As mag­ni­tude and fre­quen­cy of drug price hikes thaw, Ex­press Scripts re­ports low­est in­crease in spend­ing by com­mer­cial plans in 25 years

In an era where drug­mak­ers and pre­scrip­tion drug man­agers (PBMs) point fin­gers at each oth­er when it comes to jus­ti­fy­ing the rea­sons be­hind ris­ing drug prices — the largest US PBM, Ex­press Scripts, on Wednes­day re­leased a re­port in­di­cat­ing that in 2018 em­ploy­er-spon­sored plans paid rough­ly 6 cents more, on av­er­age, for a 30-day pre­scrip­tion (0.4% hike) ver­sus the pre­ced­ing year, mark­ing the small­est in­crease in com­mer­cial plans in a quar­ter cen­tu­ry.

The com­pa­ny an­a­lyzed pre­scrip­tion drug use da­ta of rough­ly 34.2 mil­lion mem­bers with a phar­ma­cy ben­e­fit plan and cal­cu­lat­ed that it had saved its mem­bers $45 bil­lion in pre­scrip­tion drug costs in 2018.

Al­though spend­ing on tra­di­tion­al, non-spe­cial­ty med­ica­tions dipped 5.8%, spend­ing on spe­cial­ty med­ica­tions rose 9.4%, Ex­press Scripts said. Drugs for in­flam­ma­to­ry con­di­tions such as rheuma­toid arthri­tis and Crohn’s dis­ease ac­count­ed for the costli­est ther­a­py class for the third con­sec­u­tive year, cost­ing em­ploy­ers $174.45 per mem­ber per year in 2018, up 14% from 2017, it added. Glob­al­ly, Ab­b­Vie’s in­flam­ma­to­ry drug Hu­mi­ra — the world’s best-sell­ing med­i­cine — gen­er­at­ed near­ly $20 bil­lion in 2018 sales.

Di­a­betes was the sec­ond costli­est ther­a­py class for em­ploy­ers at $114.85 per mem­ber per year, an in­crease of 4.1% over 2017, the com­pa­ny said, adding that spend­ing on in­sulin, which ac­counts for 15.3% of di­a­betes pre­scrip­tions, rose 0.3% in 2018 (a 1.5% de­cline in unit costs and a 1.8% rise in uti­liza­tion). Anec­do­tal re­ports of di­a­bet­ics ra­tioning or for­go­ing life-sav­ing in­sulin in the Unit­ed States are on the rise.

For a long time drug­mak­ers jus­ti­fied their pol­i­cy of sus­tained drug price hikes on the heavy cost of in­no­va­tion. How­ev­er, as PBMs in­creas­ing­ly threat­en to ex­clude treat­ments from for­mu­la­ries — un­less they man­age to ne­go­ti­ate a dis­count sat­is­fac­to­ry to their de­mands — drug­mak­ers in re­sponse have boost­ed re­bates, and in turn hiked prices in or­der to main­tain their cut of sales.

De­spite list price in­fla­tion of 7.3% for the most com­mon­ly used tra­di­tion­al brand med­ica­tions in 2018, costs for such drugs dipped 6.5% for its em­ploy­er-spon­sored plans, Ex­press Scripts said.

The com­pa­ny has dri­ven a 0.4% de­cline in drug unit costs by steer­ing mem­bers to low­er cost ther­a­pies, and by se­cur­ing deep­er dis­counts from man­u­fac­tur­ers and phar­ma­cies, it said, adding that about half of com­mer­cial plans saw a fall in per mem­ber drug spend­ing, and a 0.3% de­cline across Medicare plans.

Twen­ty five years ago, the era of block­buster drugs was tak­ing off, char­ac­ter­ized by mid-to-high-dou­ble-dig­it an­nu­al in­creas­es in drug spend­ing, the com­pa­ny said, not­ing that to­day we are in the age of break­through treat­ments with “break-the-bank pric­ing.”

“We ex­pect man­u­fac­tur­ers of high-priced spe­cial­ty drugs, which cur­rent­ly con­sume half of all drug spend­ing, to con­tin­ue to raise prices faster than core in­fla­tion. And we ex­pect the con­tentious pub­lic pol­i­cy de­bate on how to make pre­scrip­tion med­i­cine, and es­pe­cial­ly in­sulin and oth­er bi­o­log­ics, more af­ford­able for the unin­sured and un­der­in­sured to con­tin­ue,” the com­pa­ny said, fore­cast­ing an an­nu­al drug trend of 2% for the next three years.

