Today’s Managing Health Care Costs Number is $14,600
There’s considerable angst among employers and Pharmacy Benefit Managers about the new PCSK9 agents – injectable biologic medicines that drive LDL (bad) cholesterols down to incredibly low (healthy) levels, even in those with genetic abnormalities that bespeak early heart attacks.
The worry is that these new drugs will cost over $14,000 a year. Statins – drugs like generic atorvastatin (Lipitor is the brand name) generally cost about $50 a year – so this is a steep price hike if the drugs are widely used.
Gina Kolata has an article in yesterday’s New York Times which shows the importance of context in pharmaceutical price setting. The article focuses on two patients who suffer from familial hypercholesterolemia – one of whom gets apharesis (a lot like dialysis) once a month because his LDL level is so high. Even with the massive inconvenience of this treatment, his risk for premature cardiovascular disease remains incredibly high. The cost of the apharesis is $8000 a month. Suddenly, $14,000 a year and the use of a tiny needle twice a month seems like a great deal!
This is the way the pharmaceutical industry would like to have us view the price of these new medications. There are currently 600 people in the US on apharesis for high LDLs – and perhaps as many as a million with the disease who are currently not appropriately treated. The approval for this new set of medications is likely to focus on those with familial hypercholesterolemia –and this isn’t a small market. (A million people at $14K each is $14 billion a year in revenue – even if only a third pay for this the drug class would still be a blockbuster) .
But the public policy worry is that the use of these medications could be far more widespread. Current recommendations would have about 40% of American adults on a cholesterol lowering medication. If 10% of those with risk of heart attack of 7.5% or more in the next ten years were prescribed PCSK9 inhibitor drugs, that would be a whopping additional 10 million users.
I have heard about a new class of drugs that will bankrupt the system for years- and the drugs whose prices astonished us a few years ago often seem spretty routine now. (For instance, I remember when a local health plan set up a special pooled risk fund to pay for mevacor (Lovastatin), the first statin, which was selling for the astonishing price of over $1 a pill.) I generally dismiss worries that the system will fall apart – the reasons why PCSK9 medications will not be widely used among those without familial hypercholesterolemia include:
· Current prevalence of drug plans with high cost sharing, so that patients will be reluctant
· Medications require an injection, which is a higher barrier than a pill
· PBMs will institute prior authorization –and make it a hassle to obtain these medications for those at lower risk
· The medications are new – and they are biologics – so it’s possible that there will be additional complications identified when they are used outside of clinical studies.
Still – identifying and pricing drug for one (rare and expensive) condition and then seeing it used for much more common (and less expensive) conditions is a common approach to maximize pharmaceutical company returns. This is done with antibiotics, antipsychotic drugs, and sometimes even drugs for orphan diseases. Once the price is set high, enlarging the market is unlikely to lead to lower prices, but it will lead to lower value for each prescription filled.
Drugs like the PCSK9 inhibitors offer a substantial clinical advance for a small group of people, but represent a further challenge to health care affordability for us all.
