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Drugstores push for access to secret PBM pricing-and-reimbursement info

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Mar 282013

Transparency may be a trendy topic in pharma these days. But while drugmakers have been opening their files on financial relationships with doctors–even edging toward sharing trial data–they haven't said much about proprietary pricing info. Discounts and rebates tend to be closely guarded. Now, state legislators might force some pricing information into the open. As The Wall Street Journal reports, drugstores are lobbying for legislation that would force pharmacy benefits managers to share their reimbursement rates. That way, independent stores would know how much their rivals are getting for each drug–and could help them negotiate better pricing deals. It's one more consequence of the patent cliff . With big drugs falling off patent, generics are accounting for a growing share of prescription revenue, and drugstores' profit margins on generic drugs are much smaller than those on branded meds. Big pharmacy chains have more power to negotiate favorable prices, but even they are suffering from the margin squeeze. Drugstores argue that PBMs are maintaining their own margins while cutting reimbursements for pharmacies. As the WSJ notes, PBMs deny that they're keeping a disproportionate share of drug profits. They say the laws would give pharmacies the opportunity to collude on pricing. Not surprisingly, they are fighting the disclosure bills. This isn't pharma's own pricing data, of course. Drugmakers have to report wholesale pricing information to Medicare and Medicaid , because the government programs' reimbursement rates are based on the averages. But other pricing arrangements–with hospitals, wholesalers, and the like–are proprietary. The PBMs argue that opening access to pricing data could have unintended consequences. The info could inspire shifts to branded drugs, for instance. And drugstores themselves say they might steer away from money-losing drugs, which could restrict access to cheaper meds. – read the WSJ piece Related Articles: Disclosure trend hits PBM-drugmaker deals Pfizer's Lipitor survival strategy under attack More generics, more frugal clients for Medco GSK ups the ante for trial transparency

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Drugstores push for access to secret PBM pricing-and-reimbursement info

Genzyme's $176K Kynamro price undercuts its $250K-plus rival

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Jan 312013

Kynamro treats a rare and dangerous form of high cholesterol.–Courtesy of NIH Sanofi's ( $SNY ) Genzyme unit has set the price on its new rare-disease drug Kynamro: $176,000. That's steep, but it's part and parcel the super-niche-market strategy that's Big Pharma's new bread and butter. Targeted cancer drugs, orphan drugs, ultra-orphan drugs–they come with prices big, bigger and biggest. But Kynamro, for homozygous familial hypercholeseterolemia, illustrates a couple of pitfalls on the rare-disease path. It's expensive, but not as expensive as its only competitor, approved just last month. That Aegerion Pharmaceuticals ( $AEGR ) treatment, Juxtapid, runs $235,000 to $295,000 a year, depending on the patient, The Wall Street Journal reports. Whether Kynamro can compete with Juxtapid on price remains to be seen–there are other differences between the two drugs, obviously, including side-effects profiles. When patients suffer from life-threatening, rare diseases, insurers have a hard time saying no. But the Sanofi drug's discount is one more variable for the treatment-choice equation. Payers are never eager to spend extra if they don't have to. And as Sanofi's recent experience with oncologist pushback on its Zaltrap price shows, doctors are considering price tags these days, too. With more and more drugmakers piling into niche markets, companies will be under more and more pressure to prove their drugs are superior to their rivals and worth whatever price they choose to set. They'll also be under pressure to perform on the marketing-and-customer-service side. As The Street 's interview with Aegerion CEO Marc Beer shows, rare-disease drugs are hands-on products. Unlike mass-market drugs, they don't launch and then take on a life of their own, with some DTC support and pharma rep detailing to keep things fresh. With rare-disease drugs, every patient is shepherded through the reimbursement process. Many patients get assistance, whether from the company or from patient groups. And patient relationships are managed as therapy continues. Genzyme knows this process well. It's been working with patients who use its rare-disease drugs Fabrazyme , Cerezyme and Myozyme for years. And it hasn't been easy; when the company's manufacturing foundered and supplies constricted, Genzyme had to contend with rationing, dose restrictions and plenty of unhappy patients. So, Aegerion–actually, any company learning the rare-disease marketing ropes–needs to build an effective marketing and customer support machine. Fewer people might be necessary. But those few will have to know their stuff. – read the WSJ piece (sub. req.) – get more from The New York Times (sub. req.) – see The Street 's interview Related Articles: FDA hands Sanofi, Isis an approval for HoFH drug Kynamro FDA approves Aegerion's lomitapide for rare cases of HoFH EMA committee shoots down Sanofi's cholesterol drug mipomersen Genzyme's mipomersen wins key FDA panel vote for rare cases of HoFH FDA frets over safety of Genzyme's rival drug for rare cholesterol disease

