[Ip-health] The People Who Brought You Cheaper Hepatitis C Drugs Are Going After Cancer Next - Bloomberg

Claire Cassedy claire.cassedy at keionline.org
Fri Jan 23 12:56:50 PST 2015


The People Who Brought You Cheaper Hepatitis C Drugs Are Going After Cancer

By Robert Langreth and Drew Armstrong
January 22, 2015 5:08 PM EST

Express Scripts Holding Co. (ESRX), which this year forced price
concessions from makers of $1,000-a-day hepatitis C medicines, has set its
sights on $37 billion in U.S. spending on cancer medications. Its goal is
to start influencing the drugs’ costs as soon as next year.

Express Scripts is the country’s biggest manager of prescription drug
benefits. However, its reach doesn’t extend to many injected or infused
cancer drugs administered in doctors’ offices and hospitals, not dispensed
in retail pharmacies. The St. Louis-based company’s ambition is to change
that, including eventually for new drugs that trigger the body’s own immune
system to attack tumors and can cost $150,000.

“We want to be able to start influencing the market by 2016,” said Steve
Miller, Express Scripts’ chief medical officer, in an interview at
Bloomberg’s offices in New York. “We are accumulating all the keys to the
puzzle to be able to do this.”

In December, Express Scripts upended the pharmaceutical industry when it
blocked Gilead Sciences Inc.’s hepatitis C drug Harvoni from its main list
of covered medicines in favor of a competing treatment from AbbVie Inc.
Express Scripts got AbbVie’s drug at a discounted price, and the move
ignited a back-and-forth price war between the drugmakers, which have
offered discounts to other payers in return for coverage.

Express Scripts administers pharmacy benefits for about 85 million people
in the U.S., and its main formulary covers 25 million of those.

$150,000 Drugs

Merck & Co. and Bristol-Myers Squibb Co. have the first of the new class of
cancer drugs, called PD-1 inhibitors, on the market for melanoma. They’re
testing them in numerous other tumor types. The medicines cost about
$150,000 a year and are expected to be widely used. Roche Holding AG,
AstraZeneca Plc and others are developing similar drugs in a class that
analysts have projected could eventually generate as much as $40 billion in
annual global sales.

Spokesmen for Merck and Bristol-Myers declined to comment.

Miller acknowledged that managing cancer treatment is far more complex than
hepatitis C, with sometimes ambiguous outcomes during an emotional process
for patients. “We are going to have to walk gingerly, but make no mistake
we are on that walk,” he said.

Miller said he has been meeting with top oncologists. The company is also
looking at how to work more closely with doctors to steer doctors to
preferred drugs in ways that don’t upset patients.

Expensive Pipeline

There is a large pipeline of new cancer medicines as well as innovative
drugs for other diseases coming to market, Miller said. That trend should
help patients yet will also stress the health-care system’s ability to pay
for care. The IMS Institute for Healthcare Informatics estimated that the
country spent $37.2 billion on oncology drugs in 2013.

While drugs at upwards of $100,000 a year have been around for years, the
conditions they treated were usually limited to rare disorders, including
enzyme deficiencies and unusual cancers. Now such prices are spreading to
more diseases, and are especially prominent for cancer.

Half of the about 30 cancer drugs introduced since 2010 cost $10,000 a
month or more and all were at least $5,000 a month, according to data
compiled by Memorial Sloan Kettering Cancer Center, in New York. Only four
of 44 cancer drugs introduced in the 1990s cost more than $5,000 monthly.

To contact the reporters on this story: Robert Langreth in New York at
rlangreth at bloomberg.net; Drew Armstrong in New York at
darmstrong17 at bloomberg.net

More information about the Ip-health mailing list