Oncology Live®
Vol. 19/No. 8
Volume 19
Issue 8

Debating Value Versus Cost for Immunotherapy


In March, the President’s Cancer Panel issued a report acknowledging the financial toxicity associated with cancer care across the spectrum of treatments and suggesting potential remedies.

Joseph Alvarnas, MD

Joseph Alvarnas, MD

Joseph Alvarnas, MD

The high costs of cancer drugs have drawn criticism and scrutiny for a number of years, but sticker shock reached a new level recently over the price tags attached to the first of what are expected to be a growing number of chimeric antigen receptor (CAR) T-cell therapies. Up-front prices are approaching $500,000 for a 1-time treatment.

Economic analyses suggest that the high costs are justified once the survival rates, durability, and quality of life the therapies provide are taken into account. Similar studies of checkpoint inhibitors and other immunotherapy drugs, which can cost more than $100,000 per patient per year, have also concluded that their prices are often appropriate given their efficacy.

In some situations, however, the costs of new therapies are so high that they have been judged unreasonable for the benefits provided or they threaten to cause unacceptably large increases in national healthcare spending. Globally, several countries regularly use cost-benefit analyses to determine if and when their healthcare systems will pay for expensive therapies. The United States does not. Concern over the costs of immunotherapies and access to new cancer drugs is now contributing to increasingly urgent calls for adoption of universally accepted value frameworks in this country.

In March, the President’s Cancer Panel issued a report acknowledging the financial toxicity associated with cancer care across the spectrum of treatments and suggesting potential remedies (Figure 1).1 Topping the list is the need to develop a framework with which to evaluate anticancer therapies that takes into consideration information on clinical outcomes, toxicities, impact on quality of life, and costs.

Studies Analyze CAR T-Cell Therapies

Figure 1. Key Component sin Pricing Equation1

Drug prices “often do not reflect the benefits experienced by patients. Steps must be taken to better align drug prices and costs with their value. Achieving better alignment could improve the quality of cancer care; create incentives for development of innovative, effective new drugs; and help address increases in drug spending that are threatening to put high-value drugs out of reach for some patients,” the report said. “Developing and implementing a widely accepted value framework for cancer drugs is a critical step toward value-based pricing.”Since a key component of any value equation is the effectiveness of the treatment being evaluated, the 2 FDA-approved CAR T-cell therapies have fared well in early analyses despite their high price tags.Last August, the FDA granted the first approval for tisagenlecleucel (Kymriah) for treating patients up to age 25 years with B-cell precursor acute lymphoblastic leukemia (B-ALL) that is refractory or in a second or later relapse. Novartis announced a $475,000 price tag; with hospital markup, preparatory chemotherapy, management of adverse events and other factors, the total cost of treatment could reach $1.5 million per patient.2 The company established an outcome-based payment arrangement for Medicare and Medicaid patients, under which CMS won’t pay for patients who do not respond in the first month of treatment. In January, the FDA additionally granted a priority review for tisagenlecleucel for adults with relapsed/refractory diffuse large B-cell lymphoma who are ineligible for or who have relapsed after autologous stem cell transplant (SCT).

The second CAR T therapy, axicabtagene ciloleucel (axi-cel; Yescarta), was approved in October for the treatment of adult patients with relapsed or refractory large B-cell lymphoma after at least 2 lines of systemic therapy. Gilead/Kite Pharma set the price at $373,000. As with tisagenlecleucel, total treatment costs can far exceed the sticker price.

The drugmakers and CAR T advocates argue the prices are justified given the need to produce custom engineered T cells for each patient and the therapies’ striking effectiveness for children and adults who otherwise face poor prognoses. A new analysis by the Institute for Clinical and Economic Review (ICER) endorses the cost-effectiveness of the 2 treatments, projecting that the costs per quality-adjusted life years (QALYs) over patients’ lifetimes will come in below commonly accepted dollar thresholds in most scenarios.3

“With the caveat that we’re basing this on some very early survival data, we feel that both the substantial gains in life expectancy and quality of life, as well as cost differences against another active agent that are not as great, yield a cost-effective result,” said Dan Ollendorf, PhD, chief scientific officer for ICER, in an interview with OncologyLive®.

