Can a $37,000 price be right? For Dupixent, analysts (and one payer) say yes

Dupixent package
Sanofi and Regeneron's Dupixent may be a bargain at $37K

Sanofi and Regeneron’s blockbuster-to-be Dupixent made its Tuesday debut wearing a $37,000 list price.

Ahead of approval, Regeneron CEO Len Schleifer said the partners were working with payers on a cost that would make the treatment for moderate-to-severe eczema readily available to patients.

How do those two facts square up? Pretty well, according to analysts, number-crunchers and at least one payer that will foot the bill. And that’s a good thing for the launch.

“Payer commentary since the approval has been largely positive,” said Leerink Partners analyst Geoffrey Porges. That, in turn, “suggests that patients may not be subject to the exhaustive prior authorization and step edit requirements that have delayed and limited access to innovative medicines in recent years.”

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And he’s not the only one. “With this price, we don't anticipate payor restrictions being too onerous with regard to the prior auth process,” Bernstein analyst Ronny Gal said in a Tuesday note. For instance, he added, payers aren’t likely to require photos or measurements of the plaques that characterize the disease. And that, he said, “will allow more moderate patients to receive the drug.”

Obviously, payers can make or break a launch, as Sanofi and Regeneron well know. Their PCSK9 cholesterol-fighter Praluent has been hobbled by prior authorization requirements and high copays as payers hold out for cardiovascular outcomes data—and even after its rival PCSK9 from Amgen, Repatha, posted stats showing it could cut heart attacks and strokes by up to one-third after a year’s worth of therapy, pharma-watchers remained skeptical.

Cost-effectiveness conclusions

This time could be different, partly because of that up-front work with payers and pricing arbiters. The Institute for Clinical and Economic Research, the relatively new, self-appointed cost-effectiveness watchdog, was in touch with the companies ahead of time, Forbes says. In a draft analysis posted Friday, the group concluded that, at a price of $30,000 per year, the drug cleared its threshold—handily—as measured by quality-adjusted life year (QALY) calculations.

Generally, that threshold, per ICER, is $150,000 per QALY, and, after considering the cost of standard treatments, the quality-of-life and productivity improvements for patients, and some other variables, the group crunched out $97,600. Looking at severe patients as a discrete group, the analysis came to $75,100.

And while $37,000 isn’t $30,000, Jefferies analysts expect the net price to Sanofi and Regeneron to be in the “low 30s,” and Bernstein’s Gal figures it will come in even lower, “in the ballpark of $24,000 to $26,000 per year.” And even at that price, Gal sees Dupixent bringing in $1.5 billion in atopic dermatitis, with a future asthma indication worth even more.

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We won’t have an idea of net prices until prescription numbers and sales stats start rolling in. We also won’t know if Sanofi and Regeneron will strike any results-based deals with payers; ICER, for one, left space in its report, to be filled after launch, for pay-for-performance pricing, and its next draft of the report is due in May.

Ahead of the approval, Sanofi VP and Dupixent development lead Gianluca Pirozzi noted that patients who respond to the drug tend to do so after four to six months of treatment. Though he didn't say so, that fact might give room for the companies to offer a money-back deal if a patient hasn’t seen clear benefits after a certain period of therapy.

The elusive win-win

With prices continually in the spotlight, and public pressure for action, the divide between pharma and payers has grown—to the point where drugmakers and pharmacy benefits managers are pointing fingers at each other for driving up prices. Now, launching a new drug is about bridging that divide, Sanofi Genzyme CEO David Meeker told FiercePharma earlier this year. “We should not be on the opposite sides of this equation,” he said, adding that, with Dupixent, the two companies and payers have tried to take the conversation beyond numbers.

“It’s not ‘I got x percent improvement,’ as much it is, ‘Do you really understand the problem? What is the quality of life of a person with atopic dermatitis?’" Meeker said. "There’s data, but there’s also the stories that say, ‘This is the problem we’re trying to solve, and we’re trying to work with you.”

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Now, even Express Scripts CMO Steve Miller—who balked loudly and long at the list price on Gilead Sciences’ Sovaldi, in what some see as a turning point in the pricing debate—told Forbes' Matthew Herper that his talks with Regeneron yielded a price that’s probably right on the money.

“This is really a great example of how it should work,” Miller said in an interview ahead of the approval. “Our plans would obviously like a lower price. [Regeneron's] shareholders would like a higher price. I think the fact we disappointed everyone probably means this came in where it should have.”

Porges echoed the thought. Getting the drug to patients is the key, he said: “[W]e believe the most important element of the strategy is to ensure access, and this price goes as far as investors, payers and patients could reasonably expect towards securing that goal.”