Tesaro undercuts PARP rivals with $118K price tag on Zejula—or did it?

Tesaro has rolled out its much-anticipated cancer drug Zejula—and unveiled its so-far-secret price.

The ovarian cancer therapy, approved to treat recurrent disease in women with and without a BRCA gene mutation, will run $9,833 per month before rebates or discounts at a 200 mg daily dose.

That’s an apparent discount to current PARP-inhibiting rivals Rubraca, from Clovis Oncology, and the first-in-class AstraZeneca med Lynparza. According to Piper Jaffray analyst Joshua Schimmer, those meds run $13,470 and $12,450 per month, respectively.

But, as Tesaro discloses in its release on the launch, the approved starting dose for Zejula is 300 mg daily. At that dose, the monthly price is more like $14,750 a month.

So is the price really $14,750? Or the 33% lower $9,833? Probably both, Schimmer said. Almost 70% of patients in Zejula’s key trial saw dose reductions to 200 mg during the course of the trial, and stayed on that lower dose until their therapy wrapped up. A few even cut back to 100 mg.

“[O]verall, from what we can tell, 30% of patients stayed on the 300 mg dose, with ~60% on 200 mg and ~10% on 100 mg, implying an effective price of ~$10,800” per month,” the analyst wrote.

Price, of course, is one way Tesaro can differentiate its new drug from Rubraca and Lynparza. Another is the fact that, for now, Zejula is the only PARP inhibitor approved for maintenance therapy—specifically in women whose cancer has come back despite response to platinum chemotherapy—though Lynparza, in a new tablet formulation, is pushing for an approval in that setting now.

As a Tesaro spokeswoman noted in a Wednesday email, the National Comprehensive Cancer Network (NCCN) recently added Zejula to its influential guidelines; that recommendation applies to maintenance therapy in patients who've completed two or more lines of platinum-based chemo.

Still another differentiating point is Zejula’s approval for patients regardless of BRCA status; Lynparza and Rubraca are currently approved only for women with BRCA mutations. (Lynparza patients have to fail three rounds of chemo, and Rubraca, two.) For BRCA-negative women, a price comparison between Zejula and its rivals may be immaterial.

How this all works in the marketplace remains to be seen. A larger share of Zejula patients might stay on the 300 mg dose out there in the real world. Then again, a larger share might cut back to 200 mg or less.

Some doctors might even choose to start their patients at 200 mg, regardless of the FDA-approved labeling, Schimmer pointed out.

And in any case, the real-world price of Zejula—and for all the PARP meds, for that matter—in the end depends on deals with payers. Those negotiations will shake out in the coming months, and until then, PARP-class net pricing is likely to be in flux.

As potentially the lowest-cost PARP drug “based on effective real world dose,” the analyst noted Wednesday, “whether or not Zejula can differentiate with payers and gain preferred formulary status is unknown, and we note that PARP inhibitors are reimbursed under Part D and discounting / rebates may make all the difference.”

Back to differentiation: Lynparza tablets won FDA priority review as a maintenance therapy last month, with a decision date in the third quarter; if approved, it can compete with Zejula in that field, at least in BRCA-positive women. And analysts speculate that AstraZeneca could push for approval in BRCA-negative women as well. 

And AstraZeneca might just be working on that already. The company believes Lynparza could win an approval in all patients, regardless of their BRCA status, Mika Sovak, executive director and Lynparza global development lead, told the Pink Sheet last month—if the company can persuade the FDA to take a “totality of the evidence” approach.