‘Cardiology On A Collision Course With Specialty Pharmaceutical Pricing Models’

The recent approval of two new expensive cholesterol drugs “sets the practice of cardiology on a collision course with specialty pharmaceutical pricing models that were previously reserved for drugs that benefited relatively limited patient populations,” according to the authors of a perspective published in the New England Journal of Medicine.

Until now cardiologists and other doctors treating the most common diseases have been able to observe from a distance, and with awe, the astonishing prices for some new hepatitis C, cancer, and cystic fibrosis drugs. These drugs demonstrate that “the health care market seems to have limited tools for restraining the pricing power of suppliers.”

Now, with the approval of alirocumab (Praluent, from Regeneron and Sanofi) and evolocumab (Repatha, from Amgen), this issue confronts the broader medical community.  These drugs “raise questions about whether (primary or secondary) prevention of cardiovascular disease remains an insurable benefit,” the authors write. They wonder whether this phenomenon might spark “the rise of high-deductible health plans with deductibles designed to effectively exclude these products.” They ask, “Would paying the first $10,000 annually in drug costs be worth it to you if you are a patient for whom these products are indicated?”

In their paper the Duke University authors– Kevin Schulman, Suresh Balu, and Shelby Reed– write that because of the low absolute rate (2-3%) of events in the populations studied with the drugs, even if the predicted relative reduction of 50% is borne out, “the average cost offsets that stem from lower rates of cardiovascular events are likely to be nominal.” In fact, they calculate, even a 100% reduction in relative risk of an absolute risk level of 3% would only result in a small $600 price offset, they calculated.

The authors estimate that insurance premiums could increase by $124 for every individual in the insurance pool if the drugs were given to only 5% of the estimated 27% of the US adult population with high LDL levels. Further, they note, taxpayers will also have to pay more to support the increased burden on the Medicare Part D program.

But, they warn, too much pressure on drug prices might “drive a fundamental restricting of the industry and further increase the financial challenges of bringing scientific innovations to the market.”

Earlier this week Express Scripts, the nation’s largest pharmacy benefit manager, said that it had added both the new cholesterol drugs to its national preferred formulary. The drugs have a wholesale acquisition cost of more than $14,000 a year. Express Scripts obtained substantial discounts on the drugs, but it did not state the precise amount it will pay for each drug.

Express Scripts also said that it does not expect the overall market for the drugs to  exceed $10 billion in 2016. The actual expense may be somewhat less.

Responding to an email question Schulman said that their own $10 billion estimate  “would probably be the second highest launch ever for a drug class” after the hepatitis C drug  Solvaldi. However, Schulman noted that the long term cost may run far higher. “Since these agents are for chronic use, $10 billion in sales would be recurring every year (or $100 billion over 10 years). Solvaldi is generally only used once.”