Cost of New Cholesterol Drugs Unsustainable Says JAMA Study; Ensuing Debate Rages

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A new study from the University of California, San Francisco, using computer models of cardiovascular disease in American adults concludes that the price of a promising new class of cholesterol-lowering drugs called PCSK9 inhibitors would need to be reduced by up to 70 percent to be cost-effective in the United States using commonly accepted standards.

“If all eligible U.S. adults were put on PCSK9 inhibitors we’d face an unsustainable increase in healthcare spending,” said Dhruv Kazi, MD, assistant professor of medicine at UCSF and lead author of the new study, published online in the Aug. 16 issue of JAMA: The Journal of the American Medical Association.

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First approved by the U.S. Food and Drug Administration in 2015, PCSK9 inhibitors such as Sanofi SA (Paris) and Regeneron Pharmaceuticals Inc.’s (Tarrytown NY) alirocumab (Praluent) and Amgen Inc.’s (Thousand Oaks CA) evolocumab (Repatha), dramatically reduce levels of so-called “bad,” low-density lipoprotein (LDL) cholesterol–in clinical trials, levels of LDL were reduced by as much as 60 percent in patients taking these drugs.

These drugs pack a one-two punch when it comes to costs, Kazi said. Unlike cancer therapies, which can cost $100,000 a year or more but may be used by only a few thousand people, the new cholesterol drugs could be used by 9 million Americans ages 35 to 74, he said, as reported by UCSF News.

But these “wonder” drugs have downsides: they must be injected every two to four weeks, and have an annual cost of roughly $14,000 per patient. The model employed in the new UCSF research suggests that prescribing PCSK9 inhibitors to all eligible adults would increase U.S. drug spending by roughly $120 billion, or 38 percent, which would represent a 4 percent increase in overall healthcare spending, even after accounting for cost savings from prevented cardiovascular events.

And unlike the new drugs for hepatitis C, which cost $1,000 a pill but are used for 12 weeks, the new cholesterol drugs are meant to be taken for the rest of a person’s life, Kazi said.

Current treatments for cardiovascular disease–the leading cause of death in America–largely rely on drugs called statins. Statins work by lowering production of LDL cholesterol, which is a major contributor to cardiovascular disease. However, not all patients see adequate LDL reductions from statins alone, and some are unable to take them at all due to side effects including intense muscle pain.

PCSK9 inhibitors, which increase liver uptake of LDL, can be added to or used in place of statins for those who do not experience adequate reductions from statins alone. Although they are highly efficient in lowering blood LDL levels, and far more effective than statins alone, PCSK9 inhibitors cost nearly 18 times more than generic statins such as atorvastatin.

To determine the cost-effectiveness of the new drugs, researchers used the Cardiovascular Disease Policy Model, collaboratively developed by UCSF and other institutions, to simulate the cardiovascular health of all U.S. adults by drawing on demographic and health data from public records and other sources.

In this study, treatment costs were evaluated for two high-risk populations: those with a family history of high cholesterol and individuals with preexisting cardiovascular disease. The model determined how much it would cost to gain one year of life (known as a “life-year”), adjusted for health status, under three different scenarios.

In the first scenario, representing the status quo, only statins were prescribed; a second scenario included PCSK9 inhibitors where appropriate; and a final scenario involved a third cholesterol-lowering drug, Merck & Co.’s (Kenilworth NJ) ezetimibe (Zetia), which lowers levels of blood LDL by blocking its absorption in the small intestine.

While there is no nationally mandated cost threshold for drug treatments, consensus in the medical community suggests that treatments should cost roughly $100,000 per life-year gained or less, Kazi said. The PCSK9 inhibitor scenario of the model estimated it would cost $423,000 to gain one quality-adjusted life-year–well over the accepted threshold.

“PCSK9 inhibitors are not cost-effective at present. They would need to come down about 70 percent to meet that mark,” Kazi said.

