How Much Should Governments Pay For COVID-19 Monoclonal Antibody Therapies?
Executive Summary
US government’s $450m manufacturing commitment for Regeneron’s antibody cocktail and Gilead’s price for remdesivir drive lower expectations on pricing for the antibody treatments, especially since it seems likely there could be several competing products.
The public spotlight has turned toward monoclonal antibody therapies for COVID-19 following President Trump’s recent treatment with Regeneron Pharmaceuticals, Inc.’s experimental cocktail and Eli Lilly and Company’s move to seek an emergency use authorization for its single antibody drug, raising questions about how they will be priced.
Regeneron’s manufacturing and supply agreement with the US government for its antibody treatment offers some preliminary guidance. Under the Regeneron contract, the government has committed $450m to support manufacturing of a fixed number of doses (estimated range of 70,000 to 300,000 as a treatment), which would imply a per dose price in the $1,500 to $6,429 range. (Also see "Regeneron COVID-19 Therapeutic, Novavax Vaccine Get BARDA Funding To Boost Manufacturing" - Pink Sheet, 7 Jul, 2020.)
Monoclonal antibody drugs on the market for cancer and immunology have been notorious for five and six-figure annual price tags. But those costs cover multiple doses over the course of several months and the Regeneron drug for COVID therapy is a single-dose agent.
Bernstein analyst Ronny Gal puts the per dose price for the Regeneron treatment at no higher than $2,400, and “maybe lower,” based on his early estimates.
Gal also expects the two other antibody therapies for COVID-19 being developed by Lilly and AbCellera Biologics Inc. and Vir Biotechnology, Inc. and GlaxoSmithKline plc to be priced in line with the Regeneron treatment, he told the Pink Sheet.
GSK/Vir and Lilly/AbCellera have not announced US government contracts supporting manufacturing for their antibody therapies to date. But both teams are moving their treatments along rapidly.
Lilly has filed an emergency use authorization for its single antibody treatment for COVID-19 and has promising results from early studies on an antibody cocktail, the company announced on 7 October. (See sidebar.)
Vir and GSK recently began Phase III testing for their antibody treatment and initial data from the registrational portion of the trial seeking to prevent hospitalization of COVID-19 patients may be available before the end of 2020, with complete results expected in January 2021. (Also see "Vir/GSK Move Lead Coronavirus Antibody Into Phase III" - Scrip, 6 Oct, 2020.)
Veklury Price As A Benchmark?
A price of around $2,400 would be roughly comparable to what Gilead Sciences, Inc. is charging US government agencies for its antiviral for COVID-19, Veklury (remdesivir), which is available under an EUA. (Also see "Gilead’s Remdesivir Pricing Sets ‘Promising’ Precedent For Future COVID-19 Drugs" - Pink Sheet, 30 Jun, 2020.)
US government purchasers (the Department of Veterans’ Affairs, Indian Health Services, Department of Defense and the Coast Guard) will pay $2,340 for a five-day course of Veklury and US health plans will pay $3,120. Medicare and Medicaid would reimburse providers at commercial rates.
Veklury’s pricing has not met with significant pushback from payers or the public, which may have encouraged Regeneron to take a similar approach for its therapy. “My thinking is that they are price-followers – if this price was good for Gilead, then its good enough for them,” Gal suggested.
Public Citizen access to medicines advocate Steven Knievel agreed that the $450m funding announcement implies a price range of $1,500 to $6,429 per dose for the Regeneron therapy. But “while this will probably anchor expectations about a price that is subsequently established” it “shouldn’t be taken as the wholesale acquisition cost,” he told the Pink Sheet.
Regeneron Antibody Drug Has Been ‘Low Risk Endeavor’
Knievel also suggested Regeneron should face scrutiny over the government funding it has received for its product and whether its price is fair considering taxpayers’ investment to date. “Taxpayers have been providing immense subsidies to Regeneron to support the development of its mAb cocktail, so it’s been a low-risk endeavor for Regeneron,” Knievel maintained.
“That should play a strong role in pricing considerations. We shouldn't have to pay twice given our early, continuous and substantial investments.”
In its announcement about the $450m manufacturing and supply agreement for Regeneron’s antibody cocktail, the US Health and Human Services Department said that preclinical and clinical development for the therapy have been supported in part through a long-standing agreement between the Regeneron and the HHS Biomedical Advanced Research and Development Authority involving use of Regeneron’s monoclonal antibody discovery platform against influenza and other infectious diseases.
Patients are not expected to bear any cost sharing during the pandemic for antibody drugs purchased by the US government, an HHS spokesperson pointed out.
Private payers – including Humana Inc., Cigna Corp., UnitedHealth Group, and Blue Cross Blue Shield – have committed to waive cost-sharing payments for treatment related to COVID-19 for plan members, and HHS is using a portion of the $100bn Provider Relief Fund to reimburse healthcare providers, at Medicare rates, for COVID-related treatment of the uninsured.
President Trump is also emphasizing that patients will receive free treatments, posting a video to Twitter on Wednesday evening that calls the Regeneron product he received a “cure” and also mentions Lilly’s product.
Lilly May Aim To Avoid ‘Cost Plus’ Through Tiered Pricing
Lilly CEO David Ricks provided some insight into how the pharma is thinking about pricing of the antibody therapies on the call announcing the firm’s antibody submission and data.
“We do want to make sure that patients have no or very, very low out-of-pocket costs anywhere in the world to receive this therapy should it be approved,” Ricks said. “I would say on pricing, a couple of other things come to mind. The concept of doing a cost or cost plus something is a difficult one because, of course, defining cost is a difficult exercise, particularly given the R&D situation where it's front-loaded, it's at risk, [and] if the therapy fails, how do you account for those costs, etc. So, we're working through that.”
Cost-recovery pricing was among the benchmarking options that the Institute for Clinical and Economic Review offered over the summer in a white paper aimed at getting policymakers to consider the pricing of vaccines and treatments for COVID. (Also see "Pricing In ‘Exceptional’ Times: ICER Aims To Shape US Policy For Novel COVID Drugs, Vaccines" - Pink Sheet, 5 Jul, 2020.)
“The one overriding principle that we've decided on is that whatever we end up charging, it should create value for society beyond Lilly,” Ricks continued. He said Lilly is considering a tiered pricing scheme in which a country’s ability to pay, based on gross domestic product per capita or another metric, would be applied. The pharma is also talking with philanthropic groups about providing the therapies in poorer nations, the exec added.
Joseph Haas contributed to this report.