Regeneron and Sanofi Plan to Cut Cholesterol Drug Price in Exchange for Wider Coverage
March 10 2018 - 6:15PM
Dow Jones News
By Joseph Walker
The makers of an expensive cholesterol-lowering drug plan to
offer discounts of up to 69% in exchange for insurers and
pharmacy-benefit managers expanding their coverage of the medicine
to more patients.
Regeneron Pharmaceuticals Inc. and Sanofi SA said they will seek
to renegotiate their contracts with insurers by offering rebates
and discounts for the drug, called Praluent, that would bring its
U.S. net price within a range of $4,500 to $8,000 annually per
patient, down from its list price of $14,600.
The net price range is based on a cost-effectiveness analysis by
an independent nonprofit group called the Institute for Clinical
and Economic Review. The group's analysis incorporated new clinical
trial data released on Saturday showing that Praluent reduced a
patient's risk of dying by 15% compared with placebo in a large
trial of patients whose cholesterol exceeded medical guidelines
despite already taking the standard treatment of statin drugs.
Regeneron and Sanofi's offer of a steep price cut reflects the
intensifying pricing pressures that some drugmakers face. Insurers
have placed significant restrictions on paying for Praluent because
of its price, such as requiring patients to have tried alternative
treatments and having doctors submit voluminous paperwork proving
their patients need the drug. The result is that the vast majority
of patients prescribed the drug don't actually fill their
prescription, says Regeneron CEO Leonard Schleifer.
ICER's analysis "represents a good faith assessment of
[Praluent's] value to patients," Dr. Schleifer said in an
interview. "Enough is enough. We're willing to work in their
[price] range, providing that payers agree to reduce their
burdensome barriers for patients."
When Praluent was first launched in 2015, it was the first of a
new type of a cholesterol-lowering drug that block a protein called
PCSK9. Analysts and investors expected drugs in the class, which
also includes Amgen Inc.'s Repatha, to quickly become blockbuster
products with $1 billion or greater in annual sales.
Instead, the drugs turned out to be a commercial disappointment
after pharmacy benefit-managers, which negotiate discounts from
drugmakers and decide which medicines to cover, clamped down on who
could receive the drugs. According to an Amgen study, just 35% of
patients prescribed a PCSK9 drug had the prescription approved by
their insurers.
Regeneron and Sanofi's Praluent had U.S. sales of $131.4 million
last year; Amgen's Repatha had U.S. sales of $225 million.
The exact discount that insurers receive will depend on how much
they relax restrictions on who gets the drug, Dr. Schleifer said.
The companies are specifically asking that insurers loosen
restrictions only for patients at the highest risk of death --
those who have had a heart attack or other serious coronary event
in the past year, and whose cholesterol levels exceed the threshold
recommended by doctors despite taking statins.
The risk of death to those high-risk patients was cut by 29% in
the clinical trial presented on Saturday at the annual scientific
meeting of the American College of Cardiology. The trial is the
first to show a statistically significant reduction in deaths by a
PCSK9 drug, compared to placebo.
Regeneron and Sanofi shared the new data with ICER in advance of
the Saturday presentation. The group found that a net price of
$4,500 to $8,000 per year would be cost-effective if the drugs were
used only by the subgroup of patients whose risk of death was
reduced by 29%. If the drugs were used more broadly to treat all
patients included in the trial, the cost-effective price would be
in a range of $2,300 to $3,400 annually, ICER said.
Regeneron and Sanofi's move to adopt ICER's recommended price
range reflects the growing scrutiny of drug costs, and calls for
pharmaceutical companies to price their products according to their
value to patients, rather than what the market will bear, ICER
President Steven D. Pearson said in an interview. "This never would
have happened three, four years ago," Mr. Pearson said.
Whether other companies also adopt ICER's recommendations will
depend on whether it moves the needle for Praluent sales, he said.
"The conversation that needs to happen is, can value-based pricing
be successful in the marketplace. They have to show this is a
successful business model."
It's unclear if the discounts will be enough for
pharmacy-benefit managers. Express Scripts Holding Co., one of the
largest PBMs, is "anxious to see the new data and re-examine our
criteria to see if they're still relevant," said Steve Miller, the
company's chief medical officer.
Write to Joseph Walker at joseph.walker@wsj.com
(END) Dow Jones Newswires
March 10, 2018 18:00 ET (23:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
Sanofi (NASDAQ:SNY)
Historical Stock Chart
From Apr 2024 to May 2024
Sanofi (NASDAQ:SNY)
Historical Stock Chart
From May 2023 to May 2024