Gene therapy ‘cures’ force new payment models

Solving the scientific challenges around gene therapy took decades. Figuring out how to pay for these new medicines will, hopefully, be quicker. As gene- and cell-therapies begin to trickle onto the market, with pipelines expanding behind, payers and manufacturers are frantically trying to work out how to fund these often one-time treatments, several of which purport to offer patients something close to a cure.

Smaller companies like Spark Therapeutics have engaged in outcomes-based contracts or installment-payment options with individual insurers; Spark’s Luxturna was approved by FDA for an inherited eye disease in late 2017. It costs $425,000 – per eye.

Big Pharma are involved in the debate, too, as their portfolios also shift toward high-value gene- and cell-based therapies. Novartis’ Kymriah, a $475,000 cancer therapy that involves modifying both genes and cells, has starred in several pharma-payer discussions in the 18 months following its US approval. Despite a no-cure, no-pay deal for children covered by the government’s Medicaid system, uptake of the drug has been limited.

Novartis’ CEO Vas Narasimhan has renewed interest in addressing the pricing issue, however, since paying $8.7 billion for gene-therapy company AveXis in April 2018. The deal came with a recently-filed candidate for spinal muscular atrophy, and two further clinical-stage candidates. (Novartis also has ex-US rights to Luxturna.)

Narasimhan is reportedly looking beyond health insurers to re-insurance companies, like Munich Re or Swiss Re. These groups underwrite conventional insurers, for instance in the case of catastrophic natural disasters. Why not have them, similarly, underwrite the outlier costs of patients in need of these specialized therapies, which, though pricey, can also save up to several million dollars in healthcare costs?

It is not an entirely new idea: several US states have created state-funded reinsurance ‘pools’ to help local insurers cope with the most expensive medical claims, and slow the rise in premiums for families and individuals. The World Bank teamed up with reinsurers in 2017 to cover against future Ebola pandemics, according to the Financial Times. This last parallel is imperfect: infectious disease outbreaks in developing countries present particular population-level health risks that are not relevant in the case of rare genetic disorders. But the re-insurance idea has legs. The costs of multiple specialist treatments could be pooled, for example, including across payers. Europe already offers a few examples of international payer cooperation to fund high-cost treatments for rare diseases.

The difficulty will be in agreeing the details – just as it has been for today’s growing handful of outcomes-based reimbursement deals. At what point, and for whom, does the re-insurance cover kick in? How will payers (and patients) absorb re-insurance premiums as these, necessarily, grow with the number of high-priced, one-time, potentially curative treatments that come to market? Will such a system force already high prices up further still?

The science behind these new therapies is extraordinary. As further gene- and cell-based medicines reach or approach the market in 2019 and beyond, society now requires similarly extraordinary efforts to solve the funding challenge – and fast.

As Keytruda expands, payers recoil

Checkpoint inhibitors like Merck’s Keytruda (pembrolizumab) and Bristol Myers Squibb’s Opdivo (nivolumab) are extending the lives of many cancer patients. Yet their success across a growing range of cancers is forcing payers to negotiate harder bargains, including reimbursement caps.

 

Keytruda’s December 2018 approval in Europe as an adjuvant treatment for late-stage melanoma patients who have undergone surgery is just the latest in a string of approvals for the drug across multiple cancer types and settings. Keytruda is used across cancers of the skin, lung, blood, head and neck, liver, intestine and cervix, among others. Based on its quarterly sales trajectory, it will soon be an $8 billion blockbuster.

 

At an average cost of about $13,000 per month, Keytruda, like others in its class, is much pricier than chemotherapy. Much of the data supporting checkpoint inhibitors are strong – the KEYNOTE-054 trial backing Keytruda’s recent EU melanoma approval, which enrolled over 1000 patients, showed a 44% reduction in the risk of disease recurrence or death compared to placebo.

 

It’s hard to argue with that. (These patients’ current option, post-surgery, is to ‘watch and wait’ to see if the disease returns.) UK watchdog the National Institute of Health & Care Excellence (NICE) agreed to make the drug available via the Cancer Drugs Fund.

