Express Scripts rolls out value-based pricing for cancer meds

Express Scripts ($ESRX) will put its money behind a new value-based reimbursement model next year, using comparative data and indication-specific pricing to favor "clinically superior" meds. The pharmacy benefits manager will roll out the approach in cancer first, with anti-inflammatory meds close behind.

Express Scripts CMO Steve Miller

"Many of these drugs are indicated for lots of different diseases, but they have variable success," Express Scripts CMO Steve Miller told Bloomberg.

Drugmakers can opt into the indication-based pricing program to make sure their treatments are covered across the board. Therapies that beat all other treatments in a particular cancer type would be covered regardless of participation. Those with variable success might only be covered in the indications where they work best if their makers don't participate, Bloomberg says--provided suitable alternatives are available.

The idea builds on initiatives by the American Society of Clinical Oncology--which is rolling out a drug-evaluation framework that rates the benefits, side effects and costs of various treatments--and Memorial Sloan Kettering's Center for Health Policy and Outcomes, which advocates pricing drugs according to their results in individual indications.

As a for-instance, Memorial Sloan Kettering's Peter Bach has quoted wide-ranging cost suggestions for particular drugs in their various uses. If Erbitux's price were linked to results, it would run $10,319 in premetastatic head and neck cancer, where it delivers the best results, Bach suggests. For head and neck cancer that has recurred or spread--an indication where it's less beneficial--the price would be $471 per month, Bach suggests.

Miller himself has used Roche's ($RHHBY) Tarceva as an example. Its cost would be higher in lung cancer, where it has delivered better survival data. It would cost less where its survival advantage is smaller, such as pancreatic cancer. In one trial, Tarceva prolonged pancreatic cancer patients' lives by a median of less than two weeks compared with placebo.

Roche CEO Severin Schwan

Roche CEO Severin Schwan thinks indication-based pricing is a reasonable approach, Bloomberg reports. "The value of a cancer drug can be very different for different indications," Schwan told the news service this week. "It makes a lot of sense to align the price with different indications."

- see the Bloomberg story

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