A new day for 'me-too' meds? EU officials say they're tools for holding prices down

Medicines

The “me-too” drug may be rehabilitated. After years of derision for multiple meds attacking the same problem in similar ways, the “me-too” product is getting attention from regulators as a tool for lowering drug costs.

European Medicines Agency officials put forth the idea in a recent New England Journal of Medicine article, one in a series of tactics regulators might use to keep prices down.

Just as competition from generics and biosimilars push prices down, so might me-too meds, EMA chief medical officer Hans-Georg Richler, agency chief Guido Rasi and their co-authors wrote. Consider what happened to hepatitis C drug rebates after AbbVie’s cocktail entered the market to challenge Gilead Sciences’ meds.

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“[S]ometimes the availability of these products can drive down prices almost as much as the availability of generics,” the NEJM article argues. “When hepatitis C medications similar to Sovaldi entered the market, for example, prices were reduced and access to treatment broadened.”

And now that Merck & Co. has entered the market with its own Zepatier--at a list price of $54,000, just over half that of Gilead’s combo Harvoni--the competition is expected to grow fiercer still.

Hepatitis C isn’t the only example. In diabetes, where multiple classes of treatments comprise multiple individual meds, payers have successfully pressed rival drugmakers to offer discounts. In the basal insulin market, for instance, Sanofi and Novo Nordisk have jostled for formulary placement, and payer negotiations have put a damper on sales growth.

Meanwhile, respiratory drugs, including new launches such as GlaxoSmithKline’s Anoro and Breo, have had to fight their way onto payer formularies. GSK’s longtime blockbuster lung med Advair saw sales tank in 2014 after AstraZeneca’s aggressive negotiations with payers drove patients to Symbicort.

In fact, analysts say the same sort of pressure will eventually apply in most drug classes with multiple products vying for market share.

So, in addition to speeding up generic drug approvals, regulators should focus on making sure that me-too meds “Continue to come on the market at a reasonable speed,” the article suggests.

And yet, more competition doesn’t necessarily lead to less spending, at least in the U.S. Diabetes pricing pressure might be intense from some payers that have the power of critical mass behind them, such as CVS Health and Express Scripts. Smaller insurers and PBMs have less weight to throw around, and Medicare prices tend to see less pressure, too. Indeed, drugmakers in diabetes have been ratcheting up list prices over the past several years, giving them a higher base to discount from, recent media reports suggest.

Still, a range of drugs in a single class does give payers more to work with when it comes to haggling for rebates. So, bring on the me-too meds. 

- read the NEJM piece

Related Articles:
Merck's 'aggressive' hep C pricing helps it steal share in Q1
Teva's Treanda follow-up faces uphill climb as payers get tough on 'me-too' drugs
Who's the diabetes price-cutting culprit: Lilly, Sanofi or Novo?
How big are Gilead's hep C drug discounts? Enough to spook investors
The biggest winners--and losers--in the 2015 race for new drug approvals
Are me-too drugs doomed to suffer?
Pharma hikes prices on all sorts of meds, but hit diabetes hardest: Bloomberg

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