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Once Disparaged, 'Me-Too' Drugs Crucial For Lower Costs Of Cholesterol, Hepatitis C And Cancer Drugs

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While the high cost of new drugs is worrisome, those responsible for drug benefit plans in the U.S. are especially concerned. When a cure for a hepatitis C drug, Sovaldi, was launched by Gilead at a cost of $84,000 for a 12-week cost of therapy, payers were outraged. Typical was last year’s comment by Ms. Karen Ignagni, the President of America’s Health Insurance Plans, the insurance industry’s trade association:

The company in this case is asking for a blank check which, if granted, will blow up employer benefit costs….and wreak havoc on the federal debt.

However, these concerns abated when a competitor to Sovaldi, AbbVie’s Viekira Pak, was approved and launched in the U.S. While AbbVie priced Viekira Pak at $83,319 per cost of therapy, insurance giants like Express Scripts and CVS Health Corp. now were in a position to negotiate pricing, resulting in steep discounts for exclusive listing of these drugs on their list of covered medicines. Neither Express Scripts, which crafted a deal with AbbVie, nor CVS, which dealt with Gilead, have made public the price negotiated with their respective partners as to the cost they are paying for these hepatitis C treatments, but it is believed that they are in the $60,000 per patient range, far lower than the original list price and in line with the price of $55,000 set in places like England and Germany.

The next battleground for high drug pricing is forming around the new LDL cholesterol lowering agents, the PCSK-9 inhibitors. The first of these new, powerful drugs, Praluent, was recently approved by the FDA and has been launched by co-marketers Sanofi and Regeneron at an annual cost of $14,600 per patient. Given that generic statins like atorvastatin, the active ingredient in Pfizer ’s Lipitor, are priced at a fraction of Praluent’s cost, the insurers are again worried. In fact, CVS is not yet adding Praluent to its list of covered drugs. It is waiting for the second PCSK-9 inhibitor, Amgen ’s Repatha, to be approved and this is likely to occur later this month. The chief medical officer at CVS, Dr. Troyen Brennen, explained CVS's position in the following way:

It’s smart to wait and see what the competitor medication looks like in terms of what the FDA label is.

To be frank, based on data seen to date, the biological profile of Repatha is going to be similar to Praluent. CVS is waiting for a competitor to arrive before beginning negotiations on which PCSK-9 inhibitor will be covered. Payers will be in even a better position in a year or so should Pfizer’s PCSK-9 inhibitor, now in late stage development, emerge. For payers, a third PCSK-9 inhibitor will be the charm.

Clearly, having multiple options is a great way to get lower drug prices. However, this has not always been appreciated. In fact, the second or third entries in a drug class have been derided as “me-too” drugs and people used such examples to depict a lack of innovation in the biopharmaceutical industry. The irony is that companies don’t set out to discover a “me-too” drug. Rather, there is generally intense competition among research groups as new drug targets emerge. In the case of PCSK-9 inhibitors, Pfizer may well have been the first to begin discovery research in this area, but others moved ahead. Furthermore, it is likely that others failed and dropped out – such is the nature of drug discovery. But having such a “race” for a PCSK-9 inhibitor, proved to be a boon as these breakthrough drugs have arrived relatively quickly.

But having multiple options in a therapeutic class is important therapeutically as well. While clinical trials show the safety and efficacy of a new drug, the thought that one drug will work identically in males and females, young and old, and people of diverse ethnic backgrounds is unreasonable. The aforementioned statins are a great example. There are those who cannot tolerate one statin but who get great results with another. Thus, having choices is important for doctors and patients in treating diseases.

When Sanofi launched its cancer drug, Zaltrap, at a price of $11,000/month, oncologists at Memorial Sloan Kettering cancer center balked. They believed that Zaltrap was no better than Avastin, and the latter was half the cost. Furthermore, they decided that they would not prescribe Zaltrap because of its costs and made this position public in an op-ed to the New York Times.  Sanofi quickly responded by dropping the price of Zaltrap in half. Such is the power of having choices and shows the value of “me-too” drugs to the healthcare system.

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