ICER Weekly View: March 29, 2019

From the desk of David Whitrap

Hello everyone. Yesterday brought Major League Baseball’s opening day and all the blue-sky optimism that comes with it. And then it brought the first loss of the year for some of us (me), along with all the dark-cloud pessimism that comes with that. The life lesson? It’s a long season.

Anyway, let’s take a look this morning at:

  • ICER in the News: Launching an assessment of old/new/biosimilar treatments for rheumatoid arthritis, our preliminary assessments of Mayzent and Spravato, the trend of “price anchoring,” the early returns on outcomes-based contracts, and how ICER’s assessments are filling information gaps for newly approved drugs.
  • Pharmaceutical News: How states like Louisiana and Maryland are tackling drug pricing, what’s next for Alzheimer’s research, the settling of lawsuit(s) over Xarelto, and an examination of how much a drug’s price actually connects to pharmaceutical R&D.

ICER in the News

This week, ICER announced we will conduct an update on our earlier assessment of the therapies for rheumatoid arthritis. As part of this class review, we’ll be looking at new evidence for upadacitinib (AbbVie), which is currently under FDA review, and potentially one or more of the available biosimilars. We’re accepting Public Input through April 8.

ICER to Assess Upadacitinib and Other Treatments for Rheumatoid Arthritis

Reuters, Bloomberg, and MS News Today reported on the approval of Novartis’ new MS drug, Mayzent (siponimod), with all three outlets noting that our preliminary Draft Evidence Report suggests that the treatment’s $88,000 annual price would surpass traditional thresholds for cost-effectiveness. Of course, this is just our preliminary analysis, and our revised Evidence Report on May 2 will reflect any adjusted assumptions we make based on the FDA label and the stakeholder feedback we’re currently receiving.

Novartis MS drug wins FDA’s blessing amid scrutiny of $88,000…

ZURICH (Reuters) – Novartis AG has won U.S. Food and Drug Administration approval for multiple sclerosis drug Mayzent as the Swiss company targets patients whose disease advances from intermittent attacks to a gradually worsening condition. Novartis has priced the treatment at $88,000 annually, head of pharmaceuticals Paul Hudson told Reuters, a level exceeding some other MS drugs and one that may draw scrutiny from payers.

Novartis Makes New MS Drug Cheaper Than Its Older Option (Bloomberg)

MS Patient Groups React Favorably to Mayzent But Question Price Tag

National organizations that represent patients with multiple sclerosis (MS) welcome the U.S. Food and Drug Administration’s March 26 approval of Novartis’ oral therapy Mayzent ( siponimod) – but they complain that, at $88,500 per year, the treatment is overpriced. The Multiple Sclerosis Society of America (MSSA) is clearly upbeat about the new medication.

Meanwhile, STAT News reported on our Draft Evidence Report on Spravato (esketamine) for treatment-resistant depression. The preliminary analysis will be updated in our revised Evidence Report on May 9.

Esketamine may solve depression need, but not be cost-effective – STAT

T he first major depression treatment to hit the U.S. market in decades may be a new option for patients who fail to respond to existing therapies, but a preliminary analysis shows the price of the medicine would have to be shaved by 25 percent in order to be cost effective.

The Pink Sheet analyzes ICER’s past assessments of gene and cell therapies, and why certain pharmaceutical companies float an artificially high price before the treatment is approved, which can make a lower launch price feel more reasonable to the public.

Price ‘Anchoring’? Zolgensma And The Art Of Managing Gene Therapy Sticker Shock

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Modern Healthcare reported on the current uptake of outcomes-based contracts for pharmaceuticals. While these agreements can be attractive options in certain instances, the article notes that progress has been “slow and uncertain” because not all drugs have outcomes that can be measured easily through claims data, patients may switch plans before long-term results can be assessed, and the administrative costs can offset any potential savings. Most significantly, however, “value-based agreements” do not always reflect “value-based pricing,” and these outcomes-based contracts can’t be a substitute for simply aligning a drug’s underlying price with its ability to improve patients’ lives.

