US Capitol Capsule: Buckle Up, Drug Makers: Bumpy Pricing Roads Ahead

It's unclear now whether legislation introduced late last week that seeks to rein in drug prices will gain enough support to actually go anywhere on Capitol Hill.

But with the Senate sponsor of the bill, Sen. Bernie Sanders (I-VT), who has made Americans' concerns over rising drug prices a key issue of his political platform, gaining steam in the 2016 Democratic presidential run for the White House – surging past Hillary Clinton in the early Iowa and New Hampshire polls – and payers increasingly clamping down on the costs of medicines, biopharmaceutical manufacturers better buckle their seat belts.

It's going to be a rough ride ahead.

Payers and politicians have been backed up in recent weeks by high profile policy and economic experts – most recently by Princeton economics professor Uwe Reinhardt and just this past week by former White House policy adviser Ezekiel Emanuel, who is now the vice provost and a professor at the University of Pennsylvania – in their criticism about the high prices Americans are paying for their prescription medicines.

Even former NBC News anchor Tom Brokaw, speaking to a room full of biopharmaceutical executives at the Sept. 9 Pharmaceutical Research and Manufacturers of America's Research & Hope Awards dinner, took a swipe at cancer drug manufacturers for the high prices they charge patients for their medicines – although the former newsman pulled his punches.

But it's not just been the costs of cancer drugs payers, lawmakers and others have been making noise about.

The hepatitis C virus (HCV) medicines, like Gilead Sciences' Sovaldi (sofosbuvir) and Harvoni (ledipasvir-sofosbuvir) and AbbVie's Viekira Pak (ombitasvir/paritaprevir/ritonavir/dasabuvir), have been the big targets over the past year for payers and Capitol Hill. And more recently, it's been the newly approved proprotein convertase subtilisin kexin type 9 (PCSK9) inhibitors – Sanofi's and Regeneron Pharmaceuticals Praluent (alirocumab) and Amgen's Repatha (evolocumab).

The latter drugs were the subject of a new analysis by the nonprofit Institute for Clinical and Economic Review (ICER) – the content of which will be debated on Oct. 27 at Harvard Medical School during the next meeting of the New England Comparative Effectiveness Public Advisory Council.

The ICER analysts concluded that even though the PCSK9 inhibitors reduced low density lipoprotein cholesterol (LDL-C) by about 55-60% among patients who are already on statins or who cannot take them, the medicines' benefits are worth much less than the $14,600 Sanofi and Regeneron set as the wholesale acquisition cost (WAC) for Praluent and the $14,100 WAC Amgen set for Repatha.

When all subpopulations were combined, ICER said the care value price range was $3,615-$4,811 – representing about a 67% reduction from the PCSK9 drugs' list price.

But that price range was higher than the maximum price of $2,177 that could be charged before exceeding the potential budget impact threshold, ICER said.

Therefore, the group said its analysts estimated that the value-based price benchmark for each of the new PCSK9s should be $2,177 – more than an 80% discount from the listed WACs.

But Tijana Ignjatovic, an analyst with Datamonitor, an affiliate of Scrip, noted the type of cost-effectiveness modeling the ICER used of calculating the incremental cost-effectiveness ratios, or cost per quality adjusted life year gained, for the new PCSK9 inhibitors is not routinely used by U.S. payers in their decision-making.

So, she said, it won't have a direct influence on coverage, "especially since there is no such thing as an agreed cost-effectiveness threshold."

Nonetheless, Ignjatovic pointed out "It is, of course, putting pressure on marketing companies and they will have to discount when they contract with payers or engage in outcome-based reimbursement schemes and the payers will be looking closely at what patient populations should be eligible for coverage."

Amgen already has said it's working with payers and other purchasers to provide "innovative pricing programs," linking the net price of Repatha to the expected LDL-C reductions and anticipated appropriate patient use.

Express Scripts CEO Steve Miller, however, said his company plans to "leverage" the competition between the PCSK9 inhibitors "to achieve the greatest possible discounts for our clients and patients."

The PCSK9s and HCV drugs also are likely to take center stage at a Sept. 18 Capitol Hill lunchtime briefing hosted by the Alliance for Health Reform focused on recent prescription drug price trends.

But Sanders and Rep. Elijah Cummings (D-MD), who also introduced a companion bill in the House on Sept. 10, are taking aim at the prices of multiple types of drugs – a fight they started after launching an investigation last year about medicines whose prices suddenly soared.

Under the Sanders-Cummings legislation, known as the Prescription Drug Affordability Act of 2015, the Medicare Part D program would be permitted to negotiate for better prices; Americans, pharmacists and wholesalers would be allowed to import medicines into the US from licensed Canadian pharmacies; the minimum rebate on therapies would be restored for low-income Medicare beneficiaries; generic manufacturers would be required to pay an additional rebate to Medicaid if their prices rise faster than inflation; and the Medicare Part D "donut hole" would be closed three years sooner than planned under current law.

If enacted, Sanders and Cummings said their legislation also would prohibit reverse-payment patent settlements – often called pay-for-delay deals – between branded and generic firms, terminate the remaining market exclusivity period for any product for which its manufacturer was found guilty of violating US criminal or civil laws or that settles with the government on such matters and would require pharmaceutical companies to publicly report information that affects drug pricing, including the total costs incurred for research and development and clinical trials and the portion of development expenses offset by tax credits or paid by federal grants.

