ICER chastises J&J for overpricing depression drug esketamine ‘where there is such need for treatment’

Cognizant of the myriad of approved antidepressants that often don’t work, regulators endorsed J&J’s $JNJ pharmaceutical version of the hallucinogenic anesthetic ketamine — esketamine — in March for treatment-resistant depression, well aware that the original cat tranquilizer is frequently used off-label for severe depression. On Thursday, ICER concluded that while the drug, sold as Spravato, does confer a “promising” clinical benefit, its current list price exceeds a common cost-effectiveness threshold by a modest margin.

In 2017, an estimated 17.3 million adults in the United States — roughly 7% of all US adults — had at least one major depressive episode, according to the NIH. Most antidepressants usually take a few weeks to work – and half of the patients fail to fully respond. The party drug (sometimes referred to as Kit Kat or Vitamin K) and anesthetic ketamine which can lift depression in many patients within hours, must be administered through infusion but can have profound dissociative side-effects, and patients typically relapse after treatment ends.

Esketamine is a low-dose, nasal-spray formulation of ketamine — but due to its side-effect profile, the J&J treatment is designed to be administered in the presence of a healthcare practitioner.  It was approved on the basis of five pivotal Phase III studies in patients with treatment-resistant depression.

The data used to approve the drug suggests it is clinically effective — but with the absence of long-term safety data, the evidence is “promising but inconclusive,” ICER researchers said. Since there are no head-to-head trials comparing esketamine with any comparators — such as ketamine, electroconvulsive therapy, transcranial magnetic stimulation, oral antidepressants, or augmentation with antipsychotics (e.g., olanzapine) — its relative benefit is also hard to judge, they added.

Akin to NICE in the UK, ICER is an independent body that analyzes the cost-effectiveness of drugs and other medical services in the United States. Unlike NICE, though, ICER is not government-affiliated, but its determinations are increasingly becoming influential with payers.

ICER conducted its analyses using two measures: 1) QALYs, or quality-adjusted life-years, a measure of the state of health of a person or group in which the benefits — in terms of length of life — are adjusted to reflect the quality of life. Essentially, one QALY is equal to one year of life in perfect health. 2) Life years gained (LYG), which expresses the additional number of years of life that a person lives as a result of receiving treatment.

Compared with no additional treatment beyond a background antidepressant, treatment with esketamine plus a background antidepressant resulted in important QALY gains in patients with treatment-resistant depression (TRD), ICER said.

Using the esketamine list price of $295 per 28 mg intranasal device, the treatment’s use results in an incremental cost-effectiveness ratio of approximately $198,000 per QALY compared to no additional treatment, exceeding the commonly cited cost-effectiveness thresholds of between $50,000-$150,000 per QALY. Meanwhile, esketamine is estimated to cost approximately $2.6 million per life year gained, ICER found.

Esketamine’s approval was also meant to enhance access to treatment — since ketamine is not covered by health insurers — although there is a concern that there may still be high out-of-pocket expenses through deductibles or non-coverage policies.

David Rind

“Esketamine shows some benefits for such patients and provides an FDA-approved treatment for TRD that may be covered by payers; however, it is concerning to have an overpriced therapy where there is such need for treatment. Additionally, the similarity of ketamine to esketamine raises issues for all stakeholders about how to consider off-label prescription and coverage of a treatment that has not been as well studied but is being increasingly used for TRD,” said ICER’s CMO David Rind in a statement.

The ICER report was published on Thursday having incorporated the feedback from patient groups, clinicians, drug manufacturers, and other stakeholders to the draft version originally unveiled in March. A final report is expected to be published in June, following a vote later this month.

J&J disagrees with this report, a Janssen spokesperson told Endpoints News. “It underestimates the proven short- and long-term benefits that this treatment…brings to TRD patients in need. The inaccurate assumptions in the draft report related to the positive benefit risk profile of Spravato and the comparison between this FDA approved treatment and ketamine, a treatment being used off-label that has not been adequately studied and is viewed as experimental for TRD, are reckless.”

Due to a lack of comparative data between esketamine and ketamine, ICER was not able to examine relative cost-effectiveness between the two therapies. Instead, the institute compared the individual one-year costs and found that esketamine was ten times more expensive than ketamine in the first year of use — despite the administration costs associated with providing ketamine intravenously.

The best place to read Endpoints News? In your inbox.

Comprehensive daily news report for those who discover, develop, and market drugs. Join 51,200+ biopharma pros who read Endpoints News by email every day.

Free Subscription

VP Oncology Biology
Skyhawk Therapeutics Waltham, MA
Associate Director CMC
Elektroki Boston, MA
Director Process Development
Elektroki Boston, MA
Research Scientist - Immunology
Recursion Pharmaceuticals Salt Lake City, UT

Visit Endpoints Careers ->