Sanofi halves the cost of controversial new cancer drug Zaltrap

By Eric Palmer and Tracy Staton

Sanofi ($SNY) has put Zaltrap on sale for 50% off. The colorectal cancer drug isn't an overstock, but a brand-new product, approved by FDA in August. Like most new cancer drugs these days, it's expensive, with a price tag of about $9,600 per month for a typical patient. Unlike other pricey cancer treatments, however, Zaltrap has hit price resistance very early -- and very publicly.

Last month, three doctors at Memorial Sloan-Kettering Cancer Center announced in the New York Times that their hospital wouldn't be using Zaltrap. They didn't think it was worth the price. Other available drugs are just as effective, they said, so why provide the far more expensive Zaltrap?

At the time, Sanofi CEO Christopher Viehbacher said the Sloan-Kettering doctors were wrong about Zaltrap's value for the money. The French drugmaker says it still believes the current price is fair. "However, we recognize that there was some market resistance to the perceived relative price of Zaltrap in the U.S., especially in light of low awareness of Zaltrap in the U.S. market," Sanofi said in a statement emailed to FiercePharma. "As such, we are taking immediate action across the U.S. oncology community to reduce the net cost of Zaltrap."

So, Sanofi is setting up new deals with U.S. cancer treatment providers, to offer Zaltrap at discounts of about 50%, the company said. The "acquisition price" itself remains the same. The price cut was first announced in The Cancer Letter.

The question now is whether Sanofi's move will ripple outward to other new-and-expensive treatments. There's reason to believe it could; doctors have resisted adopting Dendreon's prostate cancer vaccine Provenge, for instance, partly because of the $93,000 sticker price.

But there are some particulars to Sanofi's case. FDA granted Zaltrap a second-line approval in metastatic colorectal cancer, after patients failed on oxaliplatin-based chemo. That's a market already dominated by Roche's ($RHHBY) Avastin and Bristol-Myers Squibb's ($BMY) Erbitux. Like Avastin, Zaltrap is an angiogenesis inhibitor, which fights cancer by choking off the blood supply to tumors. With that kind of competition, analysts had expected Zaltrap to max out at $300 million to $400 million.

Even then, experts suggested that Sanofi could gain an edge with the right price. Just before Zaltrap won approval, Dr. Tanios Bekaii-Saab, an associate professor in Ohio State University's College of Medicine, told BioPharm Insight that Sanofi and its partner Regeneron ($REGN) lacked data suggesting Zaltrap would outperform Avastin. So, the two companies might undercut Avastin's price -- a move that could benefit patients as well as Sanofi and Regeneron, he said.

- here's The Cancer Letter's story (PDF)
- get more from BioPharm Insight via Financial Times

Top U.S. hospital won't use pricey Sanofi cancer drug
FDA approves Sanofi's Zaltrap for colorectal cancer
Zaltrap approval a win for Sanofi, even at $400M max
Sanofi colorectal cancer contender Zaltrap suffers a PhIII trial setback