The analysis found that even after a $100,000 markup, tisagenlecleucel for B-ALL costs less than $50,000 per QALY and well under the commonly used $150,000-per-QALY threshold over a 7-year time horizon. Compared with the chemotherapy drug clofarabine, tisagenlecleucel had an incremental cost-effectiveness ratio per QALY of close to $46,000, due to much longer survival. Axi-cel for B-cell lymphoma achieved the $150,000/QALY threshold and had an incremental cost-effectiveness ratio per QALY of about $136,000 compared with chemotherapy (Figure 2).3

However, the much larger pool of patients who are eligible for treatment with axi-cel means the therapy could have an unacceptably large impact on total US healthcare spending, the report said. Only one-third of eligible patients could be treated annually at the $150,000/QALY price before exceeding a budget impact threshold of $915 million, whereas tisagenlecleucel use would not reach that figure with its current indications.

The report notes a number of qualifications to its conclusions. The CAR T studies it references are all single-arm trials, allowing for possible selection bias, and they include fewer than 100 patients and have a median follow-up of less than 2 years. Vinay Prasad, MD, MPH, who served as an expert reviewer for the report, described it as “very meticulously well done” but said that the key cost-effectiveness findings are based on extrapolated effects on longterm survival that have not been confirmed.

Figure 2. CAR T-Cell Therapies Compared With Chemotherapy3

He noted that updated results from the pivotal phase II ELIANA clinical trial of tisagenlecleucel were published in February 2018 but included no results beyond April 2017.4 “There’s a big gap in between, and one wonders, why can you not update your data? When you do an uncontrolled study like this, there’s no reason why you shouldn’t update the data to give the most accurate estimate,” said Prasad, an assistant professor of medicine at the Oregon Health and Science University in Portland. “It can really revise cost-effectiveness dramatically if those results are different than what the models are postulating.”Prasad said results from other studies show the importance of continuing to track patients for several years. The results of a study published in February of a different CAR T therapy, 19-28cz, for adults with relapsed B-ALL, showed more relapses occurred as time went on; with a follow-up of 29 months, the median event-free survival was 6.1 months.5 In the ELIANA study of tisagenlecleucel, event-free survival fell from 73% at 6 months (95% CI, 60%-82%) to 50% at 12 months (95% CI, 35%-64%). Further data have not been released.

The ICER report “has to make a lot of assumptions,” said Anna Kaltenboeck, MA, senior health economist and program director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York City. “We don’t actually know what the long-term survival looks like. None of these studies are long enough to tell us that. It becomes a question of whether, at the last point of measurement, that is a proxy for what long-term survival looks like. Any assessment has to extrapolate from there.”

Ollendorf noted that the ICER report does consider that remissions from CAR T-cell therapy may not last as long as projected. “There’s a scenario analysis that essentially assumes that the pattern of early relapses continues over time, and in that case, the cost-effectiveness figures look much less favorable,” he said.

The report notes that another independent analysis of CAR T-cell cost-effectiveness had similar results. A “mock technology appraisal” conducted for the United Kingdom’s National Institute for Health and Care Excellence, using a different set of cost and time variables, calculated an incremental cost-effectiveness ratio of £49,994/QALY ($65,000/QALY) in favor of tisagenlecleucel versus clofarabine for B-ALL in patients younger than 30 years.6

Novartis also sponsored an analysis of tisagenlecleucel.7 The findings showed the therapy provides an increase in QALYs over a 20-year time horizon compared with clofarabine monotherapy, clofarabine combination therapy, blinatumomab (Blincyto), other salvage chemotherapies, and allogeneic SCT. The analysis concluded that Novartis could set an even higher price for tisagenlecleucel— for example, $721,000, in a comparison with clofarabine monotherapy—and still meet the $150,000/QALY threshold.

Both skeptics and advocates of CAR T effectiveness note that comparing it with other therapies is complicated by the fact that the alternative options can also be very expensive. Blinatumomab, for example, costs more than $170,000 for a typical treatment and is often followed by a bone marrow transplant that CAR T treatment might not require, said Joseph Alvarnas, MD, director of value-based analytics at City of Hope in Duarte, California, and chair of the American Society of Hematology Committee on Practice.

Subsequent SCT is also more common after patients are treated with clofarabine or chemotherapy, increasing costs. The ICER report shows that 10.5% of patients treated with tisagenlecleucel underwent SCT compared with 14.8% after clofarabine and less than 3% of those who received axi-cel underwent SCT compared with 29.9% for chemotherapy (Table).3

On the other hand, Prasad said that comparing CAR T-cell therapies with a less effective but still expensive drug like blinatumomab makes them “look better” without questioning whether blinatumomab’s price is justified in the first place. Ollendorf said ICER addresses that criticism by comparing each therapy with nontreatment and producing cost-effectiveness ratios than can be compared with commonly accepted thresholds.