 

Yet this is a ‘managed access’ scheme – a temporary agreement, while further data are collected on the drug’s longer term benefits, particularly overall survival. CDF will fund the drug until the end of 2021, after which NICE will review its guidance.

 

The US FDA will issue its decision on Keytruda in this melanoma setting by February 2019. Checkpoint inhibitor approvals will continue – and may accelerate – beyond that. The drugs work by interfering with a mechanism used by cancer cells to hide from our immune system. This unlocks our body’s own defences against the abnormal cells. It is a fairly general approach, which works across several tumor types, especially those, like melanomas, where there is already a low-level immune response.

 

Checkpoint inhibitors are already a crowded class. Alongside category-leader Keytruda and Opdivo, the first to gain approval back in December 2014, sit Bristol’s Yervoy, Roche’s Tecentriq, Merck KGAa’s Bavencio, AstraZeneca’s Imfinzi and Sanofi/Regeneron’s Libtayo – plus plenty more in late-stage development.

 

Competition, in theory, gives payers more negotiating power. But checkpoint inhibitors are not all the same. Some inhibit different receptors within the complex immune-system control pathways. This makes them more appropriate in some settings than in others. Dosing and administration frequency can vary, along with toxicity. So some checkpoint inhibitors may carve a niche where there are relatively few alternatives.

 

And some may work better in combination with other treatments – not just older, chemotherapy drugs, but newer targeted therapies, too, with high price tags of their own.

For example, Keytruda is in a Phase III trial alongside Amgen’s oncolytic virus drug, Imlygic. Early data suggest that the duo may significantly enhance the strength of response. Adding an oncolytic virus may also expand checkpoint inhibitors’ reach beyond tumors that already trigger a low-level immune response, to include those that are immunologically “cold” – which accounts for the majority. That could unleash even faster growth in the class.

 

These dynamics will force a range of new pricing and payment structures, beyond the relatively straightforward price-volume arrangements, and overall spending caps, already in place in some European markets. The same drug used within a combination may have to be priced lower than when used alone, for example. Pricing may need to be linked to specific indications. Payers may insist on even stronger survival data.

 

Indication- and combination-specific pricing approaches are compelling in theory, and have long been investigated. Implementing them has proved very tricky, though. Checkpoint inhibitors’ runaway growth may be what helps overcome those practical barriers.

Rare and Innovative? Not Enough for European Payers

There are no longer any free tickets to access European or US drug reimbursement, even for highly novel drugs that address rare diseases. UK cost watchdog the National Institute of Health & Care Excellence (NICE) and the US Institute for Clinical and Economic Review (ICER) have both turned down two newly-approved, innovative orphan drugs as too expensive.

Alnylam Pharmaceuticals’ Onpattro (patisiran) and Ionis/Akcea’s Tegsedi (inotersen) treat a very rare disease called hereditary transthyretin-mediated amyloidosis (ATTR), for which no other therapies exist. Both reduce disability and enhance quality of life. But Tegsedi costs $388,000 per patient per year in the UK, and Onpattro costs $167,000 – and there’s little evidence as yet that their benefits endure over the longer-term. So NICE declared in late 2018 that neither drug would be an effective use of resources. ICER, faced with $450,000 annual list prices for both treatments, reached a similar conclusion.

 

NICE’s rejection is preliminary – a review will happen in February 2019 — and ICER’s opinions are non-binding on the US’ multiple payers. But the UK reimbursement process in particular is a familiar dance: manufacturers go in with aggressively priced, highly novel medicines – Onpattro is the first RNA interference (RNAi)-based drug ever approved in the US and Europe –  and NICE says ‘no way’, even with the more generous cost-effectiveness thresholds that accompany highly specialised technologies. Manufacturers come back with a revised price (typically) or some other kind of patient access agreement (less often), and the drug may then get a green light. The approval may apply only to a certain patient groups – though with only about 150 ATTR sufferers in the UK, restrictions may be less likely in this case.

