CVS Health Corp recently announced that, in its standard drug plan beginning in 2017, it will replace an expensive branded drug for the prevention of Neutropenia with a new, cheaper copy of biotech medicine. The CVS development shows the importance of price point to drug uptake. In particular, CVS will be substituting Amgen’s Neupogen with Novartis’s Zarxio, a cheaper biosimilar. This surprised the stock market. Neupogen and G-CSF biosimilars are a $1.6 billion market in the U.S. alone, and the market for Amgen’s Neulasta is even bigger at $4.1 billion in sales last year in the U.S.
While most biosimilars are priced at 70 percent of the branded drug price, the price for Neupogen is $4,600 per cycle, and the price for G-CSF biosimilars is $3,900 per cycle. This is 85 percent of the price of the branded drug.
Anticipating this trend, BeyondSpring is developing a drug to prevent Neutropenia, the same condition as Neupogen (Neutropenia). CVS’s announcement comes as no surprise since payers seek to minimize the overall cost of patient care. BeyondSpring can price its drug similar to or lower than biosimilar G-CSFs, due to its markedly lower cost to produce its small molecule drug compared to the G-CSFs that are more costly biologics.
BeyondSpring has meetings scheduled with the FDA to review its Neutropenia prevention program and plans to follow the same protocol that the G-CSF biosimilars utilized in their successful Phase 3 trials to develop a more affordable drug for patients around the world.
Biosimilars in the U.S.
Investors know that biosimilars do well in Europe, but the U.S. has been slow to embrace biosimilars, and the question is whether biosimilars will have adequate uptake in the U.S. CVS’s decision is a major turning point, as a big company replaced a branded drug. A change in the mindset of a U.S. payer has been heralded. This further illustrates the importance of price point in uptake of drug, a trend that suits Beyondspring’s drug very well as it is inexpensive to manufacture.
BeyondSpring’s drug, Plinabulin, with a differentiated mechanism will come at an opportune time and be welcomed in the context of the ongoing conversation around the rising cost of healthcare. This is also a drug which augments the anti-cancer effect of chemotherapy.
Why It’s Important
The development of a drug for the mitigation of Neutropenia is greatly needed. Neutropenia is the destruction of white blood cells, which are important for protecting the body against infection. Neutropenia can occur in as many of 37 percent of patients treated with chemotherapy. Patients with Neutropenia are more susceptible to bacterial infections and, without prompt medical attention, this condition can become life-threatening.
Approximately 20 percent of patients with chemotherapy develop Febrile Neutropenia, which is severe Neutropenia combined with fever. More than 60,000 patients are hospitalized each year for Neutropenia associated with fever, which can often cause serious infections. In addition, Neutropenia leads to death in up to 18 percent of these cases.
Amgen’s drugs and the GCS-F biosimilars are approved by the FDA for the prevention, not for treatment, of chemotherapy-caused Neutropenia. A prevention approval might imply that 100 percent of patients who receive chemo would also be prescribed a GCS-F; however, only about 20 percent of patients receive GCS-Fs because of cost and convenience considerations. Expert Douglas W. Blayney, M.D., FACP a Professor of Medicine (Oncology) at the Stanford University Medical Center and a Board member for the NCCN guidelines on Neutropenia management, adds that some additional use of G-CSF is for treatment, rather than for the approved prevention indication, after a patient has tested for low neutrophils in the blood.
Data from Cancer Care Ontario indicates that 40 percent of patients receiving chemotherapy for potentially curative treatment of breast and colon cancer require emergency room hospital visits to treat the consequences of Neutropenia. As Ontario and Canada at large is a single payer system, its data captures the data of all patients.
Trend in Neutropenia Mitigation Drugs
CVS’s action to manage costs by using a biosimilar may be the beginning of a trend from other payers. BeyondSpring’s market research indicates strong payer interest in a new drug with better product characteristics at similar prices of the G-CSF biosimilars for Neutropenia. The decision by CVS demonstrates the importance of price point to drug uptake. Thus Plinabulin can take advantage of this trend, being an inexpensive to make small molecule with product characteristics at least as good as or better than G-CSF.
Author Richard A. Brand, M.B.A., is the Chief Financial Officer of BeyondSpring Pharmaceuticals, a clinical stage biopharmaceutical company focused on the development of innovative cancer therapies, including a Phase 3 immuno-oncology compound and strong pipeline in collaboration with the Fred Hutchinson Cancer Research Center.
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