Express Scripts targets new migraine
drugs to change U.S. pricing dynamic
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[April 24, 2018]
By Deena Beasley
LOS ANGELES (Reuters) - The largest U.S.
manager of prescription benefits is telling drugmakers that the current
pricing model is broken, and taking aim at Amgen Inc and other makers of
new migraine medicines to try and fix it.
Express Scripts told Reuters it is pressing them to forego the usual
strategy of setting a high U.S. list price, then lowering the cost for
health plans through hefty rebates. It is also seeking a refund if the
drugs don't work within a defined timeframe. The shift could help
Express Scripts and other pharmacy benefits managers (PBMs) bring prices
down, and deflect growing criticism of their role as "middlemen" in the
drug supply chain.
The Trump administration and members of Congress have demanded that PBMs
pass on more of the rebates they receive to consumers outraged over
rising costs at the pharmacy counter. Many Americans now have health
plans with higher deductibles or co-payments, making them responsible
for more of their medical costs.
Express Scripts is advising drugmakers to take that shift into account
as they launch a new class of migraine drugs.
"If your expectation is that you are not going to actually get that high
list price, then don't do that to patients who have high co-pays," Chief
Medical Officer Steve Miller said in an interview, describing his
message to Amgen and its rivals. "Let's be more balanced. Let's get back
to where gross-to-net is not so different." Amgen's Aimovig is expected
to be approved next month, followed by similar drugs from Teva
Pharmaceutical Industries Ltd and Eli Lilly & Co that the companies say
could benefit up to 4 million people in the United States.
The injected therapies interfere with the function of a molecule
involved in the processes that kick off a migraine, such as dilation of
blood vessels in the brain.
Wall Street analysts expect Amgen to announce a list price of up to
$10,000 per year for Aimovig once it is approved, setting the tone for
But Express Scripts and other PBMs restrict access to new drugs they
deem too expensive, asking doctors to provide detailed evidence of why a
specific patient may benefit, requiring the use of other drugs for a
period of time or favoring cheaper rivals when available.
Drugmakers could face similar issues with the new migraine treatments,
Miller said: "Should they price these things too high they will probably
not be able to achieve much market share."
Express Scripts is also pushing Amgen and its peers to refund two-thirds
of the cost of a migraine drug if a patient stops treatment within 90
days because it didn't work or caused major side effects.
Such guarantees are becoming more prevalent for older drugs with
competing products on the market, including diabetes and hepatitis C
therapies. It would be unusual to introduce them for the first drug in
an entirely new class of therapy. Amgen, which will market Aimovig in
partnership with Novartis, declined to comment on talks with Express
Scripts. Research chief Sean Harper said in a recent interview that
payers share blame for the current pricing model.
Their demands for ever-larger rebates has forced manufacturers to use
higher list prices as a benchmark, he said.
"It is a ridiculous situation that we are in," Harper said. "No one is
paying the list price, but patients are exposed for a period of time"
until they pay off their insurance deductible.
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An Amgen sign is seen at the company's office in South San
Francisco, California, U.S., October 21, 2013. REUTERS/Robert
TAKING OUT COSTS
Rising U.S. healthcare costs, the most expensive worldwide, are
straining budgets for families, employers and government agencies.
That has created new pressures within the industry to control costs.
To that end, Express Scripts has agreed to a buyout from health
insurer Cigna Corp, while PBM rival CVS Health Corp plans to buy
insurer Aetna Inc .
In interviews with Reuters, smaller PBM Abarca Health and insurer
Highmark Health said they were adopting similar tactics to Express
Scripts in negotiating coverage for the migraine drugs. CVS declined
Teva said it was evaluating the pricing environment for its migraine
drug. Officials at Lilly did not respond to a request for comment.
The stakes are high for Amgen, which has struggled to grow revenue
in recent years.
The biotech company's last potential blockbuster, high-priced
cholesterol treatment Repatha, has been stymied by PBMs who
questioned its value compared to generic statins that cost $100 per
Repatha and rival Praluent, sold by Sanofi and Regeneron
Pharmaceuticals, launched in 2015 at list prices near $14,000 a year
and were expected to be billion-dollar products. But Express Scripts
and other payers have rejected most prescriptions written for the
new medicines while awaiting proof that they lower the risk of
As a result, Repatha sales totaled $319 million last year, while
Praluent had sales of $195 million.
"If Amgen and Sanofi had it to do over again, I think they would
have priced at half the list price and made a whole lot more money,"
said Jason Borschow, chief executive officer at Miami-based Abarca.
Aimovig is far more effective at preventing migraines than current
treatments, mainly low cost generic drugs. Recent studies have shown
that Aimovig reduces episodic migraines by at least half in around
50 percent of patients.
The Food and Drug Administration is expected to decide on Aimovig by
May 17. The agency's decision on Teva's treatment fremanezumab had
been expected in June, but that may be delayed due to manufacturing
issues. A ruling on Lilly's galcanezumab is expected later in the
Amgen will report quarterly results on Tuesday afternoon.
(Editing by Michele Gershberg and Edward Tobin)
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