 

The steps are so familiar that Ionis’ spokesperson admitted that NICE’s decision was “not unexpected”. NICE’s objections tend to cover similar ground, too – besides price, manufacturers are regularly chastised for assumptions made in their economic models and costings, usually biasing in favour of treatment, and insufficient evidence of long-term benefits (a fact of life for new medicines).

 

One might wonder why sponsors do not check in ahead with NICE – which offers sponsors early advice – and use more conservative estimates. The companies had already offered NICE confidential discounts. But the estimated incremental cost per quality-adjusted-life year (QALY) for Tegsedi was still nearly three times the threshold (per the manufacturers’ own economic model) and over six times using NICE’s preferred model. ICER, similarly, is recommending discounts of between 90-97% for the drugs.

 

These are not slight adjustments. Nearly 20 years after NICE came into being, the discrepancies between manufacturers’ and payers’ estimates of value can still be vast – even, as in this case, when there is more than one option (Pfizer has a similar drug on the way in a related disease). Alnylam anticipated payers’ value-quest in the US, engaging in discussions around value-based agreements for Onpattro with payers including Harvard Pilgrim Healthcare, Express Scripts, Aetna. That is good. Prices that are closer to payers’ well-publicised thresholds would be even better – not least for patients, who could access treatments faster.

GSK buys Tesaro to re-enter oncology race

GlaxoSmithKline’s latest deal to buy US cancer company Tesaro looks a bit like a strategic U-turn. In 2014, Sir Andrew Witty, then CEO, did a swap-deal with Novartis: it sold off the company’s established oncology business because it was un-competitive, and bulked up instead on consumer healthcare. Now, Witty’s successor Emma Walmsley has ditched a flagship consumer brand in India, the malted drink Horlicks, and is paying $5.1 billion for Tesaro’s marketed oncology drug, Zejula (niraparib), and a pipeline.

 

 

It is not quite a U-turn: Witty maintained some promising early-stage cancer programs, and the intention was to bide time until these came through, potentially leap-frogging rivals, including in the white-hot immune-oncology space. But the internal assets were never going to be enough. And shopping for cancer assets is pricey – GSK paid a 110% premium to Tesaro’s 30-day average share-price, sending its own stock plummeting (even though Tesaro’s share price had been even higher earlier on in the year).

Zejula is a PARP (poly-ADP ribose polymerase) inhibitor, which works by blocking cancer cells’ ability to repair their own DNA. The class is highly promising, but Zejula, approved in the US in 2017 for recurrent ovarian cancer, is not at the front. AstraZeneca and Merck & Co.’s pioneer Lynparza (olaparib) has been available for four years for advanced ovarian cancer. In 2018, it was approved for use in some forms of breast cancer, and showed strong Phase III data supporting earlier use in ovarian disease – all of which solidifies its lead over rivals, including Clovis Oncology’s Rubraca (rucaparib), which was recently awarded FDA breakthrough designation for use in prostate cancer. Meanwhile, Pfizer came onto the scene in October 2018 when Talzenna (talazoparib) was approved for patients with a certain kind of breast cancer.

In short, GSK is joining a suite of more experienced rivals in a hotly-contested race to expand PARP inhibitor use into other cancer types. Walmsley points out that the Tesaro deal will build GSK’s commercial capability in oncology as well as its pipeline. But catching up will be tough – and will require more capital still, beyond the $3.8 billion generated by the Horlicks sale.

Hence investors’ flight from the stock despite reassurances that the hallowed dividend would be protected. There are bright spots, including the vaccines division and HIV-focused ViiV Healthcare. And GSK has successfully dampened the impact of generic Advair on its flagship respiratory franchise. But in pharmaceuticals, the company has spent years organizing and re-organizing its R&D, shifting its focus in and around emerging markets,

consumer health and generics. These changes have come at a cost, in terms of innovation, performance, and trust. It’s precisely these three pillars that Walmsley has identified as GSK’s priorities – for the long-term.