Da­ta in­creas­ing­ly sug­gest that pric­ing is con­tribut­ing to a small­er slice of bio­phar­ma growth than ever be­fore. In a note pub­lished ear­li­er this week, Leerink’s Ge­of­frey Porges said “pos­i­tive list pric­ing has con­tributed at least two thirds of in­dus­try growth in re­cent years and this con­tri­bu­tion ap­pears to be fad­ing, if not dis­ap­pear­ing…in many strik­ing cas­es we are see­ing sig­nif­i­cant ab­solute re­duc­tions in price, which was pre­vi­ous­ly un­think­able for this in­dus­try.” For ex­am­ple, PC­SK9 an­ti­bod­ies by Am­gen as well as part­ners Sanofi and Re­gen­eron have re­cent­ly seen heavy dis­counts, while CGRP an­ti­bod­ies from Te­va, Lil­ly as well as part­ners Am­gen and No­var­tis have tak­en a large­ly con­ser­v­a­tive ap­proach to pric­ing.

Drug pric­ing has emerged as a bi­par­ti­san is­sue and a host of law­mak­ers, in­clud­ing those rep­re­sent­ing the Trump ad­min­is­tra­tion, have pro­posed a num­ber of so­lu­tions to low­er the bur­den of drug costs on con­sumers.


Slides from Ex­press Scripts re­port

The top 10 block­buster drugs in the late-stage pipeline — Eval­u­ate adds 6 new ther­a­pies to heavy-hit­ter list

Vertex comes in for a substantial amount of criticism for its no-holds-barred tactical approach toward wresting the price it wants for its commercial drugs in Europe. But the flip side of that coin is a highly admired R&D and commercial operation that regularly wins kudos from analysts for their ability to engineer greater cash flow from the breakthrough drugs they create.

Both aspects needed for success in this business are on display in the program backing Vertex’s triple for cystic fibrosis. VX-659/VX-445 + Tezacaftor + Ivacaftor — it’s been whittled down to 445 now — was singled out by Evaluate Pharma as the late-stage therapy most likely to win the crown for drug sales in 5 years, with a projected peak revenue forecast of $4.3 billion.

The latest annual list, which you can see here in their latest world preview, includes a roster of some of the most closely watched development programs in biopharma. And Evaluate has added 6 must-watch experimental drugs to the top 10 as drugs fail or go on to a first approval. With apologies to the list maker, I revamped this to rank the top 10 by projected 2024 sales, instead of Evaluate's net present value rankings.

It's how we roll at Endpoints News.

Here is a quick summary of the rest of the top 10:

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How small- to mid-sized biotechs can adopt pa­tient cen­tric­i­ty in their on­col­o­gy tri­als

By Lucy Clos­sick Thom­son, Se­nior Di­rec­tor of On­col­o­gy Pro­ject Man­age­ment, Icon

Clin­i­cal tri­als in on­col­o­gy can be cost­ly and chal­leng­ing to man­age. One fac­tor that could re­duce costs and re­duce bar­ri­ers is har­ness­ing the pa­tient voice in tri­al de­sign to help ac­cel­er­ate pa­tient en­roll­ment. Now is the time to adopt pa­tient-cen­tric strate­gies that not on­ly fo­cus on pa­tient needs, but al­so can main­tain cost ef­fi­cien­cy.

John Reed at JPM 2019. Jeff Rumans for Endpoints News

Sanofi's John Reed con­tin­ues to re­or­ga­nize R&D, cut­ting 466 jobs while boost­ing can­cer, gene ther­a­py re­search

The R&D reorganization inside Sanofi is continuing, more than a year after the pharma giant brought in John Reed to head the research arm of the Paris-based company.
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UP­DAT­ED: Chica­go biotech ar­gues blue­bird, Third Rock 'killed' its ri­val, pi­o­neer­ing tha­lassemia gene ther­a­py in law­suit

Blue­bird bio $BLUE chief Nick Leschly court­ed con­tro­ver­sy last week when he re­vealed the com­pa­ny’s be­ta tha­lassemia treat­ment will car­ry a jaw-drop­ping $1.8 mil­lion price tag over a 5-year pe­ri­od in Eu­rope — mak­ing it the plan­et’s sec­ond most ex­pen­sive ther­a­py be­hind No­var­tis’ $NVS fresh­ly ap­proved spinal mus­cu­lar at­ro­phy ther­a­py, Zol­gens­ma, at $2.1 mil­lion. A Chica­go biotech, mean­while, has been fum­ing at the side­lines. In a law­suit filed ear­li­er this month, Er­rant Gene Ther­a­peu­tics al­leged that blue­bird and ven­ture cap­i­tal group Third Rock un­law­ful­ly prised a vi­ral vec­tor, de­vel­oped in part­ner­ship with the Memo­r­i­al Sloan Ket­ter­ing Can­cer Cen­ter (MSK), from its grasp, and thwart­ed the de­vel­op­ment of its sem­i­nal gene ther­a­py.

