ICER to Novo: Oral semaglutide doesn't stack up to Jardiance when it comes to cost-effectiveness

The Institute for Clinical and Economic Review (ICER) no longer waits for the price of a new drug to be announced before determining whether it will be cost effective—nor does the organization mince words when it makes a negative ruling. It’s latest target? Novo Nordisk’s highly anticipated oral version of its Type 2 diabetes drug Ozempic (semaglutide), which the FDA is expected to approve before the end of the year.

Oral Ozempic, ICER said in a draft report, only offers an “incremental benefit” in preventing adverse cardiac events when compared with products such as Jardiance from Eli Lilly and Boehringer Ingelheim. And because heart benefits comprise only one piece of the complicated treatment puzzle that each diabetes patient presents, “other treatments may provide better overall benefit and at lower cost,” the report concluded (PDF).

Because Novo has not yet priced the oral version of Ozempic, ICER used the annual $6,520 cost of the injectable product as a starting point. It compared the pill to Novo’s Victoza ($5,342 per year), Jardiance ($2,088) and Merck’s Januvia ($1,505), taking into account that patients would also be taking other “background” treatments to lower their blood glucose.

ICER concluded that oral Ozempic plus background therapy would underperform Jardiance in cost effectiveness, as measured by quality-adjusted life years gained.

A spokesperson for Novo Nordisk told FiercePharma the company has been discussing the cost-effectiveness of oral Ozempic and will address all of the organization’s comments. Novo welcomes “this discussion because determining the value of innovation is vital to how healthcare will improve and be reimbursed,” he said.

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Ozempic, a GLP-1 drug that Novo launched last year, has been quick to build a fan base, pulling in $562 million in the first half of this year, up from $40 million in the same period the year before. The company estimates the injectable product is capturing 35% of all patients who are new to GLP-1 drugs.

Novo has high hopes for the oral version of the product. The FDA is set to decide on its approval in Type 2 diabetes in about a week, but Novo is also gunning for labeling that says the pill can reduce the risk of major cardiovascular events in diabetes patients with heart disease. The FDA is scheduled to make that decision by Jan. 20.

ICER scrutinized clinical trial data for oral Ozempic and comparable products and concluded that Novo’s pill did do a better job of preventing cardiovascular complications. But it underperformed when it came to preventing congestive heart failure. ICER noted that there isn’t enough long-term data on these drugs, nor is there a good understanding of how well patients adhere to the treatments—and how adherence rates impact cardiovascular outcomes.

An advisory committee will review ICER’s draft report and vote on it on Nov. 14. The final draft will be published in December.

RELATED: ICER's blasted pharma pricing for years, but now drugmakers are 'rolling up their sleeves' to cooperate

Novo’s willingness to work with ICER is in keeping with a new trend in the biopharma industry. When the organization first started reporting on cost effectiveness in 2015, companies often attacked its conclusions. That’s no surprise: ICER has supported the pricing of just 21 of the 72 treatments it has assessed, according to Bernstein.

These days, pharma companies are less likely to dispute ICER outright, instead engaging in the assessment process in a way that’s “constructive,” David Whitrap, ICER's vice president of communications and outreach, said in a recent interview with FiercePharma.

That’s because a thumbs-up from ICER can help assure favorable formulary placement for new drugs from payers, Whitrap said.

"Unlike their earlier tactic of avoidance, most manufacturers now realize how helpful it can be to have a favorable cost-effectiveness assessment from ICER," he said.