The diabetes battle: Will Novo’s oral GLP-1 knock Trulicity off its perch?

Timing is of the essence for Novo Nordisk. The Danish company may use its priority review voucher to accelerate oral GLP-1 agonist candidate, semaglutide, past the regulators – though a decision is not confirmed. Buying a few more weeks – or months – to eat into sales of Lilly’s fast-growing once-weekly injectable GLP-1, Trulicity, would make sense. That drug is already head-to-head in market share terms with Novo’s pioneer once-daily injectable GLP-1, Victoza. And in November 2018, Lilly played a new trump card: superior cardiovascular outcomes data, versus placebo, for Trulicity in the 9,900-patient REWIND trial. Uniquely, according to Lilly, two thirds of the patients included in the trial did not have heart disease to begin with. The 5-year median follow up period is also the longest in any GLP-1 study, the company claims.

Novo has already launched its own once-weekly contender to rival Trulicity. Ozempic (injectable semaglutide) was approved in late 2017 in the US, with trial evidence suggesting it may lower blood sugar and promote weight loss to a greater extent than Trulicity. The Danish company has been working hard to try to claw back some of Lilly’s gains, but Trulicity’s $2 billion 2017 sales still dwarf young Ozempic’s (though Victoza is still category leader, selling $3.5 billion in 2017).

Novo’s once-daily pill version of Ozempic won’t be available before the end of 2019 – even with the priority review. But if approved, it could help Novo shore up its leadership of the GLP-1 space. And that is the most important battlefield in diabetes right now. These biological drugs lower blood sugar by stimulating insulin release and inducing satiety. They can help delay patients’ progression onto injected insulin, and, crucially, they are much easier to use than insulin. They are taken as a standard dose, without the requirement to measure blood sugar levels. That matters a lot, since adherence is the key challenge in diabetes: the drugs work perfectly well in controlled trials, but have proven far harder to use effectively in the real world. GLP-1s are more valuable commercially, too, as insulin prices continue to be eroded by competitive pressures, including from biosimilars. GLP-1 drugs will account for the largest chunk of diabetes drugs’ sales by 2024, according to analysts.

GLP-1 agonists have already evolved from twice- and once-daily to once-weekly injections, ramping up billions in sales in the process. By creating an oral version – one of the first oral

formulations of a biologic drug – Novo could hit another jackpot, if patients find it easier to take than a weekly injection.

There is an ‘if’. Most people would prefer to avoid needles. But swallowing oral semaglutide does require some fore-thought. The drug must be taken on an empty stomach, with water (but not too much), and at least 30 minutes prior to a meal. Otherwise, it may not work properly. As David Kliff, publisher of Diabetic Investor, notes, these constraints “add an element of uncertainty” to a drug that most analysts believe will be a sure win.

There will be a pricing battle, too. If Novo prices oral semaglutide like a pill, it might gain market share but risks accelerating price declines for injectable GLP-1s, including its own Ozempic. Either way, Lilly will push Trulicity’s cardiovascular data hard. (Oral semaglutide narrowly missed showing a statistically significant reduction in major adverse cardiovascular events versus placebo, in the last of ten trials supporting its efficacy and safety. It did show a statistically significant reduction in all-cause mortality among the approximately 3000 patients with high CV risk, however.)

Kliff reckons there may, by late 2019, be another game in town: Intarcia Therapeutics’ GLP-1-releasing implant. No pills, no injections, just a match-stick-sized device inserted under the skin of the abdomen, changed every six months. But FDA rebuffed the exenatide micropump in late 2017, prompting staff cuts and a long silence from the company.

If and when Novo’s oral GLP-1 is approved, it may bump up against another highly competitive class of oral diabetes drugs: SGLT-2 inhibitors. These are locked in their own battle for market share as sponsors push data showing the treatments may help reduce the risk of cardiovascular and kidney disease.

The diabetes drug market will remain dynamic, as incumbents battle it out using pricing and convenience to secure optimal market access.