Even if a therapy dramatically extends survival of young patients and is arguably worth the high cost, Prasad argued that does not mean it should be very expensive. “If I was in a car accident and I cut my femoral artery, and I was bleeding out and somebody came by with a belt and they tied it around my leg, and you did an ICER report of that, you could charge like $4 million for that belt,” he said. “Should we pay any sum of money if something does cure a fraction of people? It’s an open question. Somebody could have charged $1 million for a polio shot. You could charge a lot of money for the [measles, mumps, and rubella] vaccine. All these things we take for granted could have really horrendous costs and still be ‘cost-effective.’”

For advocates of CAR T-cell therapies, this criticism illustrates the challenge of making value comparisons about a unique new type of treatment. Alvarnas said Prasad’s belt analogy leaves out the reasons why CAR T-cell therapies are so expensive. “It would mean that to save the life of that patient, you built the factory that built the belt and you had the cows at pasture that provided the leather and the ore mines that provided the metal for the clasp,” Alvarnas said. “It’s a very different model than being able to go to the shelf and build a belt. This is a different kind of therapeutic. To my knowledge we’ve never had a ‘medicine’ where you’ve had to make it on a custom basis for every patient that you have. And that ain’t cheap.”

Figure 2. Stem Cell Transplantation After Treatment3

Checkpoint Immunotherapy Comparisons

For Alvarnas, the efficacy of tisagenlecleucel and axi-cel for patients with poor prognoses and the promise of more highly effective CAR T-cell therapies ultimately trump concerns over their high cost. “A living person as compared to a nonliving person always wins the day when it comes to the value of a therapeutic. To the end that these therapeutics are able to take patients who otherwise would be incurable and potentially untreatable and cure a significant number of them, it probably merits a different kind of discussion around cost as opposed to therapeutics that don’t have that differentiated delivery,” he said.Questions about the cost-effectiveness of CAR T cells have drawn interest because of the treatment’s novel mechanism and high costs, but similar analyses have also been conducted for other immunotherapy drugs. In 2016, ICER published a report on therapies for advanced non—small cell lung cancer (NSCLC), comparing 3 tyrosine kinase inhibitors (TKIs) with platinum-based chemotherapy doublets and 3 anti–PD-1/PD-L1 immunotherapies with single-agent chemotherapy with docetaxel.8 The TKIs are afatinib (Gilotrif), erlotinib (Tarceva), and gefitinib (Iressa) and the PD-1/PD-L1—targeting therapies are nivolumab (Opdivo), pembrolizumab (Keytruda), and atezolizumab (Tecentriq).

The report found all 6 therapies have important clinical benefits over previous options and that the PD-1/PD-L1 drugs, in particular, offer “substantial improvements in both length of life and in quality-of-life outcomes.”9 However, although the TKIs had “reasonable” cost-effectiveness ratios below the $150,000/QALY threshold, the PD-1/ PD-L1 immunotherapies exceeded the threshold; nivolumab came in at $415,950/QALY. “Their list prices outstrip the range needed to provide reasonable long-term value for money,” said David Rind, MD, MSc, chief medical officer of ICER.

Rather than comparing immunotherapies with chemotherapy alone or to nontreatment, a number of analyses have evaluated combinations and sequencing of therapies, with a variety of results. For example, one study found that for patients with treatment-naïve BRAF wild-type advanced melanoma, the most cost-effective treatments are first-line pembrolizumab every 3 weeks followed by second-line ipilimumab or first-line nivolumab followed by second-line ipilimumab.10

Another study of first-line treatment of metastatic melanoma concluded that nivolumab monotherapy is more cost-effective than the combination of nivolumab plus ipilimumab, with PD-L1 expression status affecting the degree of difference.11 Yet another analysis concluded that first-line nivolumab plus ipilimumab followed by chemotherapy had the best cost/QALY ratio compared with 6 other options for advanced melanoma.12

Kaltenboeck said CAR T cells have lately drawn attention away from checkpoint inhibitors in discussions of cost-effectiveness but the latter merit an ongoing focus because they are so widely used. “It’s not just that these are expensive therapies; it’s also that the patient populations are large. When you start to talk about lung cancer, breast cancer, these are cancers that people have with great frequency. When you talk about value, it behooves you to think not only about that cost-effectiveness component but also in terms of the budget impact,” she said. ICER estimated that the large candidate population for treatment with nivolumab for NSCLC could push annual spending on that drug alone over the report’s $904 million budget impact threshold.