In addition, drug companies would be required to submit to the U.S. government the prices, profits and sales information for the products they sell overseas, the lawmakers said during a Sept. 10 Capitol Hill press conference.

In an op-ed published in the New York Times last week, U-Penn's Emanuel said allowing the Medicare Part D program to negotiate with manufacturers would not solve the problem of stratospheric drug prices for several reasons, including the fact the program would have little leverage since it cannot maintain an approved drug list and exclude overly expensive medicines from coverage.

And, he said, "Having the federal government negotiate lower prices for Medicare would most likely drive up prices on the private side as drug companies tried to recoup their 'lost' profits."

But in the op-ed, Emanuel also blasted the incentives and pricing arrangements the U.S. government offers to drug makers.

For instance, he said the added marketing exclusivity and tax credits provided under the Orphan Drug Act of 1983 encourages drug makers to focus on medicines that benefit thousands with rare diseases instead of millions with serious common diseases, like stroke and antibiotic-resistant infections.

But Emanuel actually called Gilead's $1,000-per pill price for Sovaldi "worth it" because he said it provides a cure for HCV and has been "shown to be cost-effective."

Nonetheless, he said the U.S. should consider pricing policies like those used in Australia, in which a single purchaser is used, with prices fixed at a certain rate, or by Switzerland, whose government includes only those therapies that are effective and cost-effective on its approved drug list.

"Everyone, including drug company executives, believes that high prices cannot continue," Emanuel contended.

"Indeed, that is one reason that companies are trying to maximize profits while they can," he charged.

In other Washington news:

FDA's Evolving: But Into What?

Today's FDA is a considerably different organization than it was 15 or 20 years ago, said the agency's acting commissioner, Stephen Ostroff, who insisted regulators are using new tools and pathways and have worked hard to keep pace with the science behind industry's most innovative breakthroughs in medical product research and development.

Of Kangaroos And Bass: IPR Patent Challenges Going Awry

As Scottish poet Robert Burns and American author John Steinbeck might have warned Kyle Bass, chief investment officer at Hayman Capital Management – the hedge fund manager the biopharmaceutical industry loves to hate – even the best-laid schemes can go awry. And that seems to be the case for Bass, who so far has failed to persuade the US Patent & Trademark Office's Patent Trial and Appeal Board – who the hedge fund manager called a "kangaroo court" – to institute any trials on the inter partes review petitions he has filed through his self-created Coalition for Affordable Drugs.

Will Amgen, Sandoz Tango Across Old Ground?

Amgen and Novartis unit Sandoz are expected to soon know whether the full U.S. Court of Appeals for the Federal Circuit will rehear their arguments involving the latter firm's biosimilar Zarxio (filgrastim-sndz), which is referenced on the former company's human granulocyte colony-stimulating factor Neupogen (filgrastim). Both drug makers last week submitted responses to each other's petitions for the en banc review of the July 21 decision by a three-judge panel in Amgen v. Sandoz, in which the companies each gained a win, but also experienced a loss.

Amgen Seeks FDA OK for Monthly Single Shot Repatha

Amgen is seeking the FDA's blessing to market a single-dose subcutaneous shot of its newly approved cholesterol-lowering drug Repatha (evolocumab) for patients who need the monthly dosage.

Abilify Ingestible-Sensor Pill Seeks To Revolutionize Adherence

Otsuka and Proteus are seeking to revolutionize the adherence of medicines with their drug-device product, which embeds an ingestible sensor into the atypical antipsychotic Abilify (aripiprazole). And now, the FDA has agreed to review the firms' application for the product, which is the first-ever digital medicine of its kind to undergo an evaluation by the agency.

Merck's Keytruda: A Remarkable Science-To-Success Story

With the probability of a drug making it from discovery to FDA approval extremely low – with some estimates putting the success rate at only one in every 5,000 – the story of how Merck's checkpoint inhibitor Keytruda (pembrolizumab) came to the marketplace is nothing short of remarkable.

Pacira Suit Seeks To Loosen FDA's Grip On Promotion

Seeking to piggyback on what appears to be the FDA's reluctance to appeal a decision in a free-speech lawsuit brought by Amarin involving off-label promotion of its fish-oil pill Vascepa (icosapent ethyl), Pacira Pharmaceuticals has filed its own challenge against the agency – hoping to further loosen regulators' grip on what drug makers can discuss about their medicines with doctors and in promotional materials.

Study: Greater Rx Drug Use Leads To Lower Medicaid Costs

Greater use of prescription drugs by Medicaid beneficiaries with non-communicable diseases, like diabetes, hypertension and asthma, can result in reduced spending for the program in overall medical costs, such as hospitalizations, economic researchers reported on Sept. 8 in the Washington public policy journal Health Affairs.

AstraZeneca Scores 'Voucher' On Wellstat's Xuriden Approval

The FDA's approval on Sept. 4 of Wellstat Therapeutics' hereditary orotic aciduria (HOA) treatment Xuriden (uridine triacetate) means AstraZeneca has gained a coveted rare pediatric disease priority review voucher – a deal the two firms made last year, long before the so-called golden tickets were being sold for hundreds of millions of dollars.

This and past US Capitol Capsule columns are available at http://www.scripintelligence.com/capitolcapsule/