| April 3
April 3 Newer cancer drugs that enlist the
body's immune system are improving the odds of survival, but
competition between them is not reining in prices that can now
top $250,000 a year.
The drugs' success for patients is the result of big bets in
cancer therapy made by Bristol-Myers Squibb Co, Merck &
Co Inc and Roche Holding AG, among others in big
pharma. The industry's pipeline of cancer drugs expanded by 63
percent between 2005 and 2015, according to the QuintilesIMS
Institute, and a good number are reaching the market.
The global market for cancer immunotherapies alone is
expected to grow more than fourfold globally to $75.8 billion by
2022 from $16.9 billion in 2015, according to research firm
GlobalData. For a graphic, click tmsnrt.rs/2omboI1
"For cancer drugs in general ... it is hard for us to drive
down cost," said Steve Miller, chief medical officer at Express
Scripts Holding Co, the nation's largest manager of
drug benefit plans for employers and insurers. "You don't want
to be in the position of being told to use the second best
cancer drug for your child."
Lawmakers on both sides of the aisle, as well as President
Donald Trump, have been grappling with how to restrain rising
prescription drug costs. They have talked about solutions
ranging from more price negotiation to faster approval of new
drugs, often invoking increased competition between drugmakers.
"Competition is key to lowering drug prices," Trump told
pharmaceutical executives at an Oval Office meeting in January.
But that is not happening with new drugs called checkpoint
inhibitors that work by releasing a molecular brake, allowing
the immune system to recognize and attack cancer cells the same
way it fights infections caused by bacteria or viruses.
For cancers like melanoma, the treatments can mean long-term
survival for around 20 percent of patients.
Bristol's Yervoy, first approved in 2011, targets a protein
known as CTLA-4. Other immunotherapies, including Bristol's
Opdivo, Keytruda from Merck, Roche's Tecentriq, and Pfizer Inc's
Bavencio, involve a different protein called PD-1.
Other targets are being explored. Some new data will be
presented this week in Washington at the American Association
for Cancer Research's annual meeting.
Current checkpoint inhibitors each have a list price near
$150,000 a year. A combination of Yervoy and Opdivo, approved by
the Food and Drug Administration for advanced or inoperable
melanoma, has a cost of $256,000 a year for patients who respond
to the treatment.
Similar immunotherapies are in development at companies like
AstraZeneca Plc. Merck, which declined to comment on
pricing plans, expects an FDA decision by May 10 on its
combination of Keytruda and chemotherapy as an initial treatment
for the most common form of lung cancer - by far the biggest
market for cancer drugs.
Pfizer said Bavencio, cleared by the FDA earlier this month
to treat Merkel cell carcinoma, a rare type of skin cancer, has
a price "comparable to other checkpoint inhibitors approved for
The pharmaceutical industry holds that discussion of
prescription drug prices has to take into account the major
investment required for innovation and discovery of new
"UNRESTRAINED PRICING POWER"
Scientific progress, and pricing power, are driving
pharmaceutical companies to emphasize oncology research.
"Most of the strategy on the part of pharmaceutical
companies assumes unrestrained pricing power," said Dr. Peter
Bach, director of Memorial Sloan Kettering's Center for Health
Policy Outcomes in New York. "We don't see evidence that
companies are pursuing cost-effective strategies."
Health insurers have had success in demanding price
concessions in some drug categories - like diabetes, where
several companies sell similar products and insurers are able to
negotiate price discounts or rebates in exchange for coverage.
According to IMS, that tactic capped the overall rise in
spending on diabetes medicines at 8 percent in 2015, compared
with an increase of 30 percent in billed invoices. All of the
invoice price growth for insulin was offset by price cuts, the
But discounting is much less common for newer, innovative
cancer drugs, mostly given by injection and approved for defined
Net price growth for branded oncology drugs averaged 4.8
percent in 2015, versus 6.4 percent for invoices, according to
Express Scripts' Miller and others said makers of new cancer
medications enjoy pricing power due to coverage requirements,
insurance plan structure and a lack of head-to-head comparison
"Cancer drugs don't compete on price," said Dr. Aaron
Kesselheim, a researcher at Harvard Medical School and author of
several studies of drug pricing. "Drug companies have market
exclusivity and we require payers to cover cancer drugs -
Medicare has six protected classes, including cancer."
Medicare, the federal government's healthcare plan for
seniors and the disabled, covers most prescription drugs under
its "Part D" pharmacy benefits. The plans are required to cover
all drugs in six classes: cancer, HIV, antidepressants,
antispychotics, seizure disorders like epilepsy, and immune
system suppressants for people undergoing organ transplantation.
Trump met recently with Representatives Elijah Cummings and
Peter Welch, both Democrats, to discuss draft legislation
allowing the government to negotiate Medicare drug prices - but
the bill preserves the six protected classes.
In addition, drugs given by injection, including many cancer
therapies, are covered under Medicare's main medical benefit.
Bristol disappointed investors when it did not pursue
accelerated FDA review of the Opdivo/Yervoy combination for
newly-diagnosed lung cancer - putting Merck ahead in the
lucrative lung cancer market.
"All of the immunotherapies have similar price points," said
Miller at Express Scripts. "When you stack therapies, it means
more expense for patients and (health) plan sponsors."
(Editing by Edward Tobin)