Praluent Pricing: Collaboration With ICER Sets A New Standard

Sanofi/Regeneron reveal plans to lower price of PCSK9 blocker Praluent to match ICER's updated recommendation, following assessment based on new outcomes data. Decision sparks debate across industry and raises questions about setting precedent on pricing for the future.

The release of the long-awaited outcomes trial for Sanofi/Regeneron Pharmaceuticals Inc.'s PCSK9 inhibitor at the American College of Cardiology Scientific Sessions was a big news event for the cholesterol-lowering field, but the announcement that the firms will lower the price of Praluent (alirocumab) in the US in line with a recommendation from the Institute for Clinical and Economic Review (ICER) stands out for the potential to set a precedent for the pharmaceutical industry. 

The two drug partners announced March 10 they would lower the price of Praluent to a level ICER deemed cost effective, based on an updated assessment incorporating new data from the ODYSSEY cardiovascular outcomes trial, which was released at ACC. The lower price will be available to payers who agree to remove access restrictions and are willing to reimburse Praluent in a "straightforward way."

What's striking about the announcement is the way Sanofi/Regeneron worked proactively with ICER under the group's established "in confidence" procedures to provide ICER with early access to the ODYSSEY data and facilitate a revised assessment of alirocumab's value. ICER, on the other hand, agreed to prioritize the review to work with Sanofi/Regeneron's timeline for releasing the data at ACC – allowing for the simultaneous news announcements.

The case of Praluent represents a new paradigm for the pharmaceutical industry when it comes to working with the independent drug pricing reviewer to determine a drug's worth – and then accepting the result. To be certain, the drug manufacturers had an incentive in this instance to lower the price of Praluent because sales of the drug have been so much lower than originally forecast, mainly because of access restrictions. Praluent and Amgen Inc.'s Repatha (evolocumab) were expected to represent a new blockbuster class of cardiovascular medicines when they launched in 2015, but the sales haven't materialized. (Also see "PCSK9 Sales Still Slow, But May Get Boost From Label, Guideline Changes" - Scrip, 4 Aug, 2017.)

This is the kind of shift that has to start somewhere," Memorial Sloan Kettering's Peter Bach said. "I think it's now incumbent on the payers to respond appropriately."

Management at both Sanofi and Regeneron insisted during a same-day conference call that they aren't setting a new precedent in respect to drug pricing.

"I don't think we've set any precedent that ICER is going to price our drugs," Regeneron CEO Leonard Schleifer said in response to pushback from analysts. "We thought it would be a good idea to see what ICER had to say and see whether or not it could overlap with what we had to say about value." In this instance, he said it made sense because, "You would have to have your head in the sand, deep in the sand, to think that doctors aren't concerned about the price of the product."

Sanofi CEO Olivier Brandicourt agreed: "We are trying here clearly to work with them, but definitely not setting a precedent by which they are fixing our net prices."

ICER Hopes To Conduct More Collaborative Assessments

ICER applauded Sanofi and Regeneron for being at the forefront on value-based pricing. "We commend the two manufacturers," President Steven Pearson said in an interview. "What is happening is a recognition that we are in a new landscape for drug pricing and an independent assessment of value and making that a core part of thinking about the pricing and the coverage is a far better place for patients and our healthcare system than where we were three or four years ago," he said.

Sanofi and Regeneron also worked closely with ICER on the pricing of the atopic dermatitis drug Dupixent (dupilumab), ahead of the launch in 2017, and landed on price that many payers agreed was reasonable for a novel biologic. (Also see "Sanofi, Regeneron Setting 'New Paradigm' With Dupixent Pricing In US?" - Pink Sheet, 4 Apr, 2017.) Nonetheless, Pearson acknowledged that the alirocumab review raised the bar in terms of the public acknowledgement of the collaboration with ICER. While other drug makers have expressed interest in working with ICER in a similar way, the Praluent and Dupixent reviews so far are the only specific examples. "Our door is open," he said.

