Monday, May 7, 2018
The World of Pharmaceutical Pricing is Changing- Praluent Isn't Just a One-Off
The American Journal Managed Care (AJMC) recently published an excellent article about a major pricing for access deal for Regeneron's Praluent, an antibody to PCSK9, which is effective in the treatment of hypercholesteremia in patients who with inadequate response to, or inability to tolerate, statins. In exchange for a DEEP discount in price, Express Scripts has agreed to put Praluent on its National Preferred Formulary List, allowing relatively unhindered access to the drug for the 25 million patients whose insurers use Express Scripts for their formulary management. Readers of this blog know that pharmaceutical companies, like all businesses, charge what the market will bear. This deal reflects a shifting context for "what the market will bear." As the AJMC pointed out, the agreement comes in the wake of an ICER (Institute for Clinical Economic Review) study which validated the clinical benefit of Praluent while pointing to an economic value significantly lower than Regeneron's price for Praluent. The problem with the market for pharmaceuticals has always been the lack of adequate information. While the generation of better information is still costly, the value of that information is becoming overwhelmingly clear. That is why in a world in which both insurers and pharmaceutical companies are under fire for the cost of health care, we will increasingly see studies that provide more of the information the market needs. While in this instance the study resulted in a signifiantly lower price, some costly drugs will indeed prove to be worth their price. I expect both insurers and pharmaceutical companies to increase their funding for such studies. Praluent is not just a one-off, it is a milestone on the road to the future of healthcare.