Sanofi, Regeneron and Express Scripts Deal: Sign of Things to Come in Drug Pricing?

Drug Pricing

Paris-based Sanofi and Tarrytown, New York-based Regeneron Pharmaceuticals made a deal with pharmacy benefits manager Express Scripts for their Praluent (alirocumab) for hard-to-treat high cholesterol.

Praluent is a new type of cholesterol medication, a PCSK9 inhibitor. Its direct competitor in the marketplace is Amgen’s Repatha. Neither drug has gained the traction in the marketplace that the companies hoped for, largely because of their high prices. Both drugs have a price tag of about $14,000 pear year before discounts. Statins, however, the most commonly prescribed drugs for high cholesterol, run about $50 per month. But the PCSK9 inhibitors do seem to be effective in patients who don’t respond to statins. As a result, the companies indicated that about 70 percent of the prescriptions written are rejected by payers.

In the deal, Express Scripts is making Praluent is exclusive PCSK9 inhibitor on its national formulary, essentially locking Amgen’s Repatha out of that market segment. As part of the agreement, Regeneron and Sanofi will reduce Praluent’s price, probably somewhere in the $4,500 to $8,000 per year rate, which is the range the Institute for Clinical and Economic Review (ICER) suggests. Express Scripts’ chief medical officer, Steve Miller, told Reuters that Praluent’s price would be at the “low end” of the ICER range, as well as include double-digit rebates.

The list price of the drug won’t decrease. The decrease will come as part of a rebate.

“This paradigm-shifting agreement is designed to break the gridlock so that Praluent is finally able to reach patients most in need,” said Len Schleifer, Regeneron’s chief executive officer, in a statement. Cardiologists “have experienced unprecedented challenges in securing access for Praluent for patients who were clearly appropriate, but were denied coverage.”

Starting July 1, physicians can submit a single form stating that a patient with heart disease meets the criteria for PCSK9 therapy, which is basically that they are unable to lower LDL cholesterol with statins.

“This … addresses head-on the frustrations caused by complex pre-authorization requirements that hamstring physicians and put an important medicine out of reach from patients,” Michelle Carnahan, head of Sanofi’s North American cardiovascular business, said in a statement.

Originally, the companies expected to the drugs to be blockbusters, but in 2017, Praluent brought in $195 million in revenue, and Repatha brought in $319 million. CNBC notes, “Analysts expected that longer-term studies proving that the drugs help reduce the risk of heart attack and stroke would help spur sales; Amgen’s results came last year, while Regeneron and Sanofi’s were reported in March.”

Amgen’s study involved 27,564 patients, and showed that Repatha led to more cuts in major cardiovascular events, including heart attacks, strokes and coronary revascularizations. But the results weren’t as positive as doctors and Amgen were hoping. Stock analysts and cardiologists were hoping it would cut the risk of heart attacks, strokes, deaths from heart disease, and hospitalizations due to chest pain, as well as stent and heart bypass procedures by as much as 30 percent, but it was only 15 percent. It had no effect at all on whether patients died.

Sanofi and Regeneron’s study, reported in mid-March, looked at 18,924 patients, and showed a risk reduction of 24 percent of major adverse cardiac events, but the cardiovascular death rate also dropped from 4.2 percent to 2.9 percent. And for all-cause deaths, the drop was 5.7 percent to 4.1 percent, or a 29 percent drop in risk.

Miller told CNBC, “The reason to exclude the Amgen product is: while both of them work in a very similar manner, the data is really good for Praluent.”

In some ways, this appears to be a case of what is being dubbed value-based pay for the pharmacy industry. In 2017, David Cordani, chief executive officer of health insurer CIGNA, told analysts in the company’s first-quarter earnings call, “We have created seven such arrangements in the past two years that base reimbursement on the efficacy of the drug, not just the consumption or volume of the drug.”

One of those deals, in 2016, was with Amgen for Repatha and with Regeneron and Sanofi for Praluent.

In the fall of 2016, Aetna inked a value-based deal with Merck for Januvia and Janumet for type 2 diabetes. And in 2017, Merck announced a partnership with UnitedHealth Group’s Optum unit to “develop and simulate the performance of contractual reimbursement models in which payment for prescription drugs is aligned more closely with patient health outcomes.”

It’s not as if pharmaceutical companies want to lower the prices of their drugs, but clearly—especially if pushed by healthcare and pharmacy benefits managers—they’re willing to trade pricing for market access. We can likely expect more deals like this.

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