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While biologic drugs represent only about two percent of all U.S. prescriptions, they have accounted for 93% of the growth in net drug spending since 2014. In this short series we’ll look at three initiatives that hold great potential for lowering the cost of developing complex new biologic drugs:

Part 1: Mass-producing CAR-T therapies
Part 2: Using artificial intelligence (AI) to speed new drug development
Part 3: New vaccines for the COVID-19 disease are racing through development, thanks in part to some radical new technologies. We take a closer look.

Genetic and cellular-based biologic drug therapies can now treat medical conditions for which no other treatments are available.2,3 But leading-edge bioengineering isn’t cheap. Per-treatment prices are already over $1 million, and a still-newer gene therapy could cost up to $3 million.4, 5

The typical discussion around the high cost of biologic drugs tends to center on things like the slow pace of biosimilar competition, manipulating drug patents, and manufacturer rebate policies. [For example, see here.] These are all critical issues, but none of them get to the underlying cost of actually making the substances used in treatment.

So here is a more basic question: How can we produce new drugs faster, and at lower cost? In other words, who is out there building a better mousetrap?

Part 1: Mass-produce CAR-T therapies for lower per-dose price
CAR-T is short for chimeric antigen receptor T-cell therapy. They were among the first cell and gene therapies to reach market.3

CAR-T takes naturally occurring infection-fighting cells (‘T-cells’) and re-engineers them to be more effective. The altered T-cells are put back in the body, where they can attack cancer cells.6 [Click here for an in-depth look at CAR-T.]

Treatments like CAR-T are a good example of why pharmaceutical manufacturers routinely cite the high cost of drug development as a major reason for high drug prices. They are pushing the boundaries of what is possible in chemistry, biology and engineering.7

In addition to the high cost of discovery, biologics are also very expensive to manufacture, compared to traditional medicines of the past.1 A study published by the International Society for Cell and Gene Therapy estimates the cost to manufacture CAR-T using current methods at $95,780 per dose.3  (We’ll return to this figure below.)

From hand-made to off-the-shelf
One of the reasons why existing CAR-T treatments are so expensive is that they are completely personalized; using what is called autologous therapy. Basically, T-cells are taken from the patient they intend to treat.9 As the graphic below shows, the cells are treated in the lab, multiplied, and then re-introduced into that same patient:

Image - Responsive Rendition Support

CART-T

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The current CAR-T process yields small volumes, are labor-intensive, and time-consuming. It usually takes 3 to 4 weeks to manufacture one treatment dose.9 In short, the industry is still searching for a scalable, robust and cost-effective manufacturing model.3

This is where a new approach, called allogeneic (pronounced al-o-gen-AY-ik) may help.  Allogeneic or ‘off- the-shelf’ – CAR-T is different. Instead of starting with a sick patient, the new process uses a healthy donor, and the T-cells can be multiplied many times over for use in many patients.9

Off-the-shelf CAR-T uses large batch manufacturing technologies that are currently available and well-established in the antibody industry. This helps create economies of scale.3 As this graphic illustrates, the new process results in many doses, available to a wide range of patients, on demand:

Image - Responsive Rendition Support

CART-T

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Beating the rejection problem

Using donor cells from other people (not the patient) gives off-the-shelf CAR-T its flexibility, but also could cause problems. One is that the donated cells could attack the recipient (called graft-versus-host disease). Or, the patient's own T-cells could reject the CAR-T product, which would limit the therapeutic impact.10 These problems are regarded as tricky, but solvable – not deal-breakers. Additional engineering work is underway.10

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Impact

CAR-T treatments are by no means the most expensive biologic drugs. The currently approved CAR-T drugs (Kymriah and Yescarta) are priced at $475,000 and $373,000 respectively.9

However, both Kymriah and Yescarta are now indicated for a type of non-Hodgkin lymphoma with approximately 24,000 potential patients in the U.S.8 Treating even a substantial fraction of all these people could easily run into the tens of billions of dollars.

With potential costs like these, every percentage point we can subtract from the price could mean huge savings. The new off-the-shelf CAR-T process could help by spreading the high initial manufacturing costs across a larger number of doses3,10

For example, one company (Allogene), sees the potential to treat 100 patients with each batch of allogeneic CAR-T cells.9 Recall the study above that estimated the per-dose cost with the current CAR-T manufacturing process: $95,780. In contrast, the production cost using the new process would be only $4,460 per dose – over 95% less.3

Purely for illustration, we can plug these figures into a back-of-the-envelope estimate. If we substitute the lower production cost for Kymriah, that $475,000 price now becomes $383,680 – a hefty 19% discount. ($475,000 - $95,780 + $4,460 = $383,680)

In addition, manufacturers are exploring automation to make their processes faster and more efficient. For example, they might process multiple patient samples in parallel, and use automated data capture to move each sample to the next process step.11

Growth market

Many more CAR-T cell therapies are on the way, which means we will need more efficient manufacturing techniques soon. One analyst counts close to 150 CAR T-cell therapies in nearly 200 clinical trials across the major world economies.12

CAR-T projects cover an array of therapeutic areas aimed toward significant U.S. patient populations.9 These include acute myeloid leukemia, (21,450 people diagnosed in 2019), and non-Hodgkin lymphoma (74,200 diagnosed last year).13, 14

No magic

Obviously, even with our theoretical 19% discount, a drug costing over $383,000 would still be extremely expensive. And, it’s unlikely that all of the lower production cost would automatically filter down to the consumer price tag. This simply emphasizes the point that there will be no one ‘silver bullet’ solution to high drug prices. It’s going to take a long list of other incremental improvements to help bring these prices under control.

For example, we desperately need increased competition in the form of biosimilars, but also better regulatory pathways for biosimilar interchangeability. We’ll also need new contracting strategies like pay-for-performance, and possibly other novel reimbursement strategies.

However the technology eventually plays out, OptumRx has a robust methodology in place to obtain the best possible prices from drug manufacturers. It begins with the OptumRx Pharmacy & Therapeutics (P&T) Committee, which is comprised of independent physicians and pharmacists.

After the P&T Committee has identified drugs that are clinically effective, and should be covered, OptumRx negotiates with those manufacturers to obtain discounts, and places the drug with the lowest overall net cost in a preferred position on the formulary. [Learn more about drug pricing here.]

Please look for our future installments on using artificial intelligence and other new technologies to help speed a COVID-19 vaccines and lower drug costs. As these technologies mature, we hope to see vastly more efficient ways to develop new drugs and bring them to market.

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References:

1. Forbes. Biologic Medicines: The Biggest Driver Of Rising Drug Prices. Published March 8, 2019. Accessed January 28, 2020.

2. U.S. Food and Drug Administration. Center for Biologics Evaluation and Research (CBER). What Are "Biologics" Questions and Answers. Content current as of February 6, 2018. Accessed February 6, 2020.

3. Cytotherapy. Chimeric antigen receptor T cell therapy manufacturing: modelling the effect of offshore production on aggregate cost of goods. Published January, 2019. Accessed January 27, 2020.

4. Novartis. AveXis receives FDA approval for Zolgensma®, the first and only gene therapy for pediatric patients with spinal muscular atrophy (SMA). Published May 24, 2019. Accessed January 16, 2020.

5. Axios. A new multimillion dollar drug. Published January 17, 2020. Accessed January 29, 2020.

6. National Cancer Institute. CAR-T Cells: Engineering Patients’ Immune Cells to Treat Their Cancers. Updated: Aug. 7, 2017. Accessed January 28, 2020.

7. Information Technology & Innovation Foundation. The Link Between Drug Prices and Research on the Next Generation of Cures. Published September 9, 2019. Accessed January 28, 2020.

8. PwC Health Research Institute. Beyond the hype: Gene therapies require advanced capabilities to succeed after approval. Published September, 2019. Accessed January 27, 2020.

9. BioSpace. The Next Frontier of CAR-T Therapies: Off-the-Shelf Therapies. Published: April 2, 2019. Accessed January 16, 2020.

10. Cancer Discovery. The Quest for Off-the-Shelf CAR T Cells. Published Online First May 10, 2018. Accessed January 27, 2020.

11. Genetic Engineering & Biotechnology News. Crafting a More Efficient CAR T-Cell Industry. Published May 1, 2019. Accessed January 28, 2020.

12. Decision Resources Group (DRG). CAR T-cell Therapy Pipeline and Forecast Snapshot. Accessed January 27, 2020.

13. Cancer.Net. Leukemia - Acute Myeloid - AML: Statistics. Approved January, 2019. Accessed January 28, 2020.

14. Cancer.Net. Lymphoma - Non-Hodgkin: Statistics. Approved August, 2019. Accessed January 28, 2020.

STATEMENT REGARDING FINANCIAL INFLUENCE:
This article is directed solely to its intended audience about important developments affecting the pharmacy benefits business. It is not intended to promote the use of any drug mentioned in the article and neither the author nor OptumRx has accepted any form of compensation for the preparation or distribution of this article.