Express Scripts sees opportunity to lower cancer treatment cost

Last Updated: 2015-01-13

By Susan Kelly and Bill Berkrot

(Reuters) - Express Scripts, the largest U.S. pharmacy benefit manager, on Tuesday said cost savings on expensive cancer treatments could be achieved if the company were involved earlier in the decision-making process.

Express Scripts, which has become more aggressive in negotiating discounts on drugs for insurance plans and employers, in December stopped covering Gilead Sciences Inc's hepatitis C treatments after lining up a cheaper price for AbbVie's newly-approved alternative.

AbbVie's Viekira Pak (ombitasvir/paritaprevir/ritonavir; dasabuvir) was approved in December by U.S. regulators and the company set a list price of $83,319.

Gilead's Sovaldi (sofosbuvir) and follow-up combination pill Harvoni (ledipasvir and sofosbuvir) have been shown to cure hepatitis C in more than 90% of patients. But Express deemed the more than $90,000 price for 12 weeks of Harvoni treatment unaffordable.

The move reignited investor concerns that drugmakers will have to bow to pricing pressure from U.S. insurers and lawmakers over novel medications whose cost can reach hundreds of thousands of dollars for some diseases.

For cancer patients, treatment decisions typically go through health insurance plans first, and medicines are not changed once people have begun their regimens, Express Scripts Chief Executive George Paz said at the J.P. Morgan Healthcare conference in San Francisco. He said PBMs should be included in the decision-making process at a much earlier stage.

"The big opportunity out there is really in cancer," Paz said. "If we can get out in front of that, that is a huge opportunity."

Paz said he is also focused on a new crop of cholesterol-lowering drugs expected to hit the market this year, and is talking to companies about market share, positioning and pricing.

"They are pretty astonishing, but they are also very expensive," Paz said of the drugs which target the proprotein convertase subtilisin/kexin type 9 (PCSK9) protein. Manufacturers include Amgen Inc and Regeneron Pharmaceuticals Inc in partnership with Sanofi. The key is to determine which are real breakthrough treatments and which are "me too" drugs, Paz said.

Amgen said it was talking to payers about its PCSK9 inhibitor evolocumab, and believes they can only exclude a drug from formularies if there is no clinical difference between rival medicines.

"If not, payers will have to leave choices to physicians," said Tony Hooper, Amgen's head of commercial operations.

Regeneron Chief Executive Officer Len Schleifer was asked if he was concerned about Paz's comments that PCSK9 drugs were in his sights.

"It's not a worry. It's a reality that we will deal with," Schleifer said. "I think there will be fair pricing and healthy competition in the marketplace."