A New Cholesterol-Lowering Drug at What Price?

By Kate Greenwood
[Cross-posted at Health Reform Watch]

This summer, the Food and Drug Administration (FDA) is expected to approve the first entries in a new class of drugs that lower patients’ low-density lipoprotein (LDL) cholesterol levels by more than half, even those patients who are already taking other cholesterol-lowering medication. The new drugs are biologics—monoclonal antibodies—that target, and inhibit, the gene proprotein convertase subtilisin–kexin type 9 (PCSK9). In mid-March, the New England Journal of Medicine published the results of important studies (here and here) of the two PCSK9 inhibitors that the FDA is expected to pass judgment on this summer. These studies—of Repatha (evolocumab), which is sponsored by Amgen, and Praluent (alirocumab), which is sponsored by Sanofi and Regeneron—suggest, but do not definitively establish, that PCSK9 inhibitors will reduce not just LDL levels, but also a patient’s chance of a major cardiovascular “event”, like a heart attack or stroke.

The race to approval between Amgen and Sanofi and Regeneron has been dramatic. (Pfizer also has a monoclonal antibody PCSK9 inhibitor in development, but it has lagged behind the two leaders.) As John Carroll reported at FierceBiotech last summer, Sanofi and Regeneron jumped ahead of Amgen when they purchased a priority review voucher from BioMarin for $67.5 million dollars. BioMarin was awarded the priority review voucher, which shrinks the time the FDA takes to approve a drug from ten months to six, because it developed and sought approval for a treatment for a rare pediatric disease. Per the Wall Street Journal, “[t]he voucher was the first to be issued under the pediatric incentive program, and also the first to change hands.”

As I mentioned earlier this week here, speculation has begun about what the price of the new PCSK9 inhibitors will be. Weighing in favor of a high price, the evidence of their efficacy is impressive and growing. The drugs hold particular promise for patients who cannot tolerate statin medications, or whose cholesterol cannot be controlled by statins alone. And, they are biologics, which are more expensive to produce than small-molecule drugs. On the other hand, PCSK9 inhibitors are not without safety concerns. In addition, patients will have to inject themselves with the new drugs, which some will find undesirable (although some might prefer a once- or twice-a-month injection to a daily pill regimen). Finally, the new drugs will have to compete with generic statins.

Payers are very concerned. At FiercePharma in January, Tracy Staton explained that while PCSK9 inhibitors “aren’t likely to be approved for first-line use . . . patients with hard-to-control cholesterol are going to be moving from these cheap, commoditized meds to biologics that could cost $10,000 a year—for a lifetime.” If you “[m]ultiply that by the many millions of people who might be eligible,” it makes paying for the new generation of Hepatitis C medications “look easy.” Per Staton, George Paz, the Chief Executive Officer of pharmacy benefit manager Express Scripts told the JP Morgan Healthcare Conference that “[p]laying hardball on PCSK9 meds ‘is the short-term, and cancer is the long-term[.]’”

While the market for cholesterol drugs has obvious dissimilarities from the market for anticancer drugs, there may be ways in which they—unfortunately—converge. In their article Pricing in the Market for Anticancer Drugs, which is forthcoming in the Journal of Economic Perspectives, David Howard, Peter Bach, Ernst Berndt, and Rena Conti describe a ratcheting effect, as the price of each new market entrant is set at or slightly above the price of previous entrants. Howard and his colleagues found “that anticancer drugs’ average benefit- and inflation-adjusted launch prices increased by 10 percent annually, or an average of $8,500 per year, from 1995 to 2013.” In other words, they write

“in 1995 patients and their insurers paid $54,100 for a year of life. A decade later, 2005, they paid $139,100 for the same benefit. By 2013, they paid $207,000.”

Howard and his colleagues quote a Wall Street analyst who concluded that the “‘market structure effectively provides no mechanism for price control in oncology other than companies’ goodwill and tolerance for adverse publicity.’”

It will aid payers in their negotiations over the price PCSK9 inhibitors that, unlike cancer, high levels of LDL cholesterol are not, in the short term, a life-and-death matter. That there will be more than one PCSK9 inhibitor will also help, as it has with the new treatments for Hepatitis C. But the conventional wisdom seems to be that the new cholesterol-fighters will be both very lucrative for their manufacturers and very expensive for payers. For a time, anyway. Earlier this year, Damian Garde at FierceBiotech reported that Pfizer is developing both a small-molecule PCSK9 inhibitor, which could be taken in pill form, and a vaccine, which would require a single annual injection. As Garde puts it, “if Pfizer can pull off such a feat, its third-place finish in the blockbuster race in PCSK9 antibodies could eventually be lost to history.”