Want to win over payers, pharma? Forget the 'me-too' drugs, CSL chief says

perreault
CSL appointed Paul Perreault as its CEO in 2013. (CSL)

If payers are looking askance at certain new drugs, there's good reason, CSL Chief Executive Paul Perreault figures. Pharma is too preoccupied with short-term growth, so it's still going for the easier "me-too" route rather than focusing on "transformative" therapies.

In his 35-plus years of experience in the drug industry, pricing and costs have always been a wrangle, the helmsman told FiercePharma. For decades, though, payers “continued to pay.” 

“Now, you are seeing people stop paying,” he said. Me-too drugs—which have been called out in the past—may get approved, but they face a tougher task to secure reimbursement than before.

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As he sees it, pharma execs are rightly concerned about shareholders and growth. But he's worried some are zeroing in on short-term payoffs and trying to grow by simply adding "additional medicines" to their portfolios.

“You are going to see it time and time again in the future that governments are not going to pay for me-too products that are slightly better,” he said. “That’s not innovation—you need something transformative.”

If a drug is significantly better for patients than existing treatments, payers will see the value and reimburse the product, he said.

From his company, Perreault cited Haegarda and Idelvion as launches in the "transformative" category. CSL launched Haegarda to prevent hereditary angioedema attacks in 2017, and the drug scooped up almost half of the market in its first year, he said. The drug is injected under the skin and reduces attacks by more than 90%, Perreault said, and it launched as competitor Shire suffered manufacturing challenges for Cinryze. 

Shire launched rival Takhzyro at the end of 2018, but even now Perreault said many patients are staying with Haegarda because they've seen the benefits of CSL's drug.

RELATED: After New Year's, expect more drug pricing fireworks in 2019 

For Idelvion, Perreault said the factor IX hemophilia B treatment was transformative when it launched, and it’s now the standard of care for patients. With the drug, patients can reduce their treatment frequency to once every two weeks compared with multiple times per week, the CSL CEO said.

Growth for the two drugs played a factor in CSL's strong 2018, during which the drugmaker's share price grew about 30%. 

Perreault’s remarks came at the J.P. Morgan Healthcare Conference in San Francisco, where once again drug pricing was a central topic. After years of routine list price hikes by large drugmakers—and larger one-time hikes by small companies that caught many headlines—the issue continues to linger over the industry. 

RELATED: As JPM 2019 wraps up, biopharma's outlook is 'cautiously optimistic,' executives say 

Last week, Democratic lawmakers and Sen. Bernie Sanders introduced a slew of familiar proposals to curb costs, and the Trump administration continues to work to reduce prices by increasing competition in drug markets. Amid the discussion and controversy, drug price hikes have slowed, but prices have still climbed under the Trump administration, an AP investigation found

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