In addition to ICER, at least 4 other organizations have frameworks or tools to help define the value of cancer treatments: the European Society for Medical Oncology, the American Society of Clinical Oncology, the ABACUS program at Memorial Sloan Kettering Cancer Center, and the National Comprehensive Cancer Network.13

In the United Kingdom and some other European countries, cost-benefit reports are regularly used by national health systems to determine whether and when to pay for new drugs. In the United States, by contrast, the price and availability of new therapies is largely determined by drug company market research and revenue calculations, Kaltenboeck said. Prasad argued that greater use of cost-effectiveness analyses could help add transparency to an opaque system. “We are choosing to do some things instead of doing other things with that money. That happens in every society. But in our society, it’s hidden and the choice we’re making is actually a very poor choice and we don’t see it,” Prasad said. “In other countries, the choice is explicit and visible, and they are saying we will not pay for drugs that benefit some few people for a few months when we could take that money and pay for interventions that benefit a lot of people for a lot more months.”


  1. Promoting Value, Affordability, and Innovation in Cancer Drug Treatment. A Report to the President of the United States from the President’s Cancer Panel. Bethesda, MD; President’s Cancer Panel; 2018. prescancerpanel. Accessed March 19, 2018.
  2. Szabo L. Cascade of costs could push new gene therapy above $1 million per patient. Kaiser Health News. October 17, 2017. news/cascade-of-costs-could-push-new-gene-therapy-above-1-millionper- patient/. Accessed March 6, 2018.
  3. Institute for Clinical and Economic Review. Chimeric antigen receptor T-cell therapy for B-cell cancers: effectiveness and value. Evidence report. Institute for Clinical and Economic Review website. uploads/2017/07/ICER_CAR_T_Evidence_Report_021518.pdf. Published February 15, 2018. Accessed March 6, 2018.
  4. Maude SL, Laetsch TW, Buechner J, et al. Tisagenlecleucel in children and young adults with B-cell lymphoblastic leukemia. N Engl J Med. 2018;378(5):439-448. doi: 10.1056/NEJMoa1709866.
  5. Park J, Riviere I, Gonen M, et al. Long-term follow-up of CD19 CAR therapy in acute lymphoblastic leukemia. N Engl J Med. 2018;378(5):449- 459. doi: 10.1056/NEJMoa1709919.
  6. Hettle R, Corbett M, Hinde S, et al. The assessment and appraisal of regenerative medicines and cell therapy products: an exploration of methods for review, economic evaluation and appraisal. Health Technol Assess. 2017;21(7):1-204. doi: 10.3310/hta21070.
  7. Hao Y, Eldjerou LK, Yang H, Qi C, Globe D. Cost-effectiveness analysis of CTL019 for the treatment of pediatric and young adult patients with relapsed or refractory B-cell acute lymphoblastic leukemia in the United States. Presented at: ASH 59th Annual Meeting & Exposition; December 9-12, 2017; Atlanta, GA. Abstract 609. content/130/Suppl_1/609.
  8. ICER. Treatment options for advanced non-small cell lung cancer: effectiveness, value and value-based price benchmarks. Final evidence report and meeting summary. ICER website. 2016/10/MWCEPAC_NSCLC_Final_Evidence_Report_Meeting_ Summary_110116.pdf. November 1, 2016. Accessed March 6, 2018.
  9. ICER releases final report with pricing and coverage implications for treatment of advanced non-small cell lung cancer with TKI and PD-1 drugs [news release]. Boston, MA: ICER; November 1, 2016. Accessed March 6, 2018.
  10. Kohn CG, Zeichner SB, Chen Q, Montero AJ, Goldstein DA, Flowers CR. Cost-effectiveness of immune checkpoint inhibition in BRAF wild-type advanced melanoma. J Clin Oncol. 2017;35(11): 1194-1202. doi: 10.1200/JCO.2016.69.6336.
  11. Oh A, Tran D, McDowell L, et al. Cost-effectiveness of nivolumab-ipilimumab combination therapy compared with monotherapy for first-line treatment of metastatic melanoma in the United States. J Manag Care Spec Pharm. 2017;23(6):653-664. doi: 10.18553/ jmcp.2017.23.6.653.
  12. Tarhini A. Report on economics of checkpoint inhibitors nivolumab and ipilimumab in melanoma. Presented at: SITC 2017; November 8-12, 2017; Oxon Hill, MD.
  13. Helwick C. ASCO plenary studies: assessing the ‘value’ of new treatments. The ASCO Post. August 10, 2016. 10-2016/asco-plenary-studies-assessing-the-value-of-new-treatments/. Accessed March 6, 2018.
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