Drug developers, economists, and politicians are smart people. But maybe a four-year-old could have predicted this one: What goes up, must come down.
Are drug prices finally on the way down?
Looking at some of the major 2017 approvals thus far, there is some evidence to suggest the culture is slowly shifting.
Even Teva Pharmaceuticals appears to have turned a new leaf. On Tuesday, the Israeli company announced that its Huntington’s disease therapy Austedo (deutetrabenazine) had received an FDA nod. Rather than altering the course of the disease, it helps treat patients’ involuntary movements.
Leerink analyst Jason Gerberry reported that Austedo will be priced at around $60,000 a year. That compares to an older version of the drug called Xenazine (tetrabenazine), which sells for $152,000 per year. A generic version goes for $96,000.
Austedo caps off a progressive few weeks.
In late March, Roche subsidiary Genentech got the green light to market Ocrevus (ocrelizumab) for relapsing-remitting and primary-progressive multiple sclerosis (the latter being an industry first).
Genentech announced an intended list price of $65,000 — pretty reasonable given the drug delivered a 47 percent reduction in annualized relapse rates compared to Rebif, a first-generation MS therapy that sells for around $86,000.
On the same day, Regeneron Pharmaceuticals’ Dupixent (dupilumab) was approved for moderate-to-severe eczema. It got stamped with a list price of $37,000 a year, a significant discount on older drugs that sell for around $50,000 per year.
Based on EvaluatePharma’s predictions, Ocrevus and Dupixent will be the highest grossing drugs to enter the market in 2017. The pricing on those drugs matters.
Also in March, Newron Pharmaceuticals finally earned U.S. marketing authorization for Xadago (safinamide), an iterative MAO-B inhibitor for the treatment of Parkinson’s disease. The drug was already approved for sale in Europe.
Xadago doesn’t represent a huge therapeutic gain and Newron – to its credit –priced it that way. Without insurance, a 30-day supply of the drug will cost $670, to be marketed in the United States by US WorldMeds.
This all comes in stark contrast to Marathon Pharmaceuticals, the outlier in the conservative pricing trend. But the public, political and industry reaction to its proposed list price speak volumes too.
After receiving marketing approval for its Duchenne muscular dystrophy drug, Marathon slapped an $89,000 price tag on what is essentially a decades-old corticosteroid, available overseas for around $0.60 per dose.
Marathon eventually backed down after much outcry from the media and a harshly worded letter courtesy of Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings, (D-Md.). Marathon has since sold the franchise to PTC Therapeutics.
It seems there’s no longer any tolerance for the ‘how far can we push this’ approach. The smart players are instead asking ‘what is reasonable and sustainable in our current healthcare climate?’
But it’s early days. A handful of good examples doesn’t signal an industry shift. That will take many more years and wider changes to the healthcare system.
Photo: TAW4, Getty Images