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Novartis will only sell its new prostate cancer drug privately if health systems continue to balk at its high price, according to its finance chief, underlying the challenge of expanding access to innovative but expensive new treatments.
Pluvicto is one of a new generation of so-called “radiopharmaceutical” therapies that can help cancer patients live longer, but are expensive to produce due to complex supply chains. The US list price of the drug is about $42,500 a dose, with a treatment cycle of up to six doses, but it is not offered by some European health systems.
Harry Kirsch, Novartis’s chief financial officer, told the Financial Times that the complexity of the product meant the Swiss drugmaker could not significantly cut its price.
“We have to stick firm on the floor price: this [drug] is not simple to manufacture and supply,” he said. “If the respective country and health system can’t [afford] the price that needs to be achieved by us, we provide it on the private market . . . where there is good uptake.”
“Our ambition is of course to get it reimbursed so this product can be available for every patient eligible, but we also have to protect the value of our investment,” he added.
Sales of the drug rose by 45 per cent in the six months to the end of June to $655mn, Novartis reported on Thursday, with $522mn in the US. However, sales in the second quarter — up 44 per cent — were lower than analysts’ forecasts. Kirsch said Novartis needed to “educate” medical professionals about the benefits of the treatment in order to increase referrals.
Shares were down by 3.6 per cent in early afternoon trading on Thursday.
Pluvicto is a highly targeted form of radiotherapy for advanced prostate cancer that contains an antibody that seeks out and binds to cancer cells, with a radioactive component that kills them. Clinical trials show that patients on the drug live longer without deteriorating, when compared with current treatments.
Pluvicto uses lutetium-177, a radioactive isotope that has a short half-life, meaning that it must be used within days of being manufactured at Novartis’s sites in the US, Italy and Spain. As a result, the drug has faced supply constraints, and was placed on a US shortage list last year. Kirsch said the company now had “unconstrained” supply, having opened a new facility in Indiana.
The drug has been approved by the UK’s Medicines and Healthcare products Regulatory Agency and by the European Commission. But not all European countries are providing the treatment.
Germany said this month that the drug would be reimbursed by statutory health insurance funds at a price of more than €150,000 per year. But the UK’s healthcare spending watchdog recommended against providing the drug on the NHS in November. It said it was uncertain of its cost effectiveness compared with current treatments.
Kirsch said the company has led recent developments in precision radiotherapy. However, it faces competition from other pharmaceutical groups that have recently entered the sector.
AstraZeneca recently acquired radiotherapy company Fusion Pharmaceuticals for $2.4bn, while Bristol Myers Squibb and Eli Lilly have also bought biotech companies in the sector in the past year.
Novartis raised its annual profit guidance on Thursday after sales of its heart failure, psoriasis and cancer drugs helped it beat expectations in the first half of the year. Sales rose by 11 per cent at constant exchange rates to $12.5bn, and net income was up 45 per cent to $3.2bn, both ahead of expectations.
The company now expects core operating income of mid-to-high teens, up from about 10 to 13 per cent previously.
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