As a cure for high drug prices, outcomes-based deals aren’t delivering yet

Still, some drug companies are aggressively seeking innovative, results-based purchasing deals, knowing they’re likely to face resistance from payers to the high price tags of their products if they don’t accept risk. And payers are open to their pitches.

While at the Academy of Managed Care Pharmacy annual conference this week, ICER’s President Steve Pearson spoke on camera with AJMC about how ICER assessments help fill information gaps around newly approved drugs.

Dr Steven Pearson: ICER Can Provide More Information When a Drug is Approved With Limited Data (AJMC)

Pharmaceutical News

Writing in The Hill, Trish Riley of the National Academy of State Health Policy (NASHP) discusses the various options state legislatures are currently considering to better manage their rising drug spend.

States are tackling America’s drug pricing problem

Congressional hearings into America’s drug pricing problem reveal the challenges policymakers face as they confront a powerful industry’s pricing practices, but states have been on these front lines for years. Dozens have passed laws to lower the pharmaceutical price trajectory, and their work can inform the current debate.

Louisiana and Gilead Sciences just agreed to a novel Netflix-styled contract – a series of lump sum subscription payments for unlimited utilization – to provide hepatitis C treatments for all eligible beneficiaries within the state’s Medicaid program and prison system.

Gilead and Louisiana agree to a ‘Netflix’ model for hepatitis C drugs – STAT

A fter months of planning, the Louisiana Department of Health has chosen a new Gilead Sciences ( GILD) subsidiary to supply a hepatitis C medicine under a so-called Netflix payment model. The deal revolves around subscription-based payments.

Meanwhile in Maryland, the House of Delegates approved a bill that would establish a Prescription Drug Affordability Board to review high-cost drugs and potentially limit prices paid by state and local government employees, and in the future expand these lower prices to all Marylanders. The bill is now being considered by the state’s Senate.

Maryland House of Delegates OKs bill to create a prescription drug price board for government employees

The Maryland House of Delegates approved Wednesday a bill that would create a state board to set limits on how much state and local governments pay for medicines for their employees and retirees. The bill was approved largely along party lines on a 98-40 vote, moving the measure to the state Senate for consideration.

In the wake of last week’s disappointing news from a clinical trial for Alzheimer’s disease, Joe Walker and Pete Loftus at the Wall Street Journal provide an overview of alternative pharmaceutical approaches to tackle the disease.

Where Alzheimer’s Research Is Pushing Ahead

Pharmaceutical companies’ recent drug-development failures are giving greater currency to efforts to explore inflammation, tau and possible infectious causes.

After five years of litigation, Bayer and Johnson & Johnson agreed to pay $775 million to settle thousands of lawsuits over claims that the companies failed to warn about side effects associated with the blood thinner Xarelto.

Bayer and Johnson & Johnson Settle Lawsuits Over Xarelto, a Blood Thinner, for $775 Million

The settlement resolves about 25,000 lawsuits, which claimed the companies failed to warn about deadly bleeding episodes caused by the drug. Johnson & Johnson and Bayer said on Monday that they had agreed to pay $775 million to settle about 25,000 lawsuits involving the blood thinner Xarelto, which they jointly sell.

And finally, Zeke Emanuel writes in The Atlantic about the relationship between drug pricing and pharmaceutical R&D. (At ICER, we’re pleased to report that life science companies participating in our reviews are increasingly defending the prices of their treatments by pointing to the measurable benefits patients are receiving, rather than vague notions of future R&D investment.)

Big Pharma’s Go-To Defense of Soaring Drug Prices Doesn’t Add Up

Just how expensive do prescription drugs need to be to fund innovative research? How is it that pharmaceutical companies can charge patients $100,000, $200,000, or even $500,000 a year for drugs-many of which are not even curative? Abiraterone, for instance, is a drug used to treat metastatic prostate cancer.


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