Medical Innovation

Sanofi Blinks First: Zaltrap Price Cut Proves HTA Has Reached The US

Posted on Monday, November 12, 2012

Sanofi’s decision last week to cut the price of its colon cancer drug Zaltrap by up to 50% showed that the US market is no longer immune to European-style drug price pressure. Never mind that the move was partly a result of a messed-up calculation on Sanofi’s part: this was a defining moment in the evolution of America’s troubled health care system. That the price of a drug was cut at all, and voluntarily (albeit under pressure), is notable enough: prices usually go up, especially in the US. But the size of the cut (deeper than almost all of the discounts squeezed out of pharma by European cost-watchdogs’ rule-dominated systems), and the fact that we’re talking about a drug for cancer (until recently among the most price-protected TAs) that’s, technically at least, an NME, is even more remarkable. Zaltrap’s high price of $9-11,000 per month, its questionable efficacy (extending overall survival by just 1.5 months) and safety concerns such as a boxed warnings over fatal GI bleeding were what prompted leading cancer specialists at Memorial Sloan-Kettering Cancer Center to boycott the treatment. The MSKCC scientists were behaving just like an EU-style health technology assessment agency: they were in effect importing the spirit, if not the institution, of a NICE-like hurdle to the US. (There’s no way, incidentally, that Zaltrap...

Learn More

Discounting For Access: The QALY Math Is Spreading

Posted on Tuesday, November 6, 2012

Last week, England & Wales’ cost-watchdog  NICE approved reimbursement for two drugs for advanced melanoma, Roche’s Zelboraf and Bristol’s Yervoy. As is so often the case at NICE, both drugs had initially been rejected, and both in the end came through with confidential discounts to the list-price. But this isn’t just a story about discounting, nor is it just about the UK. Everyone knows that winning reimbursement in England & Wales boils down to math –  math that culminates in a controversial cost-per-quality-adjusted life year (QALY) figure that has to be below a threshold of £30,000 usually or £50,000 for ‘end-of-life’ treatments such as Yervoy and Zelboraf. What’s less well known is that the oft-criticized QALY is gaining traction among cost-pressured US payers too (as well as in other markets such as France). According to a 2012 oncology survey by Reimbursement Intelligence, almost half (45%) of US payers, (mostly large ones) view assessment of QALY as a viable model for the US health care system. Given this could soon be relevant in the world’s largest market, too, what were the most important variables playing into the reimbursement arithmetic for Yervoy and Zelboraf? Several UK headlines suggested that for both drugs, it was discounting that made the numbers work. That’s true of Yervoy, but not...

Learn More

Actelion’s Opsumit Will Test Whether Outcomes Data Can Replace Head-to-Head

Posted on Friday, November 2, 2012

Actelion pulled out all the stops in designing the Phase III trial of its pulmonary arterial hypertension drug Opsumit (macitentan), filed at FDA on Oct 22.  And no wonder: the biotech’s future depends on it, as its own top-selling PAH treatment Tracleer faces patent expiry in 2015. But Opsumit’s regulatory and reimbursement path should also interest any other drug developer seeking to test what kinds of data payers require in order to prioritize a next-in-class therapy that’s likely to be somewhat –but not necessarily hugely — better and safer than existing, soon-to-be-much-cheaper treatments. Opsumit treats a rare, but not ultra-niche condition. It has orphan status, but is a follow-on drug (albeit a highly optimized one) in an increasingly competitive, and genericizing, segment. Phase III data strongly suggest this dual endothelin receptor antagonist has dosing, safety and efficacy advantages over existing PAH treatments. Can Longer-Term Outcomes Data Replace Head-to-Head? But Actelion didn’t pit Opsumit directly against Tracleer or Gilead’s Letairis, the one-two of PAH, for familiar reasons – not least because to adequately power the research, it would have required conducting a large (e.g 5000-patient) and expensive trial.  Instead, it designed a trial that was much longer, and with more outcomes-focused endpoints, than any other PAH study. The placebo-controlled SERAPHIN trial,...

Learn More

The Value Debate: Can Personalized Drugs Support Personalized Pricing?

