SNY Sanofi

By Joseph Walker 

The makers of an expensive cholesterol-lowering drug plan to offer discounts of up to 69% in exchange for insurers and pharmacy-benefit managers expanding their coverage of the medicine to more patients.

Regeneron Pharmaceuticals Inc. and Sanofi SA said they will seek to renegotiate their contracts with insurers by offering rebates and discounts for the drug, called Praluent, that would bring its U.S. net price within a range of $4,500 to $8,000 annually per patient, down from its list price of $14,600.

The net price range is based on a cost-effectiveness analysis by an independent nonprofit group called the Institute for Clinical and Economic Review. The group's analysis incorporated new clinical trial data released on Saturday showing that Praluent reduced a patient's risk of dying by 15% compared with placebo in a large trial of patients whose cholesterol exceeded medical guidelines despite already taking the standard treatment of statin drugs.

Regeneron and Sanofi's offer of a steep price cut reflects the intensifying pricing pressures that some drugmakers face. Insurers have placed significant restrictions on paying for Praluent because of its price, such as requiring patients to have tried alternative treatments and having doctors submit voluminous paperwork proving their patients need the drug. The result is that the vast majority of patients prescribed the drug don't actually fill their prescription, says Regeneron CEO Leonard Schleifer.

ICER's analysis "represents a good faith assessment of [Praluent's] value to patients," Dr. Schleifer said in an interview. "Enough is enough. We're willing to work in their [price] range, providing that payers agree to reduce their burdensome barriers for patients."

When Praluent was first launched in 2015, it was the first of a new type of a cholesterol-lowering drug that block a protein called PCSK9. Analysts and investors expected drugs in the class, which also includes Amgen Inc.'s Repatha, to quickly become blockbuster products with $1 billion or greater in annual sales.

Instead, the drugs turned out to be a commercial disappointment after pharmacy benefit-managers, which negotiate discounts from drugmakers and decide which medicines to cover, clamped down on who could receive the drugs. According to an Amgen study, just 35% of patients prescribed a PCSK9 drug had the prescription approved by their insurers.

Regeneron and Sanofi's Praluent had U.S. sales of $131.4 million last year; Amgen's Repatha had U.S. sales of $225 million.

The exact discount that insurers receive will depend on how much they relax restrictions on who gets the drug, Dr. Schleifer said. The companies are specifically asking that insurers loosen restrictions only for patients at the highest risk of death -- those who have had a heart attack or other serious coronary event in the past year, and whose cholesterol levels exceed the threshold recommended by doctors despite taking statins.

The risk of death to those high-risk patients was cut by 29% in the clinical trial presented on Saturday at the annual scientific meeting of the American College of Cardiology. The trial is the first to show a statistically significant reduction in deaths by a PCSK9 drug, compared to placebo.

Regeneron and Sanofi shared the new data with ICER in advance of the Saturday presentation. The group found that a net price of $4,500 to $8,000 per year would be cost-effective if the drugs were used only by the subgroup of patients whose risk of death was reduced by 29%. If the drugs were used more broadly to treat all patients included in the trial, the cost-effective price would be in a range of $2,300 to $3,400 annually, ICER said.

Regeneron and Sanofi's move to adopt ICER's recommended price range reflects the growing scrutiny of drug costs, and calls for pharmaceutical companies to price their products according to their value to patients, rather than what the market will bear, ICER President Steven D. Pearson said in an interview. "This never would have happened three, four years ago," Mr. Pearson said.

Whether other companies also adopt ICER's recommendations will depend on whether it moves the needle for Praluent sales, he said. "The conversation that needs to happen is, can value-based pricing be successful in the marketplace. They have to show this is a successful business model."

It's unclear if the discounts will be enough for pharmacy-benefit managers. Express Scripts Holding Co., one of the largest PBMs, is "anxious to see the new data and re-examine our criteria to see if they're still relevant," said Steve Miller, the company's chief medical officer.

Write to Joseph Walker at joseph.walker@wsj.com

(END) Dow Jones Newswires

March 10, 2018 18:00 ET (23:00 GMT)

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