U.K. cost watchdog gives second thumbs-up in a week to Merck's Keytruda for skin cancer

Merck's ($MRK) Keytruda is two-for-two this week with the U.K.'s cost watchdog, nabbing a thumbs-up as a first-line treatment for skin cancer days after the National Institute of Health and Care Excellence (NICE) signed off on the med for patients who have already received treatment.

The cost effectiveness gatekeeper agreed to cover Keytruda for advanced melanoma in individuals who haven't already taken Bristol-Myers Squibb's ($BMY) Yervoy. Earlier this week, NICE gave its blessing to the drug for patients who have received treatment with Yervoy and whose cancer is spreading or can't be removed.

NICE based its recommendation on calculations that showed the med's benefits outweighed its costs at £50,000 per quality-adjusted life year, as long as Merck offers a discount through a patient access scheme, PharmaTimes reports.

"We are pleased that the U.K. government has recognized the value of Keytruda, and thank the government for its efforts to ensure that patients in the U.K. who have advanced melanoma have access to Keytruda as soon as possible," Deepak Khanna, senior VP and regional president of Merck's Oncology division in Europe, said in a statement.

The cost watchdog's OK follows more good news for Keytruda in the U.K. A few months ago, a new program, the Early Access to Medicines Scheme selected the drug as its first therapy under the scheme, which is designed to fast-track products that help patients with serious illnesses and no other treatment options.

The U.K. blessing also helps Keytruda in its head-to-head battle with BMS' Opdivo as the drugs vie for market share. Opdivo received FDA approval for treatment of advanced melanoma just months after Keytruda. but leaped ahead of Merck's drug in March with quick FDA approval for use in advanced squamous non-small cell lung cancer (NSCLC).

Not to be outdone, Merck recently bounced back with fast FDA approval for Keytruda in NSCLC. But the agency restricted the drug's label to patients who test positive for a PD-L1 biomarker, potentially complicating matters for the company as it competes with BMS for sales. Lung cancer represents a lucrative opportunity for the drugmakers, with $21 billion in potential sales by 2022. Opdivo is expected to win approval with a wider label that could give it an edge over Keytruda in tapping that market. 

But not everyone sees things that way. The FDA's decision to restrict Keytruda's label "may not matter as much as investors think," Bernstein & Co. analyst Tim Anderson said in a note to investors, especially if and when both drugs are approved for first-line use. Plus, the narrow label doesn't mean much overseas as payers restrict the drugs to biomarker-positive patients to cut costs, he added. 

Meanwhile, both companies are gunning for more indications to try to win the PD-1/PD-L1 crown. In September, Opdivo scored the FDA's "breakthrough" tag for kidney cancer, opening the door for accelerated approval and putting the heat on rival Merck.  

- read Merck's statement
- here's the PharmaTimes story

Special Reports: The new drug approvals of 2014 - Keytruda - Opdivo | Top 10 best-selling cancer drugs of 2013

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