Now that the Food and Drug Administration has given the OK to two pricey drugs that treat high cholesterol, health insurers and pharmacy benefit managers are evaluating if one drug should receive preferred coverage over the other.
In exchange for the preferred designation, drugmakers offer price discounts on their products. A flurry of these types of deals occurred this year with high-cost hepatitis C drugs.
This week, the FDA approved Repatha, an injectable drug made by Amgen that lowers a person's “bad” cholesterol level. It can be used only for patients who have certain inherited conditions or a history of serious heart ailments. Estimates put that patient base at around 5 million to 10 million people. These types of cholesterol drugs are called PCSK9 inhibitors.
Repatha's approval came about a month after Praluent, another cholesterol drug in the same class. Sanofi and Regeneron Pharmaceuticals make Praluent, which costs $14,600 a year for a normal course of treatment. Repatha is slightly cheaper at $14,100 a year.
Observers view the cholesterol drugs as potential budget-busters for public and private insurers. The hepatitis C drugs that made it to the market last year created an industrywide stir with their lofty price tags. Gilead Sciences' Harvoni costs $94,500 for a 12-week treatment. But in most instances, hepatitis C patients are cured after treatment. High cholesterol has to be managed continuously, and PCSK9 inhibitors hypothetically could be used indefinitely.
The cholesterol drugs have a lower initial price compared with the hepatitis C drugs, but the costs could balloon over time. Many believe that's drug companies trying to gouge the marketplace. “With several game-changing medications in the pipeline, we need to address the underlying issue of how these prices are set from the start before they hit the market,” John Rother, president of the National Coalition on Health Care and leader of the Campaign for Sustainable Rx Pricing, said in a statement.
Several insurers and pharmacy management companies have indicated they will look at both cholesterol drugs soon to determine how they will fit on their formularies—and if discounts can be negotiated. The pharmacy and therapeutics committee at Express Scripts, one of the largest pharmacy benefit managers in the country, will review Praluent and Repatha in September.
“Any formulary announcements we may make—whether to cover one or both of these products—would come after this review,” Express Scripts Chief Medical Officer Dr. Steve Miller said in a blog post.
Aetna covers Praluent, but strict criteria apply. Aetna mandates preauthorization of the drug. Specifically, doctors must diagnose patients with the specified diseases. In addition, two high-dose, lower-cost statins must be tried before Praluent, a process known as step therapy. Aetna is conducting a clinical review of both drugs now, a spokeswoman said.
An Anthem spokeswoman said Repatha has not yet gone through its review process but will in the coming weeks. “Until then, it will be placed on the highest tier available in each state,” she said.
Harvard Pilgrim Health Care's pharmacy and therapeutics committee, composed of practicing physicians and pharmacists, will evaluate Praluent and Repatha in the near term. A spokeswoman said the Wellesley, Mass.-based insurer had no definitive timetable yet for the review. Harvard Pilgrim has said previously it is interested in negotiating discounts with all involved drugmakers.
“The drug companies and analysts are thinking blockbuster, and we're thinking, 'How do we pay for this?'” Harvard Pilgrim Chief Medical Officer Dr. Michael Sherman said in a February interview. “I can assure you we will be negotiating with both (groups of drug) companies.”