel (darvadstrocel), which the European Medicines Agency approved last March for patients who do not respond to currently available Crohn’s therapies and may have to receive surgery. The drug does not yet have US Food and Drug Administration approval.
Despite winning EMA approval for complex perianal fistulas in Crohn’s more than a year ago, Alofisel has encountered some difficulties securing so-called tertiary approval, a term used to refer to national-level payer coverage. UK drug-pricing watchdog the National Institute for Health and Care Excellence, for example, has so far declined to recommend Alofisel, noting that in a single clinical trial, Alofisel showed only a 14 percent improvement in beneficial effect compared with placebo and included only one year’s worth of data. NICE notes the list price of the drug is 54,000 pounds ($69,703.90) for a four-vial course of treatment, noting that the company has a commercial arrangement that would apply if the technology had been recommended.
Under the value-based pricing arrangement reported Monday, Takeda would reimburse part or all of the cost of the drug if patients using it do not see improvement. It is also considering similar models for other high-priced drugs.
A position paper by the company does not explicitly name Alofisel, but indicates support for value-based pricing while adding that value – defined as the outcome achieved for patients relative to costs – should be fundamental to drug prices, but can be difficult to measure.
Value-based pricing for high-cost therapies has gained ground in the US as well. One notable example is Novartis’ Kymriah (tisagenlecleucel), a CAR-T cell therapy for pediatric acute lymphoblastic leukemia that carries a list price of $475,000. For that therapy, the company formerly had an outcomes-based contract arrangement with the Centers for Medicare and Medicaid Services as part of a pilot program, whereby CMS would only pay if patients experienced a complete remission within 30 days of treatment. Outcomes-based pricing has also been used for Spark Therapeutics’ gene therapy Luxturna (voretigene neparvovec), used to treat a rare, inherited form of blindness.
A paper last year by University of Pennsylvania business professor Patricia Danzon outlined three affordability challenges to value-based pricing in widespread “mass diseases” like hepatitis C, diseases where a therapy can be curative and in orphan diseases. For mass diseases, she wrote, stratified rollout delaying treatment of stable patient and prioritizes those at high risk can be used to manage the burden on health budgets. Meanwhile, installment payments contingent on outcomes – an approach suggested for gene therapies like Luxturna – can be used for curative treatments. Orphan drugs raise affordability concerns due to an increase in prices and proliferation of orphan diseases, she wrote, but the statutory benefits of developing orphan drugs provide evidence against orphan drugs routinely carrying a higher value-based pricing threshold versus non-orphan drugs.
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