Big Pharma and Insurers Play Nice

Print 03 June 2015
Arlene Weintraub / Bloomberg

Both sides aim to reduce the sticker shock of new specialized drugs

In the summer of 2014, biotechnology company Amgen seemed to be on the verge of a breakthrough with an injectable anti-cholesterol drug. Just four years into its development, the drug, Repatha, was showing an unprecedented ability to lower LDL, the so-called bad cholesterol.

As positive results came out of Amgen’s labs, the price of another drug shocked the health insurance industry: Sovaldi, a hepatitis C cure that its manufacturer, Gilead Sciences, initially priced at $84,000 for a 12-week course. Express Scripts, the biggest pharmacy benefit manager (PBM) in the country, balked at the cost. It eventually refused to include Sovaldi in its 2015 formulary when a similar drug from rival AbbVie that would cost Express Scripts less came on the market.

That taught Amgen and other drugmakers a lesson. Avoiding hostility with insurers and PBMs is now a paramount industry goal. “Every company is saying, ‘We don’t want to replicate what happened with Sovaldi. So let’s sit down and talk,’ ” says Steve Miller, chief medical officer of Express Scripts. “It’s very clear that it has changed the dynamic in the marketplace.”

Amgen has been pursuing an aggressive plan to win over PBMs and insurers with an extensive trial program designed to prove Repatha will offer both short-term and long-term benefits to heart health. As part of the plan, Amgen started meeting with executives at Express Scripts early this year to discuss pricing for Repatha and the appropriate patient population for the drug, says Miller. If successful, the strategy could serve as a model for how to develop and sell new, specialized, expensive treatments. The injections will carry a substantial price tag, from $7,000 to $12,000 per patient per year, some insurers have estimated.

Repatha, which is on track for an FDA review this summer, inhibits a protein called PCSK9 that interferes with the liver’s ability to clear LDL from the body. It’ll be a challenge to convince the FDA as well as physicians, health insurers, and PBMs that PCSK9-lowering injections are necessary when statins such as Lipitor are off-patent, and generic versions cost just pennies a pill. Statins have proven so effective at preventing heart problems that 25 percent of adults in the U.S. over 45 take them, up from 2 percent two decades ago, according to the National Center for Health Statistics. “As cardiologists, we have to look at costs,” says Richard Chazal, president-elect of the American College of Cardiology. “We know statins significantly lower death rates from cardiovascular disease. We need to be able to see that these expensive drugs provide an additional benefit.”

Amgen estimates Repatha could help at least 25 million people in the U.S., Europe, and Japan who can’t get below 100 milligrams/deciliter, the recommended maximum LDL level, with statins alone. In a study released last fall that included patients with an inherited form of high cholesterol called familial hypercholesterolemia (FH), Repatha cut LDL levels by as much as 66 percent when taken with a statin for 12 weeks. A study published in March showed a Repatha-and-statins combo slashed LDL up to 76 percent in Japanese patients with high cholesterol and a risk of cardiovascular issues.

Repatha has been tested in 22 trials involving 35,000 patients. Anticipating pushback from insurers, Amgen built five long-term trials into its plan to show that extended use of Repatha, often in combination with statins, boosts survival rates. That data will be crucial for winning coverage of the drug beyond just a small population of patients who have genetic abnormalities that cause their high cholesterol or who can’t tolerate statins.

“We recognized early on it was going to be very important to demonstrate we could show cardiovascular benefit in terms of reducing the risk of death, heart attacks, and strokes,” says Scott Wasserman, vice president for global development for Repatha. Amgen also is tracking potential cognitive side effects such as memory loss—which some patients in earlier studies reported—as well as taking ultrasound images of some participants’ coronary arteries to show the drug therapy reduces hardening of the arteries. The five trials are set to report data in 2017. “The data is going to have to support who gets treated,” Miller says.

There’s another challenge: rivals. By last summer, Amgen was on track to be the first company to deliver an injectable anti-cholesterol drug and gain FDA approval. But last July, competitors Sanofi and Regeneron Pharmaceuticals, working together on a similar drug, used a little-known maneuver to jump ahead in the FDA approvals waiting line. They paid $67 million for another company’s place in the review calendar, putting their drug, Praluent, in line for approval in July 2015, one month earlier than Repatha. Sanofi and Regeneron also have been speaking to Express Scripts about pricing strategies, Miller says.

Sanofi and Regeneron, maneuvering to go head to head with Amgen in the PCSK9 market, have created a website, CholesterolCounts.com, for people to learn about LDL and to take a poll about their cardiovascular health.

Express Scripts has prepared a calculator for employers, insurers, and other clients to forecast their costs for PCSK9 inhibitors based on several potential price points and the number of patients they cover who have high cholesterol. However, benefits manager CVS Caremark took aim at PCSK9 inhibitors in a February blog post for the journal Health Affairs. Even if Repatha and rival drugs were prescribed only to patients with FH, it estimated, it would cost the health-care industry $16 billion a year. If the patient population expands beyond that, which is likely, the cost could skyrocket to $150 billion. CVS declined to comment for this article. Express Scripts said in late May that it will negotiate deals with drugmakers to set pricing on cancer medications based on their efficacy.

The FDA is set to rule on Sanofi and Regeneron’s drug by the end of July and on Repatha by the end of August. An advisory committee consisting of independent cardiologists and other experts for the agency will meet on June 9 and 10 to discuss the safety and efficacy of the drugs and to vote on whether they believe they should be approved. The FDA doesn’t have to follow an advisory panel’s recommendations, but it usually does.

Express Script’s Miller anticipates a favorable FDA ruling on both drugs. This time, he says, he doubts he’ll be shocked by the price tags. “This has been a much more collaborative approach than what we experienced with the hepatitis C drugs.”

The bottom line: After an $84,000 treatment was rejected by payers, drugmakers are negotiating price before approval.

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