Bayer Cuts Internal R&D, Looking Outside

Bayer’s late November announcement of 12,000 job cuts and a focus on ‘collaborative research models’ and ‘external innovations’ to fuel pharma R&D is not a surprise. Rumors had been swirling for months in the German press. Bayer board member and innovation chief Kemal Malik talked candidly to IN VIVO earlier in 2018 about Big Pharma’s existential challenge. Declining internal R&D productivity, and new sources of innovation scattered widely across companies of all sizes and in all corners of the globe, are forcing change. “We will pivot to a new model for sourcing innovation,” he predicted.

So here it is. Bayer is now taking what is described as an “essential step” to focus on external, not internal, innovation. Most other pharma firms have already done so, to different degrees. The rate of scientific and technological progress means any single pharma, however large, cannot expect to capture more than a tiny part in-house. Collaboration is crucial – for new tools, new approaches and new attitudes.

Collaboration is also cheaper than investing in internal R&D. Paul Stoffels, EVP and Chief Scientific Officer of Johnson & Johnson, reckons that for each dollar it pays into its JLABS biotech incubators – one of the several channels the company uses to access external innovation – other investors fork out $4. These biotechs don’t, of course, deliver ready-made drugs to J&J. But they nevertheless provide a highly-leveraged external innovation engine.

In its bid for “sustainable business success,” Bayer is now moving more aggressively in the same direction. The German conglomerate’s Bayer Leaps program, which got off the ground in 2016, was the start. Bayer Leaps is a series of large, long-term equity investments, alongside other backers, to build new companies working with stem-cells, CRISPR gene-editing, synthetic biology and other cutting edge tools. The aim: to create best-in-category businesses as the foundation for future partnerships – and the future pipeline.

The Bayer Leaps programs were intentionally kept outside the main organization, because, in Malik’s words, “change challenges people, their role, their careers.” As the fresh young seedlings take root, though, the main plant will be cut back to provide space and sunlight.

That said, Bayer’s recent streamlining is not, ostensibly, linked to particular progress within the Bayer Leaps portfolio – these are still early stage ventures. They won’t fill the post-patent-expiry gaps left by heart drug Xarelto and eye treatment Eylea. The move is instead about improving focus, efficiency and agility, generating savings to spend on in-licensing some pipeline. The group is also divesting its animal health business and two non-core consumer product categories.

The head-count cull may also help shift the culture of this 150-year old company. The appetite for change among many of its employees will be virtually zero. A majority may have built their careers around an R&D model that they see little reason to change. Yet the reality today is that “where an innovation comes from is less important than how we turn it into benefit for patients,” as Chairman Werner Baumann put it in his statement accompanying the announcement.

The recent FDA approval of cancer drug Vitrakvi (larotrectinib) is a case in point. The treatment is among the first to target tumors based on their genetic mutations, not their location in the body. Bayer can claim the drug as theirs: they will sell or help sell it. But Bayer did not discover or develop it. That was down to five-year-old Loxo Oncology. The global partnership was signed a year ago.

Will Trump Succeed in Curbing Drug Prices in 2019?

US President Donald Trump wants to peg US in-patient drug prices to an international drug price index, comprising mostly European countries. He is calling for an end to other countries’ “freeloading” off the US, which has the highest drug prices in the world.

Trump is proposing one of the most draconian changes to US drug pricing, and one which looks, for a Republican President, oddly socialist. The plan would cap the amount that the US government payer, the Centers for Medicare & Medicaid Services (CMS), would reimburse so-called “Part B” (out-patient) drugs at a yet-to-be-determined indexed rate of international drug prices. And it would pay physicians a flat-fee for administering these drugs, rather than, as under the current system, a proportion of a drug’s average sales price. This often incentivizes them to use pricier treatments.

Trump’s proposal, as laid out, is unlikely to come into effect, according to policy analysts at Capital Alpha in Washington. Apart from likely resistance from those Republicans opposed to price controls and the potentially negative impact on innovation, there’s a huge risk to patient access, if manufacturers play hard ball and don’t sell at the mandated price. There is no law forcing them to make their products available. Such a scenario would be disastrous, politically and socially.

