The $14,000 annual sticker price on the new class of injectable cholesterol-lowering drugs would need to drop as much as 82% to make the drugs cost-effective, concluded a report released Tuesday (PDF) from the Institute for Clinical and Economic Review.
The cost should drop even lower to avoid straining budgets, the independent not-for-profit research group found.
Dropping the price by 82% would make the annual cost $2,520. But an additional cut, taking the price down to $2,177, would be even better, the institute recommended.
High costs “should serve as an alarm bell” for doctors, insurers, employers and drug companies, especially when they are set for therapies that will affect a lot of people over extended periods of time, the report warned.
The report looked at a new class of drugs called PCSK9 inhibitors. The drugs work by blocking the PCSK9 protein that inhibits the body's ability to remove LDL, the bad cholesterol, from the blood.
The drugs currently are manufactured by Sanofi and Amgen. The Food and Drug Administration in July approved Sanofi's Praluent to treat certain patients with high cholesterol. In August, the agency gave the green light to Amgen to market Repatha.
The report compared the drugs' costs against factors like quality of life, potential side effects and risk of death.
Though the drug class is hailed as a true medical advancement with impressive results, the price tags could ultimately curtail the benefits, the institute's report said.
The report's timing is significant as health economists say that ideally value-based prices should be set before a new drug launches. Those same experts pointed out that the more time passes, the more difficult it is to readjust prices.
Even if the drugs were used in about 25% of eligible patients, they would cost the nation on average $20 billion a year, institute President Steven Pearson said in a statement. He called on measures to make them more affordable.
Pharmacy benefit managers like Express Scripts and CVS Health have had success negotiating lower prices on expensive new hepatitis C treatments.
Amgen said in a statement that it strongly believes in the clinical and economic value of Repatha and welcomes discussions of value. But the company disagrees with the institute's methodology, assumptions and preliminary conclusions.
“We are concerned that ICER's review does not place value on addressing a significant unmet medical need,” the Amgen statement said, “and its short-term budgetary focus will be used to create access barriers to innovative medicines like Repatha.”
That rationale has been challenged by other groups in recent months as drug prices have trended upward quite dramatically. The Institute for Clinical and Economic Review is one of several groups not only re-evaluating how prices are set but challenging the manufacturers on how they set them.
In June, the American Society of Clinical Oncology released a set of drug comparisons for first-line treatments of four different cancers. Modern Healthcare reported in July that pharmaceutical firms have been teaming up with insurers and health systems to link costs of drugs with real-time evaluations of patient health outcomes.
Though manufacturers often cite the costs of creating the new therapies, the institute's report said there is a big difference between therapies for rare diseases that serve a small number of patients and those meant to be “lifelong therapy for a large and growing population” such as those with pre-existing cardiovascular disease.
Those high prices may have a “sizeable effect on total healthcare spending,” the report said. Though the report suggested a cost reduction between 63% and 82%, “even deeper reductions may be required to avoid excessive cost burdens to the health care system,” the report said.
Tuesday's report is the first of two drug price analyses released this week by the institute. The next study, scheduled to post Friday, will focus on Entresto, a new heart failure drug from Novartis.