What will next-gen cancer cocktails cost? It's all about value, execs say

macrophages killing cancer under electron microscope
Macrophages killing a cancer cell.

LONDON--Immuno-oncology drug developers have heard the debate about drug prices--and not only that. They’re listening.

The first two cancer-fighting PD-1 drugs, Merck & Co’s Keytruda and Bristol-Myers Squibb’s Opdivo, both hit the market with six-figure prices. Others are soon to follow, including Roche’s atezolimumab, no doubt bearing similar price tags.

But as some top names in the field said Tuesday, a bigger worry is ahead, and that’s the cost of two- and three-drug cocktails coming up pharma pipelines. The sum of those parts, if priced individually, would make a mighty big hole in payers’ budgets.

“There will be a correction at some point when we get into thorny issue of pricing,” said Iain Dukes, SVP for business development and licensing at Merck Research Laboratories, at the BioTrinity conference in London. “How much can the market bear when everyone starts adding on in the IO space? They can’t all be $130,000 a pop.”

The drugmakers who’ve partnered up on combination therapies--and there are many permutations among Big Pharma companies and smaller biotech players--will have to somehow price their meds to make combinations affordable. That could require some touchy negotiations.

Meanwhile, companies that manage to own all the ingredients of a particular cocktail could have a pricing advantage, AstraZeneca’s search and evaluation director in oncology Chris Sheldon said. But as he pointed out, one company isn’t likely to be at the cutting edge in every one of the many approaches to cancer immunotherapies.

AbbVie’s Neils Emmerich agreed that the best drug combos are likely to come out of clinical collaborations. Companies would have more freedom “if they own … two or more assets in a package compared with owning one,” said Emmerich, who heads up search and evaluation in oncology at AbbVie worldwide. Owning the package would allow them to work out pricing and reimbursement on their own.

“But in the end, it comes down to what are the most promising combinations, where 1 plus 1 is significantly greater than 2,” he said.

In the end, it all comes down to value, the panelists agreed. If these therapies and combination cocktails really deliver the goods, then payers are likely to cover them. And these immuno-oncology treatments do deliver more value than older therapies, said Carl Decicco, who heads up discovery at Bristol-Myers.

“You have very, very durable responses among people who respond,” Decicco said. “These things are not two months more of life after a tough run of chemo. They’re drugs with very little in side effects and people do respond.”

Even better, said Decicco, would be finding markers to flag the best options for each individual patient. That way, doctors could “zero in on who will respond, and reimbursement could be appropriate.”

The key is results, said Juno Therapeutics and Chief Scientific Officer Hyam Levitsky. “If we set the bar high enough, at the level of long-term disease-free survival if not a cure, the market will bear the cost of doing that.”

Related Articles:
Opdivo gives head and neck cancer patients a shot at 12-month survival​
BMS' Opdivo produces 5-year survival rate for a third of advanced melanoma patients
Merck's Keytruda has a shot at a bigger share of NSCLC sales