Health Insurers & Pharma Benefits: The New FDA
Will Kite Kill Cancer (Affordably)?
By Shlomo Maital
My university, Technion, is one of the few science universities with a President who is both a world-class scholar and successful entrepreneur. Prof. Peretz Lavie is a pioneer in sleep research, and his 10 patents have helped build two or three successful companies that treat sleep apnea, a common disorder that afflicts millions. In a guest talk to my Entrepreneurship class at Technion, Prof. Lavie explained that agreement by health insurance companies to pay for drugs or treatments is a more crucial obstacle for companies and inventors than perhaps even the FDA. Your drug may prove effective in Stage 3 clinical trials and pass the FDA, but – if it’s too expensive, insurers won’t pay for it and it is therefore doomed. As an entrepreneur, Lavie successfully dealt with this problem. By carefully collecting sleep apnea data, he was able to show the insurers why treatment was cost-effective.
Recently, we saw a great example of why insurers are the “new FDA”. Gilead Sciences developed Harvoni, a Hepatitis C drug that costs $94,500 a year. It competes with AbbVie’s $83,319 drug Viekira Pak. The FDA approved Harvoni. But America’s largest pharma benefits company (which provides drugs as part of health insurance) removed Harvoni from its approved list, saying it was more expensive than AbbVie’s drug Viekira Pak and not much more effective. Gilead’s stock plunged; it fought back and slashed its prices.
The key role of insurers came to the fore in recent days. Kite Pharma and its Israeli-born and educated CEO Dr. Arie Belldegrun has developed an experimental cancer treatment, a very expensive one, which costs hundreds of thousands of dollars. The complex diagram shows how it works. Briefly, here is how:
Cancer cells are removed from the patient’s body, treated – and then put back. The treated cells (unlike untreated cancer cells) trigger a powerful immune response.
To explain: Cancer cells cleverly shut down the body’s immunse system response; but Kite’s genetically engineered autologous T cell therapy fights back, tricks the cancer cells and restores the immune system’s ability to recognize and eradicate tumors. “In August 2014, Kite Pharma announced findings from its ongoing clinical trial: 12 of 13 evaluable patients with advanced B-cell malignancies had complete remissions (8 patients) or partial remissions (4 patients) resulting in a 92% objective response rate. The results support Kite Pharma’s plan to file an Investigational New Drug (IND) application in the fourth quarter of 2014 to initiate a clinical trial of Kite Pharma’s lead CAR-based product candidate, KTE-C19, in patients with DLBCL.”
Kite has a powerful strategic partner: Amgen, a huge biotech company. “In January 2015, Kite Pharma and Amgen entered into a strategic research collaboration and license agreement to develop and commercialize the next generation of novel Chimeric Antigen Receptor (CAR) T cell immunotherapies based on Kite’s engineered autologous cell therapy (eACT™) platform and Amgen’s extensive array of cancer targets.”
But the hitch is: will the health insurance companies and pharma benefits companies pay for this hugely expensive though lifesaving therapy? Kite is aware of the problem and is trying to deal with it.