When ICER was approached by Sanofi/Regeneron about reviewing the ODYSSEY data and completing an assessment ahead of ACC, Pearson said they decided it would be helpful to stakeholders to "turn on the jets." The group accelerated the preliminary part of its review in just over one week, although the formal eight-week review is still ongoing.

If adoption of ICER's pricing recommendations becomes more commonplace it would raise questions for the industry. For example, are drug manufacturers giving up too much pricing power to an independent organization? Might payers lose leverage in contract negotiations? And, if drug makers like Sanofi and Regeneron are in harmony on one ICER recommendation, can they turn around and dismiss one they disagree with in the future? 

ICER has been an adversary for the PCSK9 sponsors, repeatedly targeting the class as being overpriced. While the cardiovascular outcomes trials (CVOTs) had been expected to help validate the price point set by Sanofi/Regeneron and Amgen, ICER called for further lowering after examining the data from Amgen's FOURIER outcomes trial. 
(Also see "Repatha Pricing Pressure Might Actually Increase After Outcomes Trial" - Pink Sheet, 14 Jun, 2017.)

Stakeholders Weigh In

Some investors derided the decision. Biotech investor Brad Loncar on Twitter said it was a decision the drug makers might live to regret. "How is Regeneron going to credibly disagree when ICER says their next drug is four times too expensive," he said.

Deutsche Bank analyst Navin Jacob in a research note March 12 said, "We are negatively surprised by the strategy to engage ICER on pricing as this sets a slippery slope precedent that unnecessarily cedes pricing power."

Health policy expert Peter Bach, director of Memorial Sloan Kettering's Center for Health Policy and Outcomes, said the dynamic in this case is one he has long advocated for. Regeneron and Sanofi's decision to reset the price for Praluent reflects the new reality in the post-hepatitis C drug era, he said, where payers are blocking the uptake of drugs they feel are over-priced.

He said now there is a starting point for discussion between the two sides. "This is the kind of shift that has to start somewhere," Bach said. "I think it's now incumbent on the payers to respond appropriately."

Plus, he noted, "a successful negotiation involves all parties being somewhat unhappy."

Asked about the latest developments, Express Scripts Holding Co. said it plans to re-examine its coverage for Praluent. "Overall, we are encouraged to hear Regeneron and Sanofi are willing to reduce the price of this medication to make it more accessible for patients," the pharmacy benefit manager said. 

Praluent and competitor Repatha currently cost around $14,500 year. That's the wholesale acquisition cost, though the companies offer extensive rebates that lower the net price. Amgen has previously said that after rebates and discounts, the net price of Repatha comes in between $7,700 and $11,200 per year.  (Also see "Amgen Says Repatha Outcomes Trial Backs Up Its Pricing Math" - Pink Sheet, 19 Mar, 2017.) Sanofi would not confirm the net price of Praluent, but it has been offering significant rebates. 

In ICER's updated assessment of Praluent, the group set a value-based price of $4,500 to $8,000, net of rebates, for a certain set of high-risk patients defined in ODYSSEY and a lower $2,300 to $3,400 per year price range if the drug were used to treat all patients with an acute coronary event in the past year and elevated cholesterol. The price difference reflects the mortality benefit seen in ODYSSEY in high-risk patients treated with Praluent.  (Also see "PCSK9 Turning Point? Sanofi/Regeneron Dangle Lower Price Carrot For Praluent " - Scrip, 12 Mar, 2018.)

Sanofi/Regeneron said they plan to take a precision medicine approach with Praluent to target efforts on high-risk patients most vulnerable to cardiovascular events.

That could give Praluent an edge over Amgen's Repatha, which did not show a significant reduction in cardiovascular mortality in its outcomes trial, FOURIER. ICER's cost effectiveness review of Repatha recommended a value-based price of $1,700 to $2,200. ICER said the assessment for Praluent does not change the review for Repatha. The cost-effectiveness watchdog is not alone in targeting PCSK9 pricing. (Also see "The Price Is Right: Amgen Defends Repatha At $9,669 Against More Critics" - Scrip, 23 Aug, 2017.)