Posted on Wednesday, October 10, 2012

“Personalized health care requires a new reimbursement model,” declared Roche’s VP Global Pricing & Market Access Jens Grueger in the elegant London county hall debating chamber on Monday, at the Office of Health Economics (OHE)-sponsored gathering of payers, pharma and economists. The venue was appropriate.  Debate centered around whether the move towards more personalized medicine could reasonably support more personalized pricing.  Roche, with plenty of targeted medicines at stake, thinks, perhaps wishfully, that more differential, ‘value-based’ pricing is one answer to the soaring cost of innovation. Not all payers are so enthusiastic. Grueger’s calling for more differential pricing not just for the same drug in different indications (as already happens in rare cases today) but also within indications. Such “segment-specific” pricing might, for example, see a breast cancer drug priced differently when used in the late-stage setting versus in the adjuvant setting. As Grueger argued, the price would be “based on the value that the medicine brings” in particular settings for particular patients. Most commonly in HTA-driven countries today, a drug is granted an ‘average’ price based on its value across a range of settings. But, emphasized Grueger, that one-price-fits-all- indications strategy doesn’t suit the kinds of medicines that Roche and others are developing (drugs that, just like on-market Avastin, have potential across...

Learn More

Risk-Shares Pop Up Again As Payers, Pharma Circle New Payment Models

Posted on Wednesday, October 3, 2012

Say you’re GSK, and a head-to-head trial pitting your drug against the market leader showed non-inferiority. Say, too, that even though you assembled some trial evidence that patients preferred your drug vs. the leader, this hadn’t convinced everyone. So, with 70% of prescriptions still favoring your competitor, what to do? Blunt rebating is one option – but hardly commercially attractive. So how about taking the risk of testing your tolerability claim in the real world? That won’t eliminate the need to rebate (that’s a permanent fixture with me-too drugs) But it may limit it – and, potentially, allow a reduction in the rebate going forward. Here’s how such a contract might work. In exchange for covering drug A, the payer gets discount X. If the drug meets a certain tolerability threshold (defined, of course, relative to the competitor) that discount remains. If it doesn’t, the discount deepens. In the future, if that tolerability data can be turned into reduced overall cost (side-effects, treatment switching costs) the discount may shrink. Impracticable and unlikely to pass muster with payers, you say. Generally speaking, you’d be right. Exhibit number one supporting your conclusion: the paucity of risk-sharing in the US to date. Exhibit number 2: payers’ publicly disclosed reasons for this scarcity,...

Learn More

The Prostate Cancer Battle: Can Xtandi’s Convenience Support a Premium Over Zytiga?

Posted on Friday, September 28, 2012

It may be Orion/Endo’s ODM-201, a potentially first-in-class anti-androgen to treat metastatic castration-resistant prostate cancer, that’s generating the most buzz ahead of this weekend’s European Society of Medical Oncology (ESMO) meeting in Vienna. But payers and physicians have a much more pressing concern: how to objectively evaluate two competing anti-androgens, Janssen’s Zytiga and Medivation/Astellas’s newly approved Xtandi, already on the market to treat advanced prostate cancer in the post-chemotherapy setting. A review of peer-reviewed published data suggests both drugs provide essentially the same overall survival benefit relative to placebo, and have similar quality-of-life data. Thus, the battle boils down to this: whether Xtandi’s superior convenience and its freedom from required co-administration with corticosteroids can support its 28% price premium. That could prove an uphill battle. Medivation and Astellas don’t yet have data linking its benefits to either improved outcomes or cost-savings, data points that are increasingly important in the post-reform era of accountable care. Indeed, there are signs that payers may finally be ready to say no to certain oncology drugs, albeit initially by targeting the low-hanging fruit: next generation, chemical improvements of existing molecules (think Abraxane) rather than first-in-class treatments. In a world where clinical pathways that rank medicines based on efficacy, toxicity, and cost are used to...

Learn More

Zeke Emanuel: Re-Incentivizing Pharma & Device Companies to Solve Technology’s Data Problem

Posted on Friday, September 28, 2012

Zeke Emanuel would like to set the record straight. He’s not against new medical technology. Indeed, the UPenn med school and Wharton professor calls the profusion of industry-generated new technologies “a great thing”. But his support is necessarily tempered — a wariness born from his days as a health policy advisor in the Clinton and Obama administrations. Emanuel’s willingness to critique newer, costlier innovations that deliver results no better than older, cheaper technologies has made him a lightning rod for critics who argue he’s in favor of rationing (as well as death panels, which he was famously accused of inventing as part of his role in fashioning the Affordable Care Act). He also happens (with another dozen and a half similarly influential panelists) to be a speaker at the Real Endpoints Symposium on Nov 1-2 in Philadelphia. The unfortunate truth, says Emanuel, is that advances in healthcare technology have generally not delivered the kind of productivity benefits Moore’s law describes in computer processing. But that won’t always be so. Future technologies, he believes, will not only increase the quality of healthcare, particularly in areas which haven’t seen much progress, but also “lower costs and do it more efficiently.”  That double goal is “what technology is supposed to do…we just...

