Magazine Article | November 8, 2017

Will Value-Based Drug Pricing Work?

By Camille Mojica Rey, Contributing Writer

This is the second in a two-part series on value-based healthcare. In Part I, Life Science Leader explored the role of the pharmaceutical industry in the shift toward value-based healthcare.

In August 2017, the FDA announced the approval of the first-ever gene therapy treatment. Novartis’ Kymriah was created to treat children and young adults with an aggressive form of leukemia called B-cell acute lymphoblastic leukemia, whose cancer has resisted standard therapies or who have relapsed. The treatment is unique in that it trains the patient’s cells to attack the cancer, but it is also the first-ever cancer treatment to come with a money-back guarantee. If the patient does not respond to the onetime $475,000 treatment within one month, there will be no payment to Novartis. This makes Kymriah a test case not just for the commercialization of gene therapy, but also for value- or outcomes-based payment models and arrangements.

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