The most-clicked link yesterday was to a study about the discount rates used in HTA calculations. You are all hopelessly geeky, and that warms my heart.
Once upon a time, most big medicines stayed on the market for about 13 or 14 years before generic competition kicked in. That’s long enough so that, even if your drug is already marketed, it makes sense to continue to invest. Getting a secondary indication after five or six or ten years still had the potential to provide a return on the investment.
A new study of heart disease drugs quantifies the amazing post-marketing innovation in cardiovascular disease: between 1995 and 2021, 65 heart drugs were approved (60 small molecule meds and five biologics). Of the small molecule meds, 67 indications were cleared after the initial approval. Most of those — 60% — came five years after the drug first hit the market. Forty-six percent were seven years after the first approval.
The research — led by Duke’s Henry Grabowski and published in the Journal of Medical Economics — also looked at post-approval research, and the numbers are similar: of the 1,200+ industry-sponsored post-marketing trials of small molecule heart drugs over those 26 years, more than half read out nine years or more after the initial approval.
Obviously, I’m spouting all of these numbers because they provide a certain amount of context for the Inflation Reduction Act. If your small-molecule heart drug is going to enter “negotiations” at year seven and get price-controlled at year nine, are you going to spend the money on a trial that reads out after the government has intervened? Are you going to go through the rigamarole of getting an additional indication if you’ll only have months, not years, to market it? Especially if, as Avalere pointed out last fall, these CV trials tend to be enormous and expensive.
These are rhetorical questions (the answer is pretty clearly “no”). But the data has a way of crystallizing the broader point: there are incentives for post-marketing research that will be destroyed by the IRA. It might not apply to every study for every drug, but the business case for this kind of innovation is getting a lot worse.
I didn’t mention Orchard’s big gene therapy approval on Monday because there wasn’t pricing attached. I probably should have, though: the treatment, Lenmeldy, is a pretty extraordinary bit of scientific wizardry, aimed at a truly dread disease.
When it comes to the kind of straight-up innovation that we should all be celebrating, Lenmeldy is a fantastic exemplar.
I’m on the case now because the therapy has a price: $4.25 million. That’s already being framed as the “most expensive drug in the world.” (That’s kind of silly, because it’s a one-time treatment, and there are lots and lots of chronic-disease drugs out there with lifetime costs that are far higher.)
There are a couple of interesting elements to the pricing piece here, beyond the figure itself.
First, the company included the price in a separate release, two days after approval. That kind of disclosure is refreshingly transparent, but it also represents the slightly different rules that gene therapies must play by. There is no walking away from a pricing — or value-based contracting — discussion with a gene therapy.
Second, Orchard’s explanation for the price relied, in part, on the ICER review of the product. As Orchard put it, ICER “determined Lenmeldy to have the highest value-based price for any treatment it has evaluated to date,” giving the company cover to price as high as $3.9 million.
It’s the second company in as many weeks to acknowledge an ICER assessment in a pricing disclosure, which is a trend that is definitely worth watching.
(For what it’s worth, ICER still ended up taking a potshot at Orchard in a CNN piece. “Going $310,000 above the very top of that range is actually a lot of money,” ICER’s David Rind told the outlet.)
The media coverage here has been pretty phenomenal. The aforementioned CNN story is great, as is this one from STAT, at really making clear the impact that the medicine will have, which is absolutely the right context for thinking about price.
I flagged a great KFF Health News piece on copay accumulators earlier in the week. My biggest worry with that story was that not enough people would see it. So I was pretty thrilled when the reporting was summarized in the Washington Post’s morning newsletter. Accumulators are one of the worst ideas in a health care system full of bad ones, so any illumination is to be celebrated.
A proposal to change the rules that government the pharma industry in the EU moved out of committee, setting up a full vote next month by the European Parliament. It looks like the the new regulations are considerably more benign than the initial effort, but the reporting here — I’m relying on Endpoints, mostly — suggests that industry is still wary.
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