Learn More

Patient-Based Pricing: An Answer To The Soaring Cost of Innovation?

Posted on Friday, September 21, 2012

Roche’s investor day on Sept. 5 provided heartening news for breast cancer patients. Executives outlined an array of increasingly targeted therapeutic permutations to combat the tumor, building on its leadership with Herceptin. But payers will have come away worried. The slew of new drugs, combinations and conjugates points to rapidly-multiplying per-patient costs, as (likely) premium-priced individual treatments are teamed up. Roche seems to be aware of the tension. Even as it promoted more effective versions of existing blockbusters like Herceptin, it also discussed a new model for how such drugs ought to be paid for: patient-based pricing. Marketing chief David Loew talked about moving “from pack-based to patient-based pricing”, borrowing from a concept that is gaining traction scientifically –personalized medicine—and applying it to the commercial marketplace. “Different prices will be applied…depending on indication, setting, and combination,” he told investors. How this works without causing administrative chaos is unclear — but the alternative, sum-of-the-parts pricing, is equally nightmarish. Those holding their breath for the era of cheaper Herceptin (whose patents are due to expire in 2014 in Europe and five years later in the US will likely have to wait far longer. That’s because Roche has redefined the boundaries on  its Her-2 breast cancer franchise, conveniently expanding Herceptin’s commercial life cycle with...

Learn More

Europe’s New Season HTA: German System Beds Down; NICE Grip Tightens

Posted on Wednesday, September 5, 2012

European HTA officers return to their offices after the summer break with more job-confidence than many other health care stakeholders.  Rather like lawyers, their role will become more important as budget pressures mount amid continued European economic turmoil. Indeed, the Germans are patting themselves on the back for their new early-benefit assessment system: G-BA Chairman Josef Hecken on Sept. 3 in Berlin declared the system “transparent, legally secure and predictable” with decisions based on “clear, evidence-based criteria.”  Sponsors of drugs including Zytiga, Jevtana (prostate cancer) and Gilenya (MS), which will soon emerge from the pricing process, will be wishing it was more predictable still. Pharma associations criticise the choice of (often cheap) comparators. And there have been other wrinkles: around whether negotiated prices would be published (they will); around VAT (expected to be payable on the full, not discounted price); and around pharmacy software struggling to cope with discount data. But even after just two medicines have been priced (Brilique and Esbriet),  the 20-month old system looks here to stay. There’s no suggestion that UK cost-watchdog NICE is going away, either. But there were mixed messages over the summer. On August 20, the agency appeared to have got its claws clipped –again — , with news that its appeals panel...

Learn More

The Healthcare Round-Up: August 3 -19

Posted on Monday, August 20, 2012

The Olympics (and shark week) are over, the dog days have officially arrived, and here at the West Coast branch of Real Endpoints, it’s back to work as the little people head back to school. (Already!) Given Mitt Romney’s choice of Paul Ryan as his running mate, it’s a sure bet healthcare (especially Medicaid and Medicare) will remain a subject of debate in the run-up to the presidential election. So will the subject of “big medicine” and standardization. Atul Gawande’s New Yorker piece on the topic continues to generate discussion in the blogo- and twitter-spheres as well as #longread recommendations. And it’s no wonder. If you’re like me you’ve probably taken for granted (or refused to believe) that a chain like the Cheesecake Factory can provide high quality food and service for a reasonable price. What Gawande does so well is show you the non-obvious steps that CF uses to manage the process and highlight where—and how—such standardization would make a difference in healthcare delivery. Even better are the specific examples he cites, whether it’s Steward Hospital’s tele-ICU service or Brigham and Women’s Hospital’s attempt to standardize joint-replacement surgery. In the latter case, it’s interesting to see how the creation of a dedicated process –for instance, one that requires...

Learn More