Preemptive shaming assault on Novartis’ CAR-T pioneer underscores a disconnect on R&D costs

It’s no secret that taxpayers fund a lot of the basic science work done in the US. But should that early research support for new drugs translate into lower prices?

A group called Patients for Affordable Drugs thinks so, launching a preemptive strike against Novartis’ CAR-T drug CTL019— now up for an approval — demanding fair pricing in light of the $200 million-plus that was used to back the translational work on CAR-T in general. There’s no breakdown on what slice of that helped Novartis.

David Mitchell, Patients for Affordable Drugs

“I urge you in the strongest possible terms to price your CAR-T drug fairly in light of the fact that U.S. taxpayers invested hundreds of millions of dollars to develop CAR-T before your company became seriously involved,” David Mitchell, president of Patients For Affordable Drugs, wrote in the letter to Novartis chief Joe Jimenez.

That comment deserves some added context.

Novartis spent close to $9 billion on R&D last year, about 18% of revenue. The pharma giant spent more than $9 billion on R&D the year before that, and it will do the same in 2017. While it will likely publicly handle this gambit on pricing with its usual wooden (and very corporate) lack of feeling, it has no reason to apologize for what it charges for its CAR-T.

At one point the company had a large, 400-employee group devoted to cell and gene therapy and a blank-check approach to CAR-T from Jimenez that included huge support for the University of Pennsylvania. That strategy was scrapped, but Novartis paid dearly to stay a pioneer in this personalized medicine field, as Kite and Juno took their own independent approach in driving development.

Novartis CEO Joe Jimenez

The first CAR-Ts won’t be cheap by any standard. Revolutions in drug science don’t come cheap. But while Novartis and Kite and Juno and the others owe a debt to federally sponsored R&D in the field, the initial amounts provided by the feds are only a small part of the total.

The public doesn’t generally recognize that. But they should if we want to discuss drug pricing seriously. There are plenty of big issues surrounding pricing and reining in costs that deserve real debate. But this is the wrong approach on R&D.

The NIH is becoming more directly involved in drug development than ever before. That’s evident in two other stories in today’s edition, from Thomas Wynn’s decision to move from NIH to Pfizer and the new work on TCR engineering related to Kite. That move needs to be fostered, if we’re serious about getting new drugs to patients.

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Sr. Manager, Regulatory Affairs, CMC
CytomX Therapeutics San Francisco, CA
Marketing Associate - Demand Generation
Catalytic Data Science Charleston, SC
Associate Principal, Life Sciences Partnerships
Flatiron Health New York City or San Francisco

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