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Genzyme’s $176K Kynamro price undercuts its $250K-plus rival

Pharma wheels and deals in Europe as austerity wears on

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Oct 242012

No question about it, Europe has become the slough of despond for drugmakers aiming to preserve their margins. But sometimes, desperation spawns creative solutions. With austerity putting the squeeze on prices all over the continent, drugmakers are turning to the sort of discounts and money-back offers we associate with end-of-season clearance sales. As the Economic Times reports, Big Pharma and its smaller brethren are striking deals with government payers: 50% discounts; buy some, get some free; money-back guarantees; and the like. It's not entirely new; companies such as Johnson & Johnson ( $JNJ ), Novartis ( $NVS ), and GlaxoSmithKline ( $GSK ) have negotiated pay-for-performance and risk-sharing deals with cost-effectiveness watchdogs in the U.K. and Germany, for instance. But experts tell the Times that the practice is growing, partly to avoid a reference-pricing cascade around the continent. “It is spreading pretty quickly,” Patrick Flochel, global pharmaceuticals leader at Ernst & Young, told the Indian paper. “There is a big push everywhere with healthcare reforms.” If drugmakers cut list prices publicly, then other countries that peg their own prices to those elsewhere will slash their reimbursement rates. Pay-for-performance deals and creative discounts don't have the same effect, for two reasons. One, their details aren't often made public. Two, even when details are known, it's tough to put a figure on the actual cost, particularly with money-back guarantees and results-based pricing. “Global companies do not want their list prices to drop because that will have a knock-on effect as different countries increasingly reference each other over drug prices,” Brian Godman, a researcher at Sweden's Karolinska Institute, told the Times . “The only way round that is for companies to enter into some form of arrangement with the authorities.” – see the Times piece Related Articles: CEO: Roche would consider more money-back deals GSK pitches Votrient rebate if trial favors Sutent Bayer's better Nexavar offer not NICE enough U.K. accepts J&J's money-back guarantee ?

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Pharma wheels and deals in Europe as austerity wears on

Roche overlooks 80,000 adverse reaction complaints

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Jun 212012

Regulators visiting a Roche ( $RHHBY ) facility in the U.K. found a surprise lurking in the company's computer system: 80,000 uninvestigated adverse reaction reports from the U.S. The reports are on a hodgepodge of drugs made by the Swiss company and include more than 15,000 reports of deaths, with some of the notices dating back 5 years. In a statement meant to reassure anyone taking a Roche drug, the European Medicines Agency says there is no evidence of any negative effect on patients, yet, and that no action is needed to be taken by doctors or patients. Roche is the world's largest maker of cancer drugs. The FDA tells The Wall Street Journal that it?is working with the EMA to assess the impact. In a mea culpa statement provided to Pharmalot , the company acknowledged the colossal oversight, said it understands how the news might worry consumers, and said it was working to address the mistake. It said some of the reports can be traced to a Genentech “Patient Reimbursement Program in the U.S., which were not sent to the safety department for full evaluation, hence were not reported to the health authorities according to the applicable regulation.” The EMA discovered the problem in May during a “routine inspection of safety reporting systems.” It has given Roche until June 27 to come up with a plan on how it will investigate each of the 80,000 reports as well as how it intends?to avoid such problems in the future. The EMA says the reports were collected through the Roche-sponsored patient support program (PSP) that provides financial help to patients who can't afford lifesaving drugs. Reuters says the reports date back to 1997. Patients or doctors often report problems encountered when a drug is being taken. It is then up to the companies to vet those and notify authorities if there is anything about the reaction that is potentially of concern. The agency said it did not know how many of the reports might have been made directly to health authorities. The EMA says the 80,000 or so cases tied to the PSP were not the only adverse reaction complaints that went unreported by Roche. It says it also discovered another 23,000 unrelated reports in their reporting system and about 600 tied to clinical trials. – here's the EMA statement – and the Wall Street Journal story – read the Reuters ? story Related Articles: EMA to probe 'deficiencies' in Roche's drug-safety reporting Who'll be the biggest drugmaker of them all? Missed forecast by Roche leads to Boniva shortage EMA says no bacteria threat to Roche's MabThera

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Roche overlooks 80,000 adverse reaction complaints

German gatekeepers nix GSK's lupus drug Benlysta

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May 032012

GlaxoSmithKline's ( $GSK )? Benlysta can't catch a break from European gatekeepers. First, the U.K.'s cost-effectiveness watchdog rejected the lupus treatment, despite a discount scheme. Now, Germany's new, tougher reimbursement regime has given Benlysta another thumbs-down. Benlysta is the first new treatment for lupus in 50 years, and it was approved to great fanfare last year. Lupus patients and advocacy groups had been anticipating the launch. Nevertheless, the drug has been slow to take off, sales-wise, and negative rulings from the National Institute for Health and Clinical Excellence, and now the German Institute for Quality and Efficiency in Health Care, certainly won't help matters. Glaxo greeted NICE's final “No” with strong criticism, not just of the Benlysta decision, but of NICE's record at adopting new drugs in general. The company's U.K. chief, Simon Jose, said at the time that NICE shouldn't have compared Benlysta to cheap, off-patent drugs, because it ended up skewing the results and failed “to recognize the benefit of this clinically proven medicine.” Patient groups weren't happy either; there's a petition drive underway, and plenty of Benlysta-sympathetic media coverage. And now, GSK says it's befuddled by IQWiG's draft decision on Benlysta. The agency said the drug did not offer “therapeutically significant additional benefit” for any patient groups, compared with older treatments. That decision could mean a large, forced discount to Benlysta's price on the German market. The agency's announcement was “completely inexplicable form a medical point of view and disregards genuine progress in therapy,” the company said (as quoted by Reuters ). – see the Reuters news Related Articles: HGS snubs $2.6B buyout offer from Benlysta partner GSK HGS to ax 150 as Benlysta sales continue to disappoint The trials and tribulations of drug launches

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German gatekeepers nix GSK’s lupus drug Benlysta

European regulators take steps to speed pricing, reimbursement decisions

Pharma Industry Business News No Responses »

Mar 022012

The European Commission is taking steps?to speed up national drug pricing and reimbursement decisions. Under a new proposal, such decisions should be made within 120 days for innovative medicines and 30 days for generic drugs. Currently, the time limit for both is?180 days. In addition, delays in pricing and reimbursement decisions can be up to 700 days for innovative medicines and up to 250 days for generics, according to studies. As the EC notes in a statement, the complexity of trying to price?medicinal products has increased since 1989, when the transparency directive for pharmaceutical products was adopted. It is hoped the new proposal will help make pricing more transparent. Many have complained?that local drugmakers are sometimes favored and of a general lack of clarity in terms of government pricing decisions, Pharmalot notes. Regulators herald the new approach as more cost-effective–something cash-strapped European governments should like. “Our proposal will lead to substantial savings for public health budgets, for example by allowing earlier market entry of generic products,”?says EC Vice President Antonio Tajani?in a statement. “It also creates a more predictable environment with greater transparency for pharmaceutical companies, thus improving their competitiveness.” And there will be consequences for those countries that don't comply, the EC warns, including financial penalties and damages awarded to the applicant. Representatives from the EU generic community were swift to react to the news. “…[G]eneric medicines and biosimilars are major contributors to the sustainability of European healthcare systems, providing over 150,000 jobs and bringing savings of more than [€35B] per year, while increasing patient access to affordable treatments,” explains European Generic Medicines Association?Director Greg Perry in a statement. He adds that the proposals show the EC recognizes this. – read the EC's statement – check out the release from the EGA – see more from Pharmalot Related Articles: A bright side to Europe's woes: U.S., Japan look better European crisis crimps pharma's finance

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European regulators take steps to speed pricing, reimbursement decisions

Germany smiles on AZ's Brilique

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Dec 152011

German authorities have given AstraZeneca ( $AZN )?a boost by?issuing their final positive recommendation?for the company’s heart drug Brilique , which is known as Brilinta in the U.S.?It’s the first med to be evaluated under the new German drug pricing?system, as Reuters notes. The Federal Joint Committee (G-BA) determined the med offered an “important additional benefit” for non ST-elevation myocardial infarction and unstable angina. The word “additional” is key, as the new pricing system will automatically knock drugs without it into a lower pricing tier. The committee works by issuing directives for the benefit catalogue of the statutory health insurance funds, specifying the?services that are reimbursed by the funds. The assessment came slightly earlier than expected and is good news to the company, which is looking to?Brilique/Brilinta to help replace revenues lost to generic erosion. The drug, a rival of Sanofi ( $SNY ) and Bristol-Myers?Squibb’s ( $BMY )?Plavix,?was?licensed in Europe last December, but?AstraZeneca must wait for decisions in individual nations, as Reuters notes.?? Whether this bodes well for other drugs awaiting assessment remains to be seen. Many drugmakers have criticized the nation for its new pharma rules, including Eli Lilly ( $LLY ) CEO John Lechleiter ( photo ). “In no other place in the world has the environment for innovative pharmaceuticals changed more in the last 12 months than it has in Germany,” he said over the summer , adding that the new rules will jeopardize innovation. – get AstraZeneca’s release – see the statement from the G-BA (in German) – check out the Reuters report Related Articles: AZ’s Brilique rated highly in inaugural German assessment Lilly chief scolds Germany for new pharma rules German lawmakers pass $2.76B drug-price reforms

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Medicare to pay docs for Provenge infusion costs

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Nov 222011

Dendreon ( $DNDN )?got some welcome news from U.S. health officials: Medicare and Medicaid will now pay for the cost of infusing its prostate cancer therapy Provenge . Previously, the government health programs had only expressly covered the cost of the drug itself. Dendreon said the Centers for Medicare and Medicaid Services’ new coverage policy will allow the cost of administering Provenge to be billed separately from the cost of the drug, as Reuters reports. Doctors typically are paid an average of $125 per infusion, the news service notes. The change will be retroactive to Jun. 30, Dendreon says, and typical waiting time for reimbursement on the drug is now 30 days. The infusion fee isn’t much, compared with Provenge’s $90,000-plus cost, but every little bit helps when you’re trying to persuade cash-flow-conscious physicians to use your product. Provenge sales haven’t taken off as Dendreon had hoped–or investors had expected–partly because of doctors’ uncertainty about reimbursement. The company pulled its sales forecast on the drug in August, sending its stock reeling, and has since dialed back its growth expectations for the next several quarters. “Today’s announcement provides additional comfort to physicians concerned about Provenge reimbursement,” ISI Group analyst Mark Schoenebaum said in an investor note (as quoted by Reuters ). But the CMS coverage guidelines don’t address another obstacle: The patient’s share of the cost. – get the Dendreon release – read the Reuters news – check out The Wall Street Journal story Related Articles: Dendreon beaten down again on so-so Provenge sales update Dendreon cuts 500 jobs in Provenge retrenchment Docs blame reimbursement, complexity, cost-benefit for Provenge uptake Payers expect Provenge sales to stay flat

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Medicare to pay docs for Provenge infusion costs

Sanofi sees profits hit in Q3, but strength in diabetes meds

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Nov 032011

Sanofi ( $SNY ) reported its third quarter results today, and the pharma titan saw its profits slide to 3% versus the same period last year?to just under €2.4 billion ($3.3 billion). Although the company saw good results with its diabetes franchise, sales of Taxotere fell 64.8% due to generic erosion. Another key drug, Lovenox, saw sales dip as well because of generic competition. The drugmaker did see total sales grow?to roughly €8.75 billion, or just under $12.1 billion. And echoing a theme seen with other drugmakers, emerging markets helped bolster the company. Sales in emerging markets were €2.6 billion ($3.6 billion), an increase of 6.8%. In BRIC countries alone, sales were up 20.2%. Sales of diabetes drugs served to help the company, as they increased 12.4%.?Lantus in particular did well, with sales increasing 14.6% in the U.S. to €580 million ($800.7 million). The drug was big in Japan, China and other emerging markets. In China alone, the company saw a doubling in sales due to?its recent?inclusion on the reimbursement schemes in Shanghai and Beijing. Although news with diabetes drugs was good, Sanofi did see a big drop?in Taxotere sales–down 64.8% to about $257 million. Lovenox sales fell 12.7% to about $682.6 million in sales. Sanofi did see an impact on its?Merial animal health?sales during the quarter. They?were roughly $646 million, a decrease of 5.2% reflecting the temporary generic competition of Frontline Plus in the U.S. However, the U.S. District Court for the Middle District of Georgia ruled in favor of Merial over the summer, holding that sales of PetArmor Plus products infringed?the company’s?patent and barred Cipla and Velcera from making or selling those products in the U.S. The generic products already sold to retailers were not recalled and may still be available in the distribution channels, however. Still, CEO Chris Viehbacher ( photo ) was positive. “The return to growth in sales and earnings in the third quarter reflects an important milestone as the company progressively puts the patent cliff behind it,” he said in a statement. “The integration of Genzyme is progressing well. Our growth platforms again achieved double digit growth and more than compensated for generic erosion. We continue to make strong progress in R&D with the submission of five new products and also in the tight control of our costs.” Reflecting this optimism, the company also said it would seek opportunities for mergers and acquistions, as Reuters notes.?”We will continue to search for bolt-on acquisition around the world,” Viehbacher told reporters during a conference call, as quoted by the news service. “Sanofi is in the midst of its patent cliff,” wrote Jack Scannell and other analysts at Sanford C. Bernstein in a note, as quoted by Bloomberg . It was a “solid, quiet quarter.” However, still facing generic competition and other business challenges, Sanofi?this week? disclosed it will close a research building in Bridgewater, NJ,?as part of a consolidation of its U.S. operations. In addition, it will scale back its U.S. sales force and consolidate administrative services into a single Bridgewater office, the Star-Ledger reports. A company spokesman said it was too early to predict how the drugmaker’s NJ workforce will be impacted. The company will move drug discovery and early development to a hub in Boston, where Genzyme is located. The Bridgewater research building is slated to be shuttered by the end of 2012. – read Sanofi’s release – see the Reuters story – here’s Bloomberg ‘s take – check out more from the Star-Ledger Related Articles: Sanofi plans hundreds more U.S. job cuts in sales, R&D Sanofi restructures U.S. R&D ops, shifts programs to Boston Generics hit Sanofi’s Q4 pharma sales

Dendreon nixes Provenge supply deal with GSK

Pharma Industry Business News No Responses »

Sep 062011

The disclosure: Dendreon ( $DNDN )?has canceled its Provenge supply contract with GlaxoSmithKline ( $GSK ), which had been set to run through 2015. The reason, cited in SEC documents: “Unforeseen delays and implementation difficulties in achieving the commercial purpose of the agreement.” The timing: Dendreon gave 60 days’ notice to GSK on Sept. 1, a few weeks after it announced Provenge wasn’t selling at nearly the rate it had expected. At the time, the company slashed its 2011 sales forecast and announced layoffs. And just two weeks ago, the company announced its third Provenge production facility had won FDA approval. Perhaps the combination of lower-than-expected sales and increased manufacturing capacity–not to mention a heightened focus on reining in costs–made paying GSK to make the Provenge antigen less than economical. Also, if manufacturing hadn’t yet begun, as Dendreon disclosed, then taking the trouble to ramp up may not have seemed worth the effort, at least not under the circumstances. Since Dendreon withdrew its revenue forecast for Provenge, there have been hints that sales of the prostate cancer vaccine might continue to languish, rather than accelerating into high gear as the company had expected. A Reimbursement Intelligence survey of payers found the drug’s complex administration was inhibiting uptake. Oncologists and urologists surveyed by Sermo said they were concerned about the drug’s $93,000 cost, given the survival data in clinical trials. And R.W. Baird last week cited a survey, performed by ICI OncoReports, that found some doctors are using Johnson & Johnson’s ( $JNJ )?new pill Zytiga in patients who might otherwise have qualified for Provenge. – see the SEC filing – read the Seattle Times story – get more from Forbes Related Articles: Docs blame reimbursement, complexity, cost-benefit for Provenge uptake Discouraged by Dendreon, investors shy from drug launches Surprise Provenge shortfall triggers Dendreon layoffs

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MSL WORLD BLOG

Drugstores push for access to secret PBM pricing-and-reimbursement info

Genzyme's $176K Kynamro price undercuts its $250K-plus rival

Pharma wheels and deals in Europe as austerity wears on

Roche overlooks 80,000 adverse reaction complaints

German gatekeepers nix GSK's lupus drug Benlysta

European regulators take steps to speed pricing, reimbursement decisions

Germany smiles on AZ's Brilique

Medicare to pay docs for Provenge infusion costs

Sanofi sees profits hit in Q3, but strength in diabetes meds

Dendreon nixes Provenge supply deal with GSK

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