Specialty Pharmaceuticals for Hyperlipidemia — Impact on Insurance Premiums

Schulman KA, Balu S, Reed SD.
Specialty Pharmaceuticals for Hyperlipidemia — Impact on Insurance Premiums. N Engl J Med 2015;Oct 7:[Epub ahead of print].

The following are key points to remember about specialty pharmaceuticals for hyperlipidemia and the impact on insurance premiums:

  1. The Food and Drug Administration (FDA) approved the proprotein convertase subtilisin-kexin type 9 (PCSK9) antibody drugs alirocumab and evolocumab for treatment of hyperlipidemia as an adjunct to diet and maximally tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia (HeFH) or clinical atherosclerotic disease who require additional lowering of LDL-C. Evolocumab was also approved for homozygous FH (HoFH).
  2. The broad indication and size of the population that would be eligible differs from the pricing models that have been used for drugs that benefited relatively limited populations (orphan disease or ‘potentially curative outcomes’ such as Hepatitis C). Initial pricing for alirocumab was $14,600 per year despite the label stating ‘the effect of alirocumab on cardiovascular morbidity and mortality has not been determined.’
  3. Post-hoc analysis of both drugs showed about a 50% relative reduction in cardiovascular events (CVEs) in the cohorts whose absolute risk was only 2-3%. With a 100% reduction in CVEs at an average of $20,000 per event, the annual cost reduction would be at most $600.
  4. The expected total annual cost of the drugs is in the billions, and who will bear the costs? Currently, it will be primarily considered part of the drug benefits of self-administered insurance plans, and with an assumption of patient cost sharing, which is estimated at 20-25%. It is also assumed the manufacturers will provide coupon programs for non-Medicare patients. The balance will be supported via health insurance premiums.
  5. If 5% of the estimated 27% of the US adults 40-64 years of age with high LDL-C levels were eligible for the PCSK9 antibody therapy, annual insurance premiums would increase by $124 for every person in the insurance pool. And taxpayers would have the added burden for paying for the costs in the Medicare Part D program.
  6. Presently, specialty pharmaceuticals have enormous pricing (e.g., $84,000 for Hepatitis C, $100,000 for some chemotherapies, and $300,000 for cystic fibrosis), reflecting little ability for the payer to restrain the monopoly of pricing powers of suppliers known as price inelasticity.
  7. Is there a remedy for reducing the pricing power of the pharma industry? At issue is the willingness of pharma to invest in novel drug development without an assurance of adequate profit. The current pricing mode is based on the fact that 84% of prescriptions are filled with generic products and pharmaceutical firms rely heavily on novel therapies for future revenue expectations. Without the potential for high returns, capital might not be available for further innovations.
  8. Managing the downside risk of inadequate capital for future drug development needs to be considered as healthcare payers work toward a more sustainable pricing model.

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