A new num­ber 1 drug? Keytru­da tapped to top the 10 biggest block­busters on the world stage by 2024

Analysts may be fretting about Keytruda’s longterm prospects as a host of rival therapies elbow their way to the market. But the folks at Evaluate Pharma are confident that last year’s $7 billion earner is headed for glory, tapping it to beat out the current #1 therapy Humira as AbbVie watches that franchise swoon over the next 5 years.

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John Chiminski, Catalent CEO - File Photo

'It's a growth play': Catal­ent ac­quires Bris­tol-My­er­s' Eu­ro­pean launch pad, ex­pand­ing glob­al CD­MO ops

Catalent is staying on the growth track.

Just two months after committing $1.2 billion to pick up Paragon and take a deep dive into the sizzling hot gene therapy manufacturing sector, the CDMO is bouncing right back with a deal to buy out Bristol-Myers’ central launchpad for new therapies in Europe, acquiring a complex in Anagni, Italy, southwest of Rome, that will significantly expand its capacity on the continent.

There are no terms being offered, but this is no small deal. The Anagni campus employs some 700 staffers, and Catalent is planning to go right in — once the deal closes late this year — with a blueprint to build up the operations further as they expand on oral solid, biologics, and sterile product manufacturing and packaging.

This is an uncommon deal, Catalent CEO John Chiminski tells me. But it offers a shortcut for rapid growth that cuts years out of developing a green fields project. That’s time Catalent doesn’t have as the industry undergoes unprecedented expansion around the world.

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Step­ping on Roche's toes, Mer­ck cuts in­to SCLC niche with third-line Keytru­da OK

In the in­creas­ing­ly crowd­ed check­point race, small cell lung can­cer has been a rare area where Roche, a sec­ond run­ner-up, has a lead over the en­trenched lead­ers Mer­ck and Bris­tol-My­ers Squibb. But Mer­ck is fi­nal­ly mak­ing some head­way in that di­rec­tion with the lat­est ap­proval for its PD-1 star.

The lat­est green light en­dors­es Keytru­da in the third-line treat­ment of metasta­t­ic SCLC, where it would be giv­en to pa­tients whose dis­ease ei­ther don’t re­spond to or re­lapse af­ter chemother­a­py, which would have fol­lowed at least one pri­or line of ther­a­py.

Arc­turus ex­pands col­lab­o­ra­tion, adding $30M cash; Ku­ra shoots for $100M raise

→  Rare dis­ease play­er Ul­tragenyx $RARE is ex­pand­ing its al­liance with Arc­turus $ARCT, pay­ing $24 mil­lion for eq­ui­ty and an­oth­er $6 mil­lion in an up­front as the two part­ners ex­pand their col­lab­o­ra­tion to in­clude up to 12 tar­gets. “This ex­pand­ed col­lab­o­ra­tion fur­ther so­lid­i­fies our mR­NA plat­form by adding ad­di­tion­al tar­gets and ex­pand­ing our abil­i­ty to po­ten­tial­ly treat more dis­eases,” said Emil Kakkis, the CEO at Ul­tragenyx. “We are pleased with the progress of our on­go­ing col­lab­o­ra­tion. Our most ad­vanced mR­NA pro­gram, UX053 for the treat­ment of Glyco­gen Stor­age Dis­ease Type III, is ex­pect­ed to move in­to the clin­ic next year, and we look for­ward to fur­ther build­ing up­on the ini­tial suc­cess of this part­ner­ship.”

Neil Woodford. Woodford Investment Management via YouTube

Wood­ford braces po­lit­i­cal storm as UK fi­nan­cial reg­u­la­tors scru­ti­nize fund sus­pen­sion

The shock of Neil Wood­ford’s de­ci­sion to block with­drawals for his flag­ship fund is still rip­pling through the rest of his port­fo­lio — and be­yond. Un­der po­lit­i­cal pres­sure, UK fi­nan­cial reg­u­la­tors are now tak­ing a hard look while in­vestors con­tin­ue to flee.

In a re­sponse let­ter to an MP, the Fi­nan­cial Con­duct Au­thor­i­ty re­vealed that it’s opened an in­ves­ti­ga­tion in­to the sus­pen­sion fol­low­ing months of en­gage­ment with Link Fund So­lu­tions, which tech­ni­cal­ly del­e­gat­ed Wood­ford’s firm to man­age its funds.