Last fall, I wrote in Forbes about U.S. based biotechnology manufacturer Amgen announcing it was slashing the list price of its breakthrough cholesterol-lowering drug Repatha by 60% in an effort to improve access and affordability for patients.
Too many patients who had been prescribed the drug were walking away from the pharmacy empty handed because of sticker shock over their co-insurance payment. By lowering the list price, Amgen could significantly lower the patient’s co-insurance payment and/or drug plans could move the drug to a more affordable fixed-dollar payment category.
Repatha, a biologic in a new class of medicines called PCSK9 inhibitors, is an innovative medicine for people with high cholesterol who are at risk for heart attacks and strokes.
Sanofi and Regeneron recently announced they will also reduce the list price of their competing drug, by 60%—highlighting similar access challenges because of the high out-of-pocket costs for patients. In response, the American College of Cardiology tweeted, “Sanofi & Regeneron’s efforts today & Amgen’s announcements last year to lower the $$ of PCSK9s & increase transparency for patients is a big step toward removing barriers to access & improving heart health for many patients.”
This marks an important milestone in Medicare Part D where competing companies have voluntarily made significant list price reductions for an entire class of innovative medicines.
This would seem to have been an announcement celebrated as answering a major consumer and political demand for lower drug prices. So where are we today, months after Amgen’s announcement?
A recent article by John Wilkerson with Inside Health Policy explains, “Even though the monthly cost of Repatha is below the $670-per-month threshold for specialty tiers in Part D, the drug is available to only 6% of Medicare beneficiaries on brand tiers with copays of $22 to $50, and 56% of beneficiaries must access the drug on specialty tiers, where coinsurance is between 25% and 33%.”
So while patients whose Part D plans require coinsurance for Repatha are likely experiencing some savings from the lower list price, until plans/PBMs move patients from high-cost specialty tiers to fixed-dollar copayment tiers, Medicare patients will continue to pay more.
In an earlier conference call with investors, Amgen said monthly copayments for Medicare payments before the price cut ranged from $280 to $370 and that as many as 75% of patients walk away or never fill the prescription. The new list price was expected to reduce patient costs to $25 to $150 a month.
I wrote an “explainer” yesterday about the Trump administration’s proposal to replace the current system of rebates paid by drug manufacturers to benefit managers with direct discounts for patients at the pharmacy.
The proposed rule published by HHS in January is designed “to lower prescription drug prices and out-of-pocket costs by encouraging manufacturers to pass discounts directly on to patients and bring new transparency to prescription drug markets.”
The Trump Administration and HHS are pulling back the curtain on complex deals involved in the drug purchasing chain, targeting the “rebates” that flow through the $325-billion-a-year prescription drug spending pipeline. Drug companies pay rebates (and an administrative fee) to Pharmacy Benefit Managers (PBMs) in exchange for priority placement on drug “formularies”—the list of drugs the plans cover.
The rebate reform proposal has the “potential to be the most significant change in how Americans’ drugs are priced at the pharmacy counter, ever, and finally ease the burden of the sticker shock that millions of Americans experience every month for the drugs they need,” HHS Secretary Alex Azar said.
In response to questions about why one PBM had not improved access and affordability for PCSK9s by moving Medicare patients to more preferred co-payment categories or “tiers,” Express Scripts spokesman Phil Blando told Inside Health Policy there are bureaucratic impediments:
“Because both versions of Repatha share an identifier used for formulary submissions to CMS, plans currently cannot submit unique tier placements for each available NDC, while both remain marketed,” Blando explained. “Current tier placement reflects the latest CMS approved formulary submission of this identifier in a Specialty tier. We have reached out to CMS for clarity and are awaiting a response on how to proceed with formulary placement for both versions of the drug.”
This confusion exists for patients too. The Familial Hypercholesterolemia (FH) Foundation recently wrote of the challenges that patients are having in accessing these medicines at more affordable prices.
“The FH Foundation welcomes the pricing transparency and lower list price…Unfortunately, the FH Foundation continues to hear from individuals with FH who are on Medicare Part D plans that they face out-of-pocket costs over $500 to as high as $1,379,” it wrote in a blog post.
“This suggests that Medicare Part D insurance plans have not yet adopted the newer lower price available for Repatha and continue to charge patients a coinsurance based on the previous higher list price…The FH Foundation encourages insurance plans and pharmacy benefit managers [to] adopt the lower list price as soon as possible and pass savings on to patients. Lives depend on it.”
With this uncertainty in the marketplace and the clear message that patients want access to lower priced medicines, the administration could step in and issue guidance to plans and PBMs about how they should respond to list price reductions in the marketplace in terms of formulary placement.
This could accelerate access to the lower prices for Medicare patients, and it would a tangible first step in demonstrating savings for patients as the administration works towards the larger macro-level reforms it is proposing with its rebate rule.