Embracing the “Trial and Error” approach in drug discovery
March 13, 2014
The price and the cost of the most expensive drug ever – a debate based on speculation and lack of transparency
March 19, 2014
By Marija (Masha) Zecevic
A piece in the latest issue of BioCentury tackles the pricing and reimbursement challenges faced by Soliris® as it emerges from the most recent negotiations between UK’s NICE and Alexion Pharmaceuticals. As of today, Soliris is the most expensive drug…ever! The treatment costs over $500.000 per patient per year.
The articles “Slippery Slope” and “Don’t Go There” are charged and gripping. It is however impossible, at least to me, to take sides partly because I can easily understand the arguments brought by both players sitting at the negotiation table but mostly because I simply lack the information to make an informed opinion.
Earlier this month at BioEurope Spring in Turin, Jeremy Springhorn, Vice President Corporate Development at Alexion, talked in some detail about eculizumab’s clinical path. In the early days of development, Alexion explored potential therapeutic applications in large and lucrative indications such as psoriasis and rheumatoid arthritis. The antibody has been in clinical development since 1996 but it failed in 5 clinical trials before demonstrating the efficacy signal in paroxysmal nocturnal hemoglobinuria (PNH). Once the right indication was identified, the clinical development picked up pace and Soliris was approved in 2007 by the FDA. Second indication to gain approval was atypical hemolytic uremic syndrome (aHUS), an ultra-rare genetic disease that leads to kidney failure, damage to other vital organs and premature death.
As of today, according to Springhorn, Alexion has spent probably over $1bn to get the drug approved in the first indication.
It appears that NICE is asking Alexion to justify the high price requested for the second indication by providing information on development costs. This is contrary to the accepted drug valuation methods that attribute the reimbursement and the pricing rate based on drug’s value rather than the cost required to bring it to the market.
Experts speculate that what is worrying NICE is not so much the price of Soliris in that first and possibly second indication but rather the overall impact on the NHS budget once the drug gains approval in other diseases, some of which are classified as “ultra-rare” and can thus dictate high price. In the long run, it will not be sustainable for UK’s NHS to maintain high pricing for multiple indications.
According to BioCentury “Based on the acquisition price and an estimate of 170 aHUS patients (in UK), the evidence review group analysis estimates the first year budget impact would be $96.6 million. With an incidence of 20-30 new patients per year in England, the budget impact would grow to $137 million after five years.
We are all waiting to see what the outcome of the negotiations between Alexion and NICE will be. Unfortunately though, I imagine that we will see only part of the deal that will be struck.
The most annoying elements in this story are not potentially scandalous prospects of patients being left without access to the much needed treatment or the company making indecent profit at the expense of a larger society.
What is truly disturbing is the lack of transparency.
BioCentury quotes “multiple industry sources” in its piece, yet only a life-science attorney, a lobbyist and a company representative are named. All other fall in the category of “the industry representative who did not want to be named”. Alexion also is not sharing much in terms of its negotiation strategy going forward.
On the payor’s side it does not look any better. BioCentury reports that “since the beginning of 2012, NICE has recommended the use of 44 drugs on the NHS. Of those recommended, 19 (43%) included an undisclosed discount via a patient access scheme. About half the time, the patient access deals have been hammered out [...]”
Until we have the facts, there is really only so much useful commentary any of us can provide. And knowing that we’ll never have all the facts, we better just limit our role to that of mere spectators.
About Soliris: Eculizumab (Soliris) is a humanized monoclonal antibody that is a first-in-class terminal complement inhibitor and the first therapy approved for the treatment of paroxysmal nocturnal hemoglobinuria (PNH). PNH is a rare, progressive, and sometimes life-threatening disease characterized by excessive destruction of red blood cells. Soliris gained approval also for the treatment of atypical hemolytic uremic syndrome (aHUS), an ultra-rare genetic disease that causes abnormal blood clots to form in small blood vessels throughout the body, leading to kidney failure, damage to other vital organs and premature death.