U.S. drug payers have been able to beat back high prices for some COPD and diabetes drugs, much to the chagrin of GlaxoSmithKline ($GSK) and Sanofi ($SNY). But several new categories promise to break out in a big way, and we are not talking just about hepatitis C drugs. Experts suggest new classes of oncology drugs as well and cholesterol fighters will be widely used and highly priced. While a worry for payers, that is a positive for investors in companies like Merck ($MRK), Sanofi ($SNY) and Bristol-Myers Squibb ($BMY).
In the cancer arena it is immuno-oncology treatments, drugs like anti-PD1 treatments, being closely monitored by payers and investors alike. "In the field of oncology, new anti-PD1 drugs (Opdivo and Keytruda) and Ibrance, a breast cancer treatment from Pfizer, will be the major drivers in continued double-digit drug spending increases," Mark Ginestro, a principal at KPMG Strategy, tells Formulary Journal.
Bristol-Myers Squibb's Opdivo only this year has received accelerated FDA approvals for melanoma and then lung cancer but analysts have already ratcheted up the level of sales they think it can reach. Some are now forecasting it will find $7 billion in annual sales in 5 years. And that is just for the one drug. Forecasts are saying the entire category, which also includes Keytruda and potential contenders from Roche ($RHHBY) and AstraZeneca ($AZN), could generate $33 billion in sales in 2022.
IMS Institute for Healthcare Informatics points out that even before approval of most of those drugs, the global annual growth rate for cancer drugs in the last 5 years was already at 6.5%, Formulary Journal points out.
There is also big expectations for the new class of cholesterol drugs, the so-called PCSK9 inhibitors, which are expected to be used alongside cheap statins, at least in a significant percentage of patients. Both Praluent from Sanofi and Regeneron ($REGN) and Amgen's ($AMGN) Repatha have been recommended for approval by FDA committees are expected to win approval this summer.
Heart disease is the one that still claims the most lives each year in the U.S. and a recent survey of doctors indicated they have big hopes for the new treatments. It found that 18% expect to prescribe one of the PCSK9 drugs to their patients with high cholesterol levels. More than 75% of surveyed cardiologists were excited about the drugs' potential and only about one-third thought the meds should be restricted to high-risk patients.
Aware of the impending bills, payers have already indicated they will try to pit one against the other to cut pricing deals. They learned that lesson from Express Scripts ($ESRX), which set off a price war for hep C treatments last year when AbbVie's ($ABBV) Viekira Pak was approved and offered competition to the runaway success of Sovaldi and Harvoni from Gilead Sciences ($GILD).
According to Formulary Journal, payers think that even if PCSK9 inhibitors are prescribed only for a narrow patient population, that costs for the drugs could surpass the astronomical amounts of money that Sovaldi generated in its initial launch. Bill Shew, a principal at KPMG tells the publication that he expects Repatha and Praluent to be limited to niche populations initially, "but will grow over time as more research and physician and patient support broader use."
- read the Formulary Journal story