Amgen strikes Enbrel 'outcomes' contract with Harvard Pilgrim

Evan as biosimilar competition for Amgen’s blockbuster rheumatoid arthritis drug Enbrel is lurking in the background, the biotech may have found a way to preserve market share with an outcomes-based contract for the popular med. 

Amgen and Harvard Pilgrim Healthcare today announced a two-year contract in which the insurer will pay less for the drug if patients score below certain levels based on six criteria that will be measured and then crunched by “an effectiveness algorithm.” The measurements include patient compliance, switching or adding drugs, dose escalation and steroid interventions.

The companies said the deal is the first of its kind for a rheumatoid arthritis medication.

“Real world performance of new medicines frequently differs from the well-controlled clinical trial setting and we know that historically, only about a third of patients on Enbrel and others in this class meet all six criteria,” Harvard Pilgrim Chief Medical Officer Michael Sherman said in a statement. “By linking the ultimate cost of this drug to its real-world clinical efficacy, this agreement truly puts patients at the center of focus.”

For its part Amgen Senior VP Joshua Ofman said that  the company “’aims to demonstrate the value of using Enbrel to effectively treat patients and provides powerful evidence to be considered by formulary decision-makers in the future.”

That future includes biosimilars for Enbrel–– which last posted $5.4 billion, up 11j%–– and Amgen seemed to be indicating a readiness to negotiate with other insurers for some kind of preference for Enbrel over biosimilars.

The FDA in August approved Enbrel copy Erelzi from Novartis’ but launch of the drug is being held at bay by a court battle between the two companies. Richard Francis, who heads Novartis' Sandoz unit, recently told Reuters that the patent fight probably won’t conclude before sometime in 2018.

A spokesperson for Amgen, which has it own biosimilars under development, said the company's work with value based contracts and partnerships is about rewarding medicines that deliver value and solutions for patients, not a reaction to biosimilar competition. 

Amgen is not the only drugmaker dealing with biosimilar competition to talk about “innovative contracts.” Johnson & Johnson brought it up after Pfizer late last year launched Inflectra, a biosimilar of the RA drug J&J sells in the U.S. and Merck sells in Europe. Merck’s Remicade revenues shriveled by 29% last year to $1.26 billion as biosimilars achieved as much as a 40% share in some markets. J&J execs continue to argue the Remicade brand can hold its own in the U.S. but have also spoken about using “innovative contracts” in that showdown.

Amgen has transversed this kind of new contracting territory before. In 2015, it negotiated a pay-for-performance deal with Harvard Pilgrim for its new generation cholesterol lowering drug, Repatha. The arrangement won it an exclusive spot on the payer's formulary in return for an upfront discount and future rebates if Repatha didn't perform as outlined.

The Amgen Enbrel contract was actually one of two that Harvard Pilgrim announced today. It also has a deal with Eli Lilly for osteoporosis medicine Forteo based on adherence. The self-injected drug is supposed be taken every day for 24 months but patients often don’t keep up the regimen.