Should Bristol-Myers cut payer deals to boost melanoma combo over one-drug treatments?

Immuno-oncology partnerships are all well and good--even essential for companies with combo-treatment ambitions. But in melanoma, Bristol-Myers Squibb's ($BMY) in-house cocktail may have an advantage, analysts said in a new report.

The fact that Bristol-Myers has its older targeted drug Yervoy to pair with PD-1 leader Opdivo could give the company an edge with payers, GlobalData figures. The company controls its own discount offers, and it could cut some deals on its two-drug combo to keep rivals at bay, if and when the FDA approves the cocktail.

The company might need that advantage right now, too. Even before other companies' joint combos hit the market, that discount power could help. The Opdivo-plus-Yervoy cocktail will be going up against monotherapies such as Merck's ($MRK) Keytruda, GlobalData says, and despite some impressive new study results for the combo, payers may want to stick with a one-drug approach to keep spending down. Keytruda is no slouch, either; the drug recently beat Yervoy in a head-to-head trial as a first-line treatment for advanced melanoma.

"The high cost of immuno-oncology therapies, especially when drugs are used in combination, is likely to result in a pushback from payers regarding the Opdivo combination regimen, opening the door for competitors, such as Merck's Keytruda," GlobalData's Fenix Leung. "In order to ease payers' resistance, BMS may decide to offer a discount if Opdivo and Yervoy are used in combination."

After all, payers are tearing their hair out over the high cost of new meds. New cost-effectiveness evaluation tools--including the proposal unveiled last week by the American Society of Clinical Oncology--stand to put more hard data into the hands of doctors and patients alike. Plus, the imprimatur of ASCO might just give payers cover for making unpopular formulary decisions.

GlobalData figures Bristol-Myers can bag peak sales of $3.28 billion for the two drugs in melanoma in 8 major drug markets by 2023. The company is likely to dominate other drugmakers in the field unless someone else comes up with a combo that's more effective or less prone to cause side effects, or both, the firm said. The FDA is scheduled to make a decision on the combo therapy by the end of September.

Overall sales of Opdivo alone are expected to hit $8 billion by 2020, according to a new report from EvaluatePharma. Merck's Keytruda, the only other PD-1/PD-L1 option on the market yet, is pegged at almost $5 billion by that time.

- read the GlobalData release

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