Friday Five – The week in pharma

Medicare dips a toe into the US drug pricing debate

If a tweet from Hilary Clinton was enough to send biopharma stocks into a tailspin last year, it is perhaps surprising that new proposals by the US Centers for Medicare and Medicaid Services (CMS) have not had a more significant impact on sentiment. The CMS is clearly looking to take the baton from its counterparts in the private sector as it seeks to place limits on the reimbursement of certain drugs.

Further analysis ViewPoints: First step is the hardest – CMS laying foundation to shake-up buy-and-bill with 5-year pilot programme

A five-year experiment could spell the end of the buy-and-bill market used to procure drugs administered by physicians under Medicare Part B, by replacing it with a managed care system. Most significantly, one proposal is the creation of an organisation tasked with evaluating the quality of data supporting the use of individual drugs. While experimental in nature, the proposal does cite a number of tools that could be used, including reference pricing, indication-based pricing and outcomes-based risk-sharing agreements.

In the more immediate term, a decision to change the reimbursement formula used under Medicare Part B appears designed to remove any financial incentive for a physician to prescribe a more expensive drug; a change that could increase usage of self-injectable biologics (over those infused in a physician's office) and make it more difficult for pharmaceutical companies to implement price increases. Both elements of the CMS proposal could hold far reaching implications for biosimilar products.

See also Spotlight On Interview: Richard Bergström – drug access increasingly tied to outcomes

European regulator outlines proposals for faster approval of novel drugs

If the CMS – much like US pharmacy benefit managers – appears to be borrowing cost-containment strategies from Europe, then it is good to see that this is a two-way relationship. Clearly inspired by the success of the FDA's breakthrough therapy programme, the European Medicines Agency unveiled its similar Priority Medicines (PRIME) scheme this week.

Established in 2013, FDA breakthrough therapy designation has been granted to just over 100 products, at a rate of approximately one in three of every request. The EMA expects to receive around 100 applications to the PRIME scheme every year.

Further analysis ViewPoints: Taking the FDA's lead, Europe primes itself for faster drug approvals

Victoza joins an exclusive club

Novo Nordisk's Victoza has become the second diabetes treatment and first GLP-1 agonist to demonstrate a cardiovascular benefit in a dedicated outcomes study, the company confirmed late last week. Top-line results from the LEADER study follows positive data from the EMPA-REG study published last year, which demonstrated a