The researchers point out that the model-suggested target price, just over $4,500, is much closer to the cost of PCSK9 inhibitors in Europe, where drug price negotiations with pharmaceutical companies are more common. According to the model, ezetimibe treatment comes in just above the threshold, at $155,000 per quality-adjusted life-year gained.

The model also shows, however, that considerable healthcare savings could be realized if statins were more consistently prescribed for patients who could benefit from them. Not all patients who should take statins currently do, for reasons ranging from inadequate medical follow-up to poor health literacy.

According to the model, prescribing statins, which cost around $810 annually, for these patients would prevent more than 200,000 major cardiovascular events, bringing savings of $12 billion over five years. T

his study is different than many other cost-effectiveness studies of drugs, said Kirsten Bibbins-Domingo, PhD, MD, professor of medicine and epidemiology and biostatistics and the study’s senior author. Drugs normally come to market at a price set by pharmaceutical companies, and cost-effectiveness isn’t examined until data is gathered after the release, but:

“our goal is to do the cost-effectiveness analysis in a timely fashion to ideally inform the discussion of prices of new therapeutics,” she said.

Both Drs. Kazi and Bibbins-Domingo stressed that, despite their high cost, PCSK9 inhibitors may be highly effective drugs:

“The reality is, millions of people may benefit from this drug, and that’s exactly why it will substantially strain the U.S. healthcare budget if its price tag stays so high,” Bibbins-Domingo said.

Steve’s Take: Let’s face it: The American healthcare system is by far the most costly in the world. Healthcare reform here has always been intended to lower costs, but they are still rising, though recently less steeply than in the past.

Moderation is not however the case in the area of specialty pharmacy, as noted last year in a piece appearing in Health Affairs Blog by William Shrank, MD, et al. The medications to treat Hepatitis C, he points out, are the most cited examples of a general inflationary trend, but the pipeline of expensive medications is extensive.

Yet, policymakers and payers appear unwilling to undertake significant cost controls on medication pricing. Indeed the controversy over the $84,000 price tag for Sovaldi (sofosbuvir) has largely faded, suggesting a certain resiliency in our system’s ability to absorb costs.

One doesn’t have to be a genius to agree with the JAMA study authors that resiliency is about to be challenged in a manner unlike we have ever seen in the past, at least in the area of these PCSK9 (proprotein convertase subtilisin/kexin 9) enzyme inhibitors to manage high cholesterol.

As pointed out by Tracy Staton in her right-on Aug. 17 piece for FiercePharma, payers who’ve balked at the new class of cholesterol drugs now have more justification thanks to the new JAMA study. In short, the new study concluded that Amgen, Sanofi and Regeneron would have to slash their prices by more than two-thirds to make them worth the cost.

This isn’t the first cost-effectiveness analysis to come up against the two drugs, either. But this study comes from the Journal of the American Medical Association, rather than a controversial U.S. analytics firm or a famously cost-conscious set of price watchdogs in England. It’s authored by academic researchers rather than payers with an obvious ax to grind. And its conclusions are strikingly similar to previous assessments.

UCSF researchers found that using the new PCSK9 meds, rather than Merck’s ezetimibe, another non-statin cholesterol fighter, would save $29 billion on care for cardiovascular complications over 5 years. But the annual cost of those drugs would run an estimated $120 billion. Both numbers assume that all eligible patients would use the drugs, based on their two FDA-approved indications.

“Reducing annual drug costs to $4,536 per patient or less would be needed for PCSK9 inhibitors to be cost-effective,” the study states.

Payers have been lobbing salvos at the PCSK9 drugs’ potential load to their budgets since before they were approved last year. CVS Health Corp. (Woonsocket RI) CMO Troyen Brennan co-authored a JAMA study suggesting that Praluent and Repatha would put a $150 billion burden on the U.S. healthcare system if all eligible patients took the injectable medicines.

The drugmakers have taken issue with those analyses, mostly for their assumptions that all eligible patients would be put on the drugs–an overly optimistic projection for drug sales. Payers’ prior authorization hurdles are already restricting uptake; up to three-fourths of patients are being turned away.

