UPDATED: ICER calls for deep discounts to Opdivo, Keytruda, Tarceva, and others in NSCLC

Keytruda Opdivo

A host of new drugs use new mechanisms for treating non-small cell lung cancer, both tyrosine kinase inhibitors (TKIs) and programmed death 1 (PD-1) agents, that in some cases have won fast approvals and offered new hope. But are they worth their cost?

For the most part, a report from the Institute for Clinical and Economic Review (ICER) says not so much, although it acknowledges that depends on the price point used to measure quality adjusted life years (QALY). At at QALY of $150,000, ICER said that the TKI drugs might be considered underpriced. 

The report found some very positive clinical results but figures on the cost side, all of the 6 drugs examined--including Merck’s ($MRK) Keytruda, Bristol-Myers Squibb’s ($BMY) Opdivo and Roche’s ($RHHBY) Tarceva--need deep discounts to be worth their cost  For the TKIs, the institute figures drugmakers would need to cut their prices by more than 20% to be worth their cost if evaluated at a level of $100,000 and for the PD-1s, discounts ranging to more than 60% would be appropriate.

ICER has been offering up public cost and effectiveness evaluations of a number of pricey drugs, becoming increasingly unpopular with pharma in the process. The drugs it evaluates are often the latest, most innovative and closely watched drugs on the market. But, they generally come with high price tags that have flamed the debate over whether drugmakers are asking too much of patients and payers. For each report, ICER calculates a value-based price benchmark that estimates how much better the interventions are at improving patient outcomes, but also what challenges they pose for health-system affordability. Drugmakers have generally faulted its methods and findings which so often suggest the costs drugmakers put on new meds in the U.S. are too high.

In a report released Thursday, ICER looked a first-line therapy for NSCLC with TKIs compared to platinum-based chemotherapy for patients with the EGFR+ mutation. The drugs evaluated in that category were AstraZeneca’s ($AZN) Iressa, Roche’s Tarceva and Boehringer Ingelheim's Gilotrif.

Additionally, the report looked at second-line therapy with PD-1 immunotherapy compared to docetaxel in patients with the EGFR-mutation whose cancer had progressed on a first-line chemotherapy treatment. In that category, ICER looked at Bristol-Myers Squibb’s Opdivo, Merck’s Keytruda and Roche’s Tecentriq, the newest of the PD-1 therapies.  

On the clinical side, the report said that the TKI drugs were better tolerated than platinum-based chemotherapy and achieved at least equal gains in overall survival. It said there was moderate certainty that those drugs offer a “clinically meaningful overall survival benefit.” There was not enough evidence to say that any of the drugs worked better than the other.

In the case of the PD-1 immunotherapies as a second-line treatment, the evaluation found that a “substantial minority” of patients responded; for those who do respond, there is high certainty of important gains in overall survival.

But the report was less reassuring when it evaluated the costs of the drugs, although ICER agreed that comparisons for the PD-1 drugs were hard to make.

For the TKIs, ICER didn’t do a benchmark price for each one, saying the cost-effectiveness estimates were not that different for the TKIs, running from $110,840 to $147,244 per quality-adjusted life year (QALY) gained. Instead if figured an average cost-effectiveness threshold of $100,000 for QALY gained. It then determined that the drugmakers, on average, would need to discount their costs by 21% to reach it. But if QALY is raised to the $150,000 level that some experts think is more representative, the report found that the TKIs were underpriced by about 15%. 

In the case of the PD-1 immunotherapies, ICER figured Tecentriq at a cost of $219,179 per quality of life year gained, $240,049 for Keytruda and $415,950 for Opdivo. It acknowledged that “there is substantial uncertainty in these estimates” and that the results are not directly comparable because of differences in labeled or expected indications, a caveat sure to be seized upon by drugmakers that ICER reports are not that useful.

For the PD-1s, the report put a benchmark of $100,000 to $150,000 per QALY. It said that would mean a discount of 31% to 53% off the wholesale acquisition cost (WAC) list price would be required of Roche Tecentriq to hit that benchmark. For Keytruda, the discount range would be 39% to 61% and for Opdivo the discount would need to be 57% to 68%. After an initial report, ICER updated its calculations on October 7.

While this report looks at the PD-1s as a second line treatment, BMS and Merck had both hoped to win approval for first-line use of their drugs in lung cancer. But BMS had that hope quashed in August when, Opdivo failed to meet goals for use as a first-line treatment for lung cancer, leaving Keytruda in the catbird seat for that indication.

Some of the drugmakers have been through this process before with ICER and have not responded favorably to the institute saying that their price tags are too high for drugs they say offer new hope for sick and sometimes dying patients. When ICER evaluated new treatments for multiple myeloma, including BMS’ Empliciti, and Amgen’s ($AMGN) Kyprolis, both companies offered up refutations. BMS pointed out the ICER model had to draw some conclusions based on uncertainties and accused the institute of setting out “arbitrary barriers to patient access.” Amgen complained about the report even before it went public--all drugmakers get to review and comment on early versions of the report. Amgen even did its own calculations, which it said showed Kyprolis’ economic value was well below the ICER benchmark.

- access the report here

Related Articles:
BMS joins Amgen in blasting ICER myeloma report
Roche's Tecentriq bursts onto immuno-oncology scene, with Merck and BMS in its sights
BMS loses its lung cancer lead to Merck as Opdivo data comes up short
Bristol-Myers' Opdivo falls short at NICE, thanks to Pfizer's Inlyta discount

Editor's note: This story was updated with new discount calculations from ICER.