The $475,000 price tag on Novartis AG’s latest breakthrough cancertherapy came under fire from one of the biggest managers ofdrug costs in the U.S., underscoring thechallenges the Swiss drugmaker will face in promoting the potentialblockbuster.

The cost of the leukemia treatment, called Kymriah, is“dramatically higher” than other such complex treatments, and thehealth-care system isn’t ready to pay for it, Steve Miller, chiefmedical officer at Express Scripts Holding Co., said Thursdayin a blog post on his company’s website. Gene therapies likeNovartis’s are targeted at a small number of patients and typicallyused just once, meaning that drug companies have limited chances torecoup their investment.

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“Therein lies the challenge,” Miller wrote. “We need a newpayment model.”

Kymriah is the first drug approved from a new class oftreatments called CAR-Ts that have been heralded as a promisingapproach to treating and potentially curing cancers as well asgenetic conditions such as blindness. Paying for CAR-Ts and similartherapies, some of which cost as much as $1.4 million, will requirenew collaborative approaches among payers, drugmakers andpolicymakers, the executive wrote.

Cost Hurdle

Novartis has said it will attempt to address the pricinghurdle with a new type of agreement: for patients whose careis covered by U.S. government programs, the company will getpaid only if patients show signs that the treatment is workingwithin a month of getting it.

Other value-based payment approaches for Kymriah and CAR-Ttherapies are under discussion, Novartis said Friday in anemailed statement. Studies show its drug would still becost-effective at $600,000 to $750,000 for treating leukemia, whilethe only other potentially curative option for young patients is astem-cell transplant costing $500,000 to $800,000 for the firstyear.

“We are committed to doing everything we can to help childrenand young adults who can benefit from Kymriah have access to thetherapy,” the company said. “We are working with payers to ensurethey fully understand the value of Kymriah and provide coverage forpatients.”

Shares of the Swiss company rose 0.5 percent to 83.35 Swissfrancs as of 12:18 p.m. in Zurich.

Express Scripts, a pharmacy benefit manager in the U.S.,negotiates prices with drugmakers to lower costs for its clients,which include employers and insurers.

The approval of Novartis’s CAR-T therapy last monthcame just two days after Gilead Sciences Inc. announcedan $11.9 billion deal to buy Kite Pharma Inc., which isdeveloping a rival CAR-T therapy scheduled for an FDA ruling byNov. 29.

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