Plus, doctors have been reluctant to use the drugs broadly without proof that they prevent cardiovascular problems–proof that won’t be available until next year at the very earliest. And even when treatment guidelines unequivocally recommend a new drug, those recommendations tend to dribble into real-world practice rather than spread far and wide immediately. So far, both drugs have underperformed expectations.

A previous assessment by the Institute for Clinical and Economic Research (ICER), which has been soundly criticized by pharma companies for its methodology and its funding from payers, concluded that a 67% discount off list prices would be necessary to justify PCSK9 drugs.

Taking budget impact into account–which is what the JAMA study aimed to do–the prices would need to fall even further. At a health conference in May, Reuters said Regeneron CEO Len Schleifer criticized the ICER price analysis on the PCSK9 inhibitors, saying it simply wasn’t scientific and instead unilaterally deciding what the country’s health system could afford to pay.

“They did all the calculations and they said it’s X, which is okay. I could have lived with that,” Reuters quoted Schleifer as saying. “But…they said society can’t afford X, so we are going to say it’s one-third X. They had value-based pricing, but they just decided that, well, we can’t afford it. That wasn’t scientific. There was no intellectual honesty there.”

ICER COO Sarah Emond, who was on a panel with the Regeneron chief, took issue with Schleifer’s characterization, Reuters said, accusing him of attacking a group whose mission is to open “the black box of pricing.”

But Schleifer instead pointed to the “value-based” pricing contracts it recently announced with Cigna Corp. (Bloomfield CT) as an indicator of what can work with the new treatments.

Cigna wrangled deals on both Praluent, from Sanofi and Regeneron, and Repatha, from Amgen. Cigna wins bigger discounts on the PCSK9 inhibitors if they don’t achieve a clinical benefit for patients. Cigna’s deal represents a pathway to access for eligible patients while limiting its costs. Cigna will track patients who use Repatha or Praluent to see whether they achieve similar reductions in LDL cholesterol as patients in clinical trials did.

Steve's Take: value-based pricing contracts have potential to reduce drug costs Click To Tweet

If the drugs work as expected, then Cigna can hypothetically expect to save money on cardio complications down the road, giving the insurer a payoff on its drug investments. If not, then it collects a bigger discount as a sort of sweet solace.

And in the process, it will collect data on medical and pharmacy claims to study whether its PCSK9 patients are reaping cardio benefits. This strikes me as the best (for now) approach to curtailing wasted expenditures with these super-expensive medicines.

Our federal and state health agencies are taking note. HHS recently proposed a “new” bundled payment system for heart-attack care that sets a fixed overall treatment price for admitting a heart-attack patient, treating them with inpatient care, and following up with other services (e.g., rehab facility) for 90 days after their discharge. Care providers which manage to treat the entirety of a heart attack episode for less than the target price get to pocket the associated savings; the ones that don’t have to remit the difference back to Medicare.

There are a lot of very big numbers being tossed around in these studies and the reports about them. For quite a while now, those of us economic types who’ve been burned in the past know that numbers, taken as self-explanatory truths by the public and the press, can in fact be the woefully distorted products of a broken and/or manipulated accounting system.

Remember the $600 hammer from the Defense Department procurement scandals of the 1980s? For years that $600 hammer has been held up as an icon of Pentagon (and more broadly federal) incompetence.

One problem: “There never was a $600 hammer,” said Steven Kelman, Weatherhead Professor of Public Management at Harvard University’s John F. Kennedy School of Government and a former administrator of the Office of Federal Procurement Policy. It was, he has said, “an accounting artifact.”

Unfortunately, federal accounting at least, has been primarily concerned with making sure money was spent as Congress directed–not so much with making sure it was spent wisely.

Given the magnitude of the costs of these news cholesterol treatments, what say we task at least the federal actuaries with spending our money wisely. Perhaps employing something similar to the Cigna “value-based” approach with the drugs’ manufacturers; or the bundled payment approach HHS is proposing for heart attack care.

Anybody have a better one?

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