January 14, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Shares of biopharma giants Amgen and Regeneron are down in trading Wednesday, a day after massive benefits provider Express Scripts Inc. said it plans to pressure makers of PCSK9 cholesterol drugs over their pricing, which it deems to be too high to be sustainable.
Express Scripts Chief Executive George Paz told the audience of a panel at the J.P. Morgan Healthcare conference in San Francisco that he was looking closely at new cholesterol drugs that target protein PCSK9, which competitors Regeneron and Amgen are already rolling out.
“They are pretty astonishing, but they are also very expensive,” Paz said, adding Express Scripts would likely wait to make a decision so that they didn’t get caught in the trap of “me too” drugs, or paying for things that are fashionable but not cost-effective.
Express Scripts also said it will take on the pricing of cancer drugs, after the company’s earlier decision to go with an exclusive and cheaper provider of hepatitis C drugs, AbbVie , sent it into a bidding war with close competitor Gilead Sciences .
“If it weren’t for our moves, we wouldn’t be realizing the savings that will come to all of our competitors,” Paz said. But cholesterol remains the priority, he said, which had Wall Street selling off shares of some of the largest PCSK9 makers like Amgen and Regeneron.
“That’s the short term, and cancer is the long term,” Paz said.
Paz said what worked for bringing down prices for liver disease might also work to rein in the cost of cancer and cholesterol drugs.
“The big opportunity out there is really in cancer,” Paz said. “If we can get out in front of that, that is a huge opportunity.”
Paz made the statements at the J.P. Morgan Healthcare Conference which began Monday in San Francisco and is the oldest and largest conference of its type. It includes 300 of the largest biotech, healthcare and biopharma companies presenting their top-line data and estimates to 4,000 eager bankers, analysts, institutional investors, hedge funds and journalists.
Paz also took aim at companies that charge sky-high rates for drugs that are essentially a cure, such as Gilead’s hepatitis drugs Harvoni and Sovaldi. Express Scripts has pointed out that many public health programs like Medicaid and state prison systems currently foot the bill for the $94,500 price tag of Sovaldi, which has a cure rate of around 90 percent.
“Everyone’s got to make money, but how much?” said Paz.
Express Scripts started the price war between dueling hepatitis C drugs in October when it said it would change its standard formula to a new, cheaper AbbVie instead of choosing Gilead Science’s pricey Harvoni or Sovaldi treatments.
“The cost of [Sovaldi] is unsustainable for many of our plans,” Steve Miller, chief medical officer of Express Scripts, told analysts late Wednesday. Sovaldi and Harvoni sometimes have multiple stages of treatment, and cost $94,500 and $84,000 per course—or around $1,000 per pill.
