A groundbreaking gene therapy for cancer could cost the Canadian health-care system more than $400-million over three years, according to a new report that recommends the drug be publicly covered, provided the manufacturer drops the price.

Part of the reason for the positive recommendation is that the new medication, tisagenlecleucel, is a promising last resort for patients who would otherwise die from aggressive childhood leukemia or the most common type of non-Hodgkin lymphoma.

The new report, released Tuesday, comes from an expert panel convened by the Canadian Agency for Drugs and Technologies in Health (CADTH), the independent organization that advises the provincial, territorial and federal governments on whether they should cover new drugs.

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Read more: Uncertain, costly, but filled with hope: Gene therapy about to go mainstream in Canada

The agency’s review of tisagenlecleucel – sold under the brand name Kymriah – has been hotly anticipated because it is CADTH’s first report on a gene therapy, an up-and-coming class of treatments that carries big hopes and big price tags.

“[The expert panel] came to the conclusion that this is a very promising therapy,” said Harindra Wijeysundera, CADTH’s vice-president of medical devices and clinical interventions. “It represents a therapy for a population that is at the end of therapeutic options. Given that, [the panel] tried to balance that condition with the fact that the evidence base does have uncertainty with it – the evidence base is still new.”

The first gene therapy approved by Health Canada, Kymriah is a one-time treatment custom-made for each patient from his or her own T-cells – a subtype of white blood cells which are the front-line soldiers of the immune system.

Known as CAR-T therapy, the treatment involves genetically altering a patient’s T-cells with chimeric antigen receptors (CARs) that can find and destroy cancer cells that normal T-cells wouldn’t be able to detect.

Each time a CAR-T cell battles a cancer cell, the CAR-T cells multiply, making Kymriah a living drug.

Kymriah is approved to treat two kinds of cancer: acute lymphoblastic leukemia (ALL) in children and young adults, and diffuse large B-cell lymphoma, the most common type of non-Hodgkin lymphoma, in adults.

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In both instances, the drug is for patients whose cancer has relapsed or failed to respond to conventional treatments.

The expert panel estimated that covering Kymriah for children and young adults with ALL would cost governments across Canada $25.6-million in the first three years. The national budget impact for adults with lymphoma would be much higher at $387.4-million over three years, largely because the disease is more common than childhood ALL.

Stuart Peacock, a health-sciences professor who holds a chair in cancer survivorship at Simon Fraser University, called the projected budget impact of Kymriah in adults with lymphoma “substantial.” (He also sits on the board of CADTH, but was not involved in the Kymriah report.)

“That raises real questions. If we spend [nearly] $400-million on this type of treatment, what’s the opportunity cost?” he asked. “What are all the other types of treatments that we could have funded if we had used that $400-million for a different type of treatment with a different type of patient?”

The expert panel concluded it would likely be cost-effective to publicly fund Kymriah for ALL, in part because early evidence shows the drug works better for that group. The panel reached a different conclusion for lymphoma patients, saying Kymriah would likely not be cost-effective in that population.

However, the panel recommended Kymriah be covered for both groups regardless, as long as drug-maker Novartis agrees to reduce the drug’s Canadian price – which was blacked out in CADTH’s report.

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In the United States, Kymriah’s list price for a one-time treatment is US$475,000 for ALL patients and US$373,000 for lymphoma patients.

Novartis is currently in pricing talks with Cancer Care Ontario, which is leading the Kymriah negotiations on behalf of the provinces. Until a deal is reached, CAR-T therapy is not available in Canada, except through clinical trials.

Also on Tuesday, the Quebec government announced that it would cover Kymriah for certain patients with ALL between the ages of 3 and 25 once a deal is reached with the manufacturer. Quebec said it would consider paying for the drug for lymphoma patients as well, provided Novartis meets the conditions that Quebec’s equivalent of CADTH laid out in a parallel review, also published Tuesday.

“The price for Kymriah is currently being finalized,” a Novartis spokeswoman said by e-mail. “We are exploring innovative ways we can support health system stakeholders including innovative pricing models, early access mechanisms, risk-sharing with payers and patient and caregiver support.”

Michael Sherar, the chief executive officer of Cancer Care Ontario, acknowledged that Kymriah is expensive compared to traditional cancer treatments.

That is why, he said, “our negotiation with the manufacturer, our planning for how this is going to be delivered … is very important.”