It's fairly routine for the U.K.'s cost-effectiveness watchdogs to ask companies for more data to support approval for use by the country's National Health Service. Clinical data, price modeling, the works. But asking for information on R&D costs? That's something different altogether.
The National Institute for Health and Clinical Excellence (NICE) directed that question at Alexion Pharmaceuticals ($ALXN), whose sole marketed product, Soliris, is the most expensive drug in the world. Used to treat a handful of rare diseases, Soliris could run £340,200 per year in the U.K., or about $569,000, according to the agency's pricing examples.
NICE says there's no question that Soliris is effective. It works, and very well. The question is whether its price is justified. New drugs often find themselves in this position at NICE, and drugmakers often follow up with discount offers. The agency's cost questions could be a prod in that direction.
"Before we can make a confident recommendation for routine use, we need more information," NICE chief Sir Andrew Dillon said in a statement. For instance, "clarification from the company on aspects of the manufacturing, research and development costs."
The agency's briefing documents state the question more bluntly: "Is the preferred 'total cost' reasonable in the context of R&D and manufacturing costs for this technology?" That's a departure from NICE's usual calculations, which typically focus on quality-of-life years and the like.
It's the latest development in a three-year review of Soliris at NICE, and the drug's halting progress through the cost agency has Alexion disturbed, VP of medical affairs Jon Beauchamp told pharmaphorum. The company takes issue with some of NICE's cost estimates as well. Plus, the company has already handed over "a significant amount of data" about its investment in Soliris, Beauchamp told the website. NICE's request for information about development and manufacturing costs is a new one.
As pharmaphorum points out, Soliris is the first drug to be reviewed under a new process designed for drugs treating "ultra-orphan" diseases. NICE's decision here stands to set a precedent for other super-rare disease treatments--all of which are extremely costly. In fact, Soliris' aggregate cost apparently prompted NICE to not only question Alexion, but also the NHS. Should NICE consider the NHS's budget when making these drug recommendations, and if so, how?
NICE predicts that some 170 patients would be treated in its first year of U.K. use, and that the bill to the NHS would be some £58 million ($97 million) a year at first--and would reach £82 million within five years. Soliris is used indefinitely, often for a lifetime.
Alexion insisted upon keeping information about the drug's exact treatment costs confidential, so the agency's price quotes are illustrations, rather than exact amounts. Typically, drugmakers reveal pricing up front, but keep any discount offers private; Alexion refused to publicly disclose the starting price. "We're disappointed about this decision, for which we have not had an adequate explanation," NICE said.
Soliris brought in $1.55 billion last year, and it's expected to hit $3.4 billion by 2018. It's up for review at NICE as a treatment for atypical hemolytic uremic syndrome, but it's also FDA-approved for paroxysmal nocturnal hemoglobinuria.
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