Vertex Pharmaceuticals' ($VRTX) long-awaited cystic fibrosis approval is here--and the combo med Orkambi is just as pricey as analysts expected.
Thursday's FDA approval of Orkambi, which pairs the already marketed orphan med Kalydeco with the new drug lumacaftor, covers CF patients with two copies of the F508del mutation. That's about 8,500 in the U.S.--more than four times the number currently approved for Kalydeco alone.
And the drug bears a list price of $259,000 per year--one that's "in line with Street expectations," Leerink Partners analyst Howard Liang wrote in a Monday note to clients. Some analysts had expected a price on par with Kalydeco, with a price tag above $300,000, but others had expected something less than $259,000.
That means a big increase in sales for Vertex--and costs for payers, which will be looking for discounts. A higher percentage of the Orkambi-treatable population is on Medicaid--about 35% to 40%, versus a percentage in the low- to mid-20s for Kalydeco, Evercore ISI analyst Mark Schoenebaum wrote in an investor note last week.
Payers have been laying the groundwork for their discount arguments. In May, Prime Therapeutics forecast that if priced on par with solo Kalydeco, the new tandem could run the pharmacy benefits manager $367,000 per patient per year, with medical and pharmacy costs included. And if patients start it at the earliest FDA-approved age of 12 and receive 28 years of treatment? That's a lifetime therapy cost of $10.3 million, the PBM figured.
And while Orkambi finally did ring in below Kalydeco's price, it still costs a pretty penny--a fact that spurred Vertex to start prepping payers for the blow a few months back. On February's Q4 conference call, Chief Commercial Officer Stuart Arbuckle noted that the drugmaker was "investing in disease education to help payers estimate the number of eligible patients they may have in their plans."
- read Vertex's release
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