J&J's Esketamine, at current price, is 'low value for money' — ICER
For Johnson & Johnson’s $JNJ pharmaceutical version of the hallucinogenic anesthetic ketamine — esketamine — to be cost-effective for use in treatment-resistant depression in the long term, its list price must be cut by up to half, ICER concluded in its final report on Thursday.
Cognizant of the myriad of approved antidepressants that often don’t work, the US regulator endorsed J&J’s esketamine, branded as — Spravato — in March for treatment-resistant depression, conscious that the original cat tranquilizer is frequently used off-label for severe depression.
ICER determined that the ‘fair value-based price’ benchmark for esketamine is between $17,700 and $25,200 per year, a 25-52% discount to J&J’s annual list price of $32,400. At this price level, the institute considers esketamine delivers “low value for money” because the treatment’s incremental cost-effectiveness ratio exceeds $175,000 per quality-adjusted life year (QALY) gained.
QALYs are 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.
Based on discussions by an independent panel advising ICER, the institute calculated that potentially only 16% of eligible American patients could be treated with esketamine per year before crossing its potential budget threshold of $819 million. If priced within ICER’s value-based price benchmark range, only between 20% and 30% of all eligible patients could be treated with the drug before eclipsing the potential budget impact threshold, the institute indicated in the report.
“It is hard to understand how a price exceeding usual cost-effectiveness thresholds is appropriate for a treatment that could be very widely used, particularly when that price is an order of magnitude higher than that of intravenous generic ketamine, a closely related therapy,” David Rind, ICER’s chief medical officer, said in a statement.
Esketamine’s approval could enhance access to treatment — since generic 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.
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. Ketamine (sometimes referred to as a party drug Kit Kat or Vitamin K) 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.
On Thursday, the independent evidence appraisal committee advising ICER concluded that while the drug given in addition to background antidepressant is clinically superior compared to a background antidepressant alone — the body of evidence supporting Spravato is not compelling enough to demonstrate a difference in net health benefit between esketamine and ketamine, transcranial magnetic stimulation, electroconvulsive therapy, or augmentation with the antipsychotic olanzapine. The panel also expressed uncertainty about the long-term benefits and risks of esketamine, in congruence with the ICER report published last month.
A J&J spokesperson reiterated that the US drugmaker disagrees with ICER’s conclusions. The final report “underestimates the proven short- and long-term benefits that this treatment…Furthermore, the inaccurate assumptions in the report on the established positive benefit-risk profile of SPRAVATO are misguided.”
Akin to NICE in the UK, the Institute for Clinical and Economic Review (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.
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