Deals with Amgen and Sanofi/Regeneron enhance new pricing policies for specialty drugs
They are certainly not the first performance-based price contracts between a pharma manufacturer and a payer, but the just-announced arrangements Cigna has struck for Amgen’s and Sanofi/Regeneron’s PCSK9 anti-cholesterol drugs (Repatha and Praluent, respectively) are a key milestone in the ongoing debate over the costs of high-priced specialty drugs. PCSK9 (it stands for “Proprotein convertase subtilisin/kexin type 9,” an enzyme; the monoclonal antibody drugs block the enzyme, resulting in lower cholesterol levels) set off alarm bells among payers when they were approved last year because, if prescribed widely to high-cholesterol patients, the cost to payers would be in the billions annually. Another indicator of the potential value of these drugs was that Sanofi/Regeneron paid $250 million for an accelerated-approval voucher, just to come onto the market a couple months before Amgen.
Cigna says that it is the first to obtain value-based agreements for both of the drugs, and while the contracts are independent of each other, they “share the same overall objective: If Cigna's customers aren’t able to reduce their LDL-C levels at least as well as what was experienced in clinical trials, the two pharmaceutical companies will further discount the cost of the drugs. If the drugs meet or exceed expected LDL-C reduction, the original negotiated price remains in place.”
Such agreements have shown up before (most recently with Novartis’ heart-disease drug Entresto [sacubitril/valsartan]); and Cigna notes that it has comparable agreements in place for various drugs in heart failure, diabetes, multiple sclerosis, and hepatitis C. While the arrangement is a logical one, administering it is a challenge: Both Cigna and drug manufacturers will need to closely track outcomes of patients—and that presents a challenge to conventional healthcare practices, which are to prescribe a drug and check occasionally, if ever, that the drug is being used and is effective. Since the drugs are usually a form of chronic care, that monitoring and reporting itself can be a lifetime responsibility for prescribers, patients and payers.
Both drugs are sold as prefilled pens, meant to be self-administered every couple weeks. And that presents its own challenges: getting patients to stay on therapy, getting them to overcome resistance to self-injection, and proper administration. The fact that both drugs are temperature-controlled biologics (requiring refrigerated storage, as well as warming prior to administration) also puts a challenge on distributors, pharmacies and the patients themselves to properly store the drugs.
A more straightforward negotiating stance, used by some pharmacy benefit managers and payers, is simply to put one drug or another on a preferred-formulary list; if you’re a patient with that insurer, that’s your primary option to avoid a higher copay. In the just-released EMD Serono Specialty Digest, a poll of managed care providers indicated that 50% of plans intended to restrict PCSK9 reimbursement to patients with identified familial hypercholesterolemia or heart disease; and 14% of plans designated a preferred drug.
“Pharmaceutical advances hold great promise for improving the health of Cigna’s customers, and outcomes-based agreements help ensure that this promise is delivered,” said Christopher Bradbury, SVP, integrated clinical and specialty drug solutions for Cigna Pharmacy Management, in a statement. “Innovating through the contracting approach is one way we are helping our customers and clients receive more value for their health care dollar.” Cigna also noted that it will be providing customers with “extensive clinical and health coaching support across their pharmacy, medical, behavioral and disability benefits.”