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 The drugs' success for patients is the result of big bets in cancer
therapy made by Bristol-Myers Squibb Co, Merck & Co Inc and Roche
Holding AG, among others in big pharma. The industry's pipeline of
cancer drugs expanded by 63 percent between 2005 and 2015, according
to the QuintilesIMS Institute, and a good number are reaching the
market.
The global market for cancer immunotherapies alone is expected to
grow more than fourfold globally to $75.8 billion by 2022 from $16.9
billion in 2015, according to research firm GlobalData. For a
graphic, click http://tmsnrt.rs/2omboI1
"For cancer drugs in general ... it is hard for us to drive down
cost," said Steve Miller, chief medical officer at Express Scripts
Holding Co, the nation's largest manager of drug benefit plans for
employers and insurers. "You don't want to be in the position of
being told to use the second best cancer drug for your child."
Lawmakers on both sides of the aisle, as well as President Donald
Trump, have been grappling with how to restrain rising prescription
drug costs. They have talked about solutions ranging from more price
negotiation to faster approval of new drugs, often invoking
increased competition between drugmakers.
"Competition is key to lowering drug prices," Trump told
pharmaceutical executives at an Oval Office meeting in January.
But that is not happening with new drugs called checkpoint
inhibitors that work by releasing a molecular brake, allowing the
immune system to recognize and attack cancer cells the same way it
fights infections caused by bacteria or viruses.
For cancers like melanoma, the treatments can mean long-term
survival for around 20 percent of patients.
Bristol's Yervoy, first approved in 2011, targets a protein known as
CTLA-4. Other immunotherapies, including Bristol's Opdivo, Keytruda
from Merck, Roche's Tecentriq, and Pfizer Inc's Bavencio, involve a
different protein called PD-1.
Other targets are being explored. Some new data will be presented
this week in Washington at the American Association for Cancer
Research's annual meeting.
Current checkpoint inhibitors each have a list price near $150,000 a
year. A combination of Yervoy and Opdivo, approved by the Food and
Drug Administration for advanced or inoperable melanoma, has a cost
of $256,000 a year for patients who respond to the treatment.
Similar immunotherapies are in development at companies like
AstraZeneca Plc. Merck, which declined to comment on pricing plans,
expects an FDA decision by May 10 on its combination of Keytruda and
chemotherapy as an initial treatment for the most common form of
lung cancer - by far the biggest market for cancer drugs.
Pfizer said Bavencio, cleared by the FDA earlier this month to treat
Merkel cell carcinoma, a rare type of skin cancer, has a price
"comparable to other checkpoint inhibitors approved for different
indications."
The pharmaceutical industry holds that discussion of prescription
drug prices has to take into account the major investment required
for innovation and discovery of new lifesaving drugs.
"UNRESTRAINED PRICING POWER"
Scientific progress, and pricing power, are driving pharmaceutical
companies to emphasize oncology research.
[to top of second column] |
"Most of the strategy on the part of pharmaceutical companies
assumes unrestrained pricing power," said Dr. Peter Bach, director
of Memorial Sloan Kettering's Center for Health Policy Outcomes in
New York. "We don't see evidence that companies are pursuing
cost-effective strategies."
Health insurers have had success in demanding price concessions in
some drug categories - like diabetes, where several companies sell
similar products and insurers are able to negotiate price discounts
or rebates in exchange for coverage.
According to IMS, that tactic capped the overall rise in spending on
diabetes medicines at 8 percent in 2015, compared with an increase
of 30 percent in billed invoices. All of the invoice price growth
for insulin was offset by price cuts, the institute said.
But discounting is much less common for newer, innovative cancer
drugs, mostly given by injection and approved for defined patient
populations.
Net price growth for branded oncology drugs averaged 4.8 percent in
2015, versus 6.4 percent for invoices, according to IMS.
Express Scripts' Miller and others said makers of new cancer
medications enjoy pricing power due to coverage requirements,
insurance plan structure and a lack of head-to-head comparison
studies.
"Cancer drugs don't compete on price," said Dr. Aaron Kesselheim, a
researcher at Harvard Medical School and author of several studies
of drug pricing. "Drug companies have market exclusivity and we
require payers to cover cancer drugs - Medicare has six protected
classes, including cancer."
Medicare, the federal government's healthcare plan for seniors and
the disabled, covers most prescription drugs under its "Part D"
pharmacy benefits. The plans are required to cover all drugs in six
classes: cancer, HIV, antidepressants, antispychotics, seizure
disorders like epilepsy, and immune system suppressants for people
undergoing organ transplantation.
Trump met recently with Representatives Elijah Cummings and Peter
Welch, both Democrats, to discuss draft legislation allowing the
government to negotiate Medicare drug prices - but the bill
preserves the six protected classes.
In addition, drugs given by injection, including many cancer
therapies, are covered under Medicare's main medical benefit.
Bristol disappointed investors when it did not pursue accelerated
FDA review of the Opdivo/Yervoy combination for newly-diagnosed lung
cancer - putting Merck ahead in the lucrative lung cancer market.
"All of the immunotherapies have similar price points," said Miller
at Express Scripts. "When you stack therapies, it means more expense
for patients and (health) plan sponsors."
(Editing by Edward Tobin)
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