Arkansas stiff-arms CF patients seeking Vertex's $300K drug Kalydeco: WSJ

The drug-pricing battle continues, but this time, Gilead Sciences' ($GILD) Sovaldi isn't at the center. That dubious honor goes to Vertex Pharmaceuticals' ($VRTX) cystic fibrosis treatment Kalydeco. According to a lawsuit filed by three CF patients, Arkansas Medicaid officials are locking them out of Kalydeco treatment.

Kalydeco is a $300,000-a-year treatment. But it's the first drug to address the underlying causes of CF, rather than just the symptoms, and it's approved for small groups of patients with particular genetic disorders. How small? When Vertex scored a recommendation for expanded use in Europe last month, the company said 254 more patients would have access to the drug.

Small market, big price--that's the story for orphan drugs like Kalydeco, whose patient pools are very small. Typically, payers cover the meds, because they're life-saving treatments, and only a few patients are eligible. But Arkansas officials aren't playing along, the lawsuit alleges.

As The Wall Street Journal reports, the patients who sued all meet eligibility criteria set out by the FDA when Kalydeco was approved in 2012. Most importantly, they all possess the rare genetic mutation targeted by the drug. But Arkansas' Medicaid program insists these patients prove that they haven't benefited from older--and less expensive--CF treatments.

The state tells the WSJ that they're primarily restricting access because Kalydeco data doesn't support first-line use. But as the newspaper notes, internal emails show state officials worrying over the cost of Kalydeco, and other expensive CF treatments that follow it to market. "Cost alone was not the determining factor," an Arkansas spokeswoman said of the state's position on Kalydeco, "but how we will pay for it is something we must consider in advance as we are a state agency with limited funds."

The Arkansas debate echoes widespread worries about Gilead's hepatitis C treatment Sovaldi, which is priced at $84,000 per treatment course in the U.S. Private insurers and Medicaid plans alike have been trying to throw up obstacles to its use--limiting access to the sickest patients, for instance--but the drug is still bringing in billions for the company. Last week, a U.S. Senate committee became the latest group to demand justification for Sovaldi's price.

And Sovaldi is far from the only new treatment to roll out with a hefty price tag. Roche's ($RHHBY) latest breakthrough cancer med, the HER2-positive breast cancer treatment Kadcyla, made its debut at $94,000 per treatment course, and Bristol-Myers Squibb's ($BMS) melanoma treatment Yervoy runs more than $100,000.

Given pharma's continued R&D efforts in genetically targeted drugs and rare disease meds, the high prices are sure to continue. All three of those drugs--Kalydeco, Kadcyla and Yervoy--hit FiercePharma's list of drug launch superstars last year, partly because of their expensive sticker prices. And that means private insurers worried about their bottom lines--and U.S. government payers worried about their budgets--are likely to step up the pressure on drugmakers. That's a turnabout in the U.S., where pharma has enjoyed great pricing power, even as other countries have cracked down.

"We have this public health mentality that all people have to be cured no matter what the cost, and also let the innovators charge whatever they want," Matt Salo, executive director of the National Association of Medicaid Directors, told the WSJ. "Those are fine theories independently, but when you combine them together in a finite budget environment, it's not sustainable."

- read the WSJ piece (sub. req.)

Special Reports: Top 20 orphan drugs by 2018 - Kalydeco | Top 15 drug launch superstars - Kalydeco - Kadcyla - Yervoy

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