ViewPoints: Express Scripts fires yet another warning shot to pharma, with oncology cited as long-term target for cost savings

Presenting at the annual JP Morgan Healthcare conference in San Francisco on Tuesday, Express Scripts CEO George Paz sought to maintain momentum gained by the pharmacy benefit manager (PBM) in recent weeks by advocating the company's role in reducing US healthcare costs and citing a number of new drug classes as ripe for aggressive price negotiation.

Paz once again called out the PCSK9 inhibitors as a cost-saving opportunity for Express Scripts and other PBMs, and also spurred debate as to how insulated the oncology market will be from containment trends by suggesting that cancer products are fair game, including the new generation of PD-1/PD-L1 inhibitors - see also Spotlight On: Where will US payers strike next? and Spotlight On: HCV may be the tip of the cost management iceberg for Express Scripts.

Insight, Analysis & Opinion

Reflecting just how loud a voice the PBMs have gained in recent weeks, Paz's presentation triggered a 1.7-percent decline in Regeneron Pharmaceuticals' share price on Tuesday. The company – collaborating with Sanofi – is developing the PCSK9 inhibitor alirocumab, which is expected to reach the market alongside a competing product in the same class from Amgen (evolocumab) later this year.

Speaking later on Tuesday afternoon at the same conference, Regeneron CEO Leonard Schleifer countered Paz's comments by suggesting that the industry and PBMs shared the same goal in wanting to secure patient access to new therapies. Schleifer also added, however, that the availability of multiple doses for alirocumab may confer a potential pricing advantage for the Regeneron/Sanofi product over evolocumab.

Last week, Regeneron and Sanofi unveiled top-line data demonstrating that once-month dosing of alirocumab demonstrated similar efficacy to dosing every two weeks, confirming that the dosing profiles of both drugs are broadly comparable. While cardiologists polled by FirstWord have previously acknowledged the potential barrier that injectable delivery will pose to uptake in an area historically dominated by oral products, they have also played down the significance of dosing frequency. This supports the view of some analysts that formulary positioning will be dictated by price alone.

Looking to play a longer game in the PCSK9 inhibition space, Pfizer also announced at the JP Morgan meeting on Tuesday that it plans to initiate clinical studies of an oral PCSK9 inhibitor later this year. The company expects to launch its injectable therapy (bococizumab) a few years behind Amgen and Regeneron/Sanofi; although Pfizer management has consistently argued that outcomes study data for the product – also cited by cardiologists as a likely catalyst for increased uptake – will be published at a similar time to that for alirocumab and evolocumab, which could close any competitive gap.

Supported by Pfizer's strong legacy in the dyslipidaemia space, however, an oral PCSK9 inhibitor could offer significant potential to patients, cardiologists and ultimately payers if convenience can be translated in to improved adherence rates - see also ViewPoints: Dezima CEO touts 'best-in-class' CETP inhibitor.

The aim of Express Scripts is clearly to look further afield for price discounting by utilising the threat of formulary exclusion. Paz cited the "bolus" of new cancer therapies currently progressing through the industry pipeline as a major opportunity for PBMs; a statement that provides meaningful risk to the bullish assertion from many industry analysts that oncology will remain largely insulated from such threats.

Paz's comments regarding the longer-term opportunity to target cancer medications for price cuts spurred considerable debate among industry commentators on twitter; one suggestion made is that should the PD-1/PD-L1 inhibitor class be targeted, would it also be feasible for PBMs to target the increasingly well populated field of CAR-T cancer therapies, which are effectively now viewed by investors as the next stage of evolution in the immuno-oncology boom. The counter argument is that not only will cost control in the cancer market be limited to a number of special cases where me-too competition is higher, but that other battles will be easier for the PBMs to win and thus attention will initially be focused here.

Of less comfort to the industry is the reality that the PD-1/PD-L1 market could quickly accumulate 'me too' status as other products reach the market. While the industry has long perceived cancer to be most protected therapeutic segment a crowd mentality regarding investment means that a potentially more conducive environment for cost savings has actually been fostered partly by manufacturers themselves.

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