Something needs to be done, though. The US spends twice as much per capita on prescription drugs than the UK, and the bill continues to rise. Drug firms see the risk: many of the largest players have voluntarily agreed to rein in price rises (a couple have actually decreased prices). They are trying to look socially responsible, as news headlines have highlighted the most egregious cases of drug price inflation, stoking public anger.

The problem is not just manufacturers’ price-setting, though. It is also the complex, contorted US drug supply chain and reimbursement system, which involves multiple middlemen, each shaving off a slice of the drug price as rebates or discounts. Pharmacy benefit managers (PBMs), which purchase prescription drugs on behalf of health plans, have come under increasing fire for lining their pockets. Some physicians, too, have benefited from high drug costs.

Yet PBMs, especially the larger ones, can also help negotiate lower prices for certain drugs – and have done so in the past. There is no single villain in– or simple solution to – the thorny US drug pricing debacle.

Meanwhile, Pfizer in November 2018 announced that 41 of its drugs will become more expensive in 2019, with one product’s price rising by 9%. This is still a far cry from wholesale price increases of previous years, though, and still within the voluntary 10% limit agreed by most of the biggest players, following Allergan’s 2016 lead. 90% of Pfizer’s portfolio will not see price increases at all. And drug-makers are more proactive about outcomes-linked pricing: Bayer offered payers a deal on its $32,000-per-month brand new cancer drug, Vitrakvi (larotrectinib) the moment it launched in the US on November 26. If patients don’t respond within 90 days, the drug cost is refunded.

Still, Pfizer’s announcement has stoked the flames of a debate that will continue through 2019 and beyond. Bernstein analyst Ronny Gal suggests that, with unpleasant pricing plans like Trump’s on the table, drug firms have little to lose and may have something to gain by increasing prices. It gives them a bargaining chip in forthcoming negotiations around some kind of price-curbing arrangement, even if it is not internationally-indexed prices.

In respiratory diseases, it is all about delivery

When Vectura’s nebulised form of budesonide, VR475, failed its Phase III asthma trial in late November 2018, the UK company blamed the drug, not the device. A conventional nebulizer also failed to significantly impact exacerbations, versus placebo.

In respiratory diseases, like in some corners of diabetes, the delivery device often does matter more than the drug. Many of the active substances have been around for decades. Among patients with conditions like asthma and chronic obstructive pulmonary disease, outcomes are hugely dependent on correct use of inhaler devices. That has been shown in real world studies, such as the CRITIKAL asthma review, published in 2017.

The problem is that devices can be tricky to use. Several require patients to follow a multi-step process, inhale with just the right force at just the right time, and even then it may not be clear whether the dose has been taken. Many physicians do not know how to use them, either.

So the competition is around who can offer the most convenient, easy-to-use delivery device – one shown to generate the best adherence data, fewest medication errors and thus lowest medication wastage among a given patient group.

Vectura hopes the ‘guided inhalation system’ technology used in VR475 may yet find its place among younger asthma sufferers. The system guides patients through a series of slow, deep breaths and notifies them when treatment is complete, logging adherence data in an app, too. Phase II data for VR647 earlier in 2018 suggested that children found the breath-activated delivery system easy to use, with little or no loss of medication.

Meanwhile, Vectura’s partner Mundipharma in September 2018 launched the easy-to-use flutiform k-haler in the UK, with further European launches expected over the coming months. The k-haler delivers a well-known drug duo of inhaled corticosteroid and long-acting B2 agonist (LABA). But its sponsors claim it is more user-friendly than conventional metered dose inhalers, requiring only gentle inhalation to trigger dose release, rather than the high inspiratory force needed for dry powder inhalers. The result, the companies say, is fewer inhaler errors, and better outcomes for patients.

Delivery may also help determine the winner in another competitive respiratory sub-category: injectable therapies for severe asthma. GlaxoSmithKline, AstraZeneca, Teva,

Novartis/Roche and Sanofi/Regeneron all have monoclonal antibody therapies in this space: Nucala (mepolizumab), Fasenra (benralizumab), Cinqair (reslizumab), Xolair (omalizumab) and Dupixent (dupilumab), respectively. Dupixent, an excema drug only recently approved by FDA for moderate to severe asthma, may have the edge, even though it is last to the party.

That’s because, as a pre-filled syringe for sub-cutaneous injection, it is the only one that can be delivered at home. There will be other factors in play, though: Fasenra is given only once every eight weeks, while Dupixent is administered every other week. (The others are once-monthly). Pricing will also play a big role in the battle among these £30-40,000-a-year injectables, and they may soon face a new competitor as AZ/Amgen receive FDA breakthrough designation for tezepelumab, which could serve a broader range of patients.

Finally, delivery systems are driving some unusual dynamics post-Advair, too: sales of GSK’s blockbuster continue to erode, but more slowly than many anticipated, and not because of true generics. Several generic candidates have been delayed at FDA due to challenging bioequivalence hurdles – it is tough to re-produce GSK’s Diskus delivery device. So Teva in 2017 launched a drug-device combo using its own RespiClick device, called AirDuo RespiClick. That cannot be substituted for Advair. But Teva simultaneously launched its own, cheaper, substitutable generic of AirDuo RespiClick, effectively delivering the lower-cost alternative that many payers and patients were waiting for.

Movember: Prostate cancer, largely controllable, still kills; increasing prevalence driving drug development

It’s November, and if the men around you are sporting especially robust moustaches, don’t worry. It means they are paying attention to their health.
During Movember–a mashup of “moustache” and “November”–men grow out their moustaches to raise awareness of men’s health issues.

It’s not just about awareness: The Movember Foundation is a global charity focused solely on men’s health–especially suicide prevention and mental health, and testicular and prostate cancer.
We’re focusing on prostate cancer. But because it affects only men, and men are less likely to seek preventive care than women, awareness is crucial. Early diagnosis usually means a positive prognosis. But men aren’t getting that early diagnosis.

Disturbing changes

Overall cancer incidence (1999-2014) and mortality rates (1999-2015) have dropped, according to 2018 Annual Report to the Nation on the Status of Cancer. But the news isn’t as positive for prostate cancer. Researchers reported increased incidence of late-stage prostate cancer; they also found that, after decades of decline, prostate cancer mortality has stabilized. Perhaps of greatest concern is an increase in men diagnosed with late-stage prostate cancer that has spread.

Roughly 164,690 prostate cancer diagnoses will be made before the year is over, according to the American Cancer Society. More distressing, 29,430 men will die from the disease. Globally, prostate cancer diagnoses are expected to double to 1.7 million by 2030.

A January 2018 report from Datamonitor Healthcare estimates that the cases of prostate cancer will increase by more than 25 percent between the 2016 and 2036 across the US, Japan, France, Germany, Italy, Spain, and in the UK.

In the U.S., prostate cancer is the second-leading cause of cancer death in men, behind lung cancer. That’s one reason Movenber is so important: Not merely that men are dying, but that it’s largely preventable. When caught early, successful treatment and recovery is likely, with 5-year relative survival rates for localized and locally advanced disease approaching 100%. Source: SEER 2018

Current therapies

Given the number of men affected, there’s tremendous incentive for drug development. So it’s little surprise that an array of drugs are approved for prostate cancer. Among the newer ones are anti-androgen medications. By decreasing testosterone levels, they starve the cancer cells. Research has shown that anti-androgen drugs can delay cancer growth, in many cases by years.

Androgen deprivation is, of course, considered a form of chemical castration. However, castration-resistant prostate cancer (CRPC) keeps growing no matter how much the testosterone drops. Treating CRPC remains an unmet need in prostate cancer, which has spurred drug development.

New approaches, new challenges

CRPC drug development will likely change the way that the disease is treated, creating a competitive environment for new market entrants, according to the January 2018 Datamonitor report. Treatment may become more segmented as pipeline drugs with new mechanisms of action
reach the market.

However, novel therapies tend to be expensive and are likely to drive up the cost of treatment. Payers in the U.S. and France, Germany, Italy, Spain and the U.K. have expressed concern about the significant and rising cost of prostate cancer treatment, according to a June 2017 Datamonitor report.

In particular, they are worried about rising costs associated with the use of expensive novel anti-androgens in earlier treatment lines. Patients needing anti-androgens represent larger patient numbers than those with CRPC, and they also require significantly longer treatment durations due
to longer life expectancies and slower disease progression.

So, this Movember…

Development of efficacious therapies for prostate cancer treatment, particularly CRPC, remains an area of high demand. Find out more about the Prostate Cancer Market.

Orphan Assets Still Hot as Pricing Debate Rages

LEO Pharma’s November 2018 deal with rare disease play PellePharm, worth up to $760 million, is just one recent example of the value that orphan drug assets can command. PellePharm’s lead candidate, patidegib, treats a little-known skin disease called Gorlin Syndrome that affects just a few thousand patients. Yet for dermatology-focused LEO, this was a strategic move into rare skin conditions – where treatments can be priced far higher, and enjoy a faster regulatory pathway and more lenient reimbursement conditions, than most drugs for more common diseases. Patidegib has orphan drug designation and Breakthrough Therapy status from FDA.

Orphan drug approvals have surged since the Orphan Drug Act was introduced in the US over 20 years ago, followed by similar incentive packages across Europe and Japan. A law designed to encourage investment into treatments for rare and under-served conditions has been used – and many say, abused – well beyond expectations. Individual conditions may be small, but the sales generated by orphan drugs as a class have doubled in the last decade, with some predicting that the category will command a fifth of all prescription drug sales by 2022.

Historically, orphan drugs escaped pricing scrutiny due to the limited number of patients involved. That is changing. They are now front and center in the wider payer backlash against excessive drug prices. One reason is that drug manufacturers have taken advantage of orphan benefits by assembling multiple, orphan-sized indications for the same drug – so-called ‘salami slicing’. This has resulted in huge overall sales for individual products: Celgene’s Revlimid (lenalidomide) sold over $8 billion in 2017, and is expected to top $12 billion by 2022. Even AbbVie’s Humira, the world’s largest-selling drug ever, has a couple of orphan indications.

Another reason orphans are now in the payer spotlight is that many of the newest treatment modalities, including gene therapy and CAR-T cell therapies, are orphan drugs. And some of these are intended as one-time treatments, with price tags to match. Spark Therapeutics’ Luxturna, the first US-approved gene therapy for an inherited retinal disease, is one example. It costs $425,000 per eye. Novartis’ CAR-T therapy Kymriah (tisagenlecleucel) is another; it is priced at $475,000.

These therapies have forced manufacturers and payers to explore new payment mechanisms. Outcomes-linked payments are a logical way forward: Spark and Novartis are among those that have engaged in such deals. But they are not easy to implement. A pilot program at the US government’s Centers for Medicare and Medicaid Services (CMS) exploring value-linked pricing for Kymriah was abandoned earlier this year, though deals with individual treatment centers remain in place, Novartis says. Spark reports “advancing discussions” with CMS on an installment payment option for Luxturna, and in early November said the first two patients had been treated under its outcomes-based contracting model with commercial payers.

With multiple new orphan drugs in the pipeline (many cancer drugs are orphans) and with drug pricing still firmly in politicians’ cross-hairs, these reimbursement discussions and experiments must continue. Luxturna was recently recommended for European approval, triggering payer engagement there, too.

LEO Pharma may be joining the rare diseases party just as the music starts to fade a little. But orphan drugs are still a critical – and growing – treatment category.

For a fuller account of the latest trends in orphan drug pricing and reimbursement, including country-by-country analysis of orphan reimbursement, case studies and approval figures, see “Latest Trends in Orphan Drug Pricing and Reimbursement,” published by Datamonitor Healthcare.