Payers expect Provenge sales to stay flat

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Don't look for Provenge usage to move into high gear anytime soon. That's the message from a new survey of leading payers, which expect the Dendreon ($DNDN) cancer treatment to chug along at its current sales rate for some time. Major insurers and pharmacy benefits managers such as Express Scripts and Anthem Blue Cross attribute the low uptake to strict coverage policies that limit patient selection and low demand from doctors. About a third of them expect utilization to increase over the next 6-9 months, but only as much as 10%. The rest say utilization will stay the same.

It's bound to be disappointing to Dendreon--which set some pretty ambitious sales forecasts--and to those investors who've been looking for recent sales shortfalls to reverse themselves. After announcing that Q2 sales had hit only $50 million, well below analyst estimates, Dendreon yanked its financial guidance for the year and said it planned to lay off workers. But executives held out hope, saying doctors needed more education about reimbursements, particularly about Medicare's decision to cover on-label Provenge use nationwide.

Then there was the cost density issue: that Provenge is given in three treatments over a month's time at a total of $93,000. Other expensive cancer drugs might be administered over the course of a year. Oncologists pay for drugs first and get reimbursement later, so treating a patient with a quick-hit $93,000 therapy means they're putting a lot of money on the table. If they're afraid they won't get reimbursed later, they might think twice about using the drug altogether.

But the survey from Reimbursement Intelligence suggests that reimbursement confidence isn't the only issue. Respondents, which included a variety of Medicare Advantage plans, said the high total cost of the drug is a barrier, particularly when patients have to pay for 20% of it. And though the price tag on Provenge is $93,000, surveyed payers put the true cost at more like $100,000 to $120,000, including infusion charges.

Reimbursement Intelligence's Rhonda Greenapple said doctors are likely to go through their own cost-benefit analyses when deciding whether to use Provenge. "You're sitting in front of a patient with an 80/20 plan, and you know that this drug gives them only an extra four months to live," Greenapple said. "That's the issue. These patients have to pay 20%. It's one thing to say patients have access to the product, but that doesn't account for what patients have to go through in real life."

There are other barriers, too; surveyed payers said they have a list of criteria used to determine whether a patient qualifies for Provenge therapy to make sure it's used strictly according to the label. That filters out some reimbursement requests. Still, the majority of patients end up getting approved, the survey found. So, part of the problem is demand from doctors, the payers said. Almost 80% of respondents said they'd observed "low uptake" of Provenge, and 60% of them blame physicians' prescribing habits. Now, some of that demand shortfall could be because of reimbursement fears, as Dendreon says. But payers themselves cited "lack of physician confidence in the drug" and "limited clinical value," too.

- here's the link to the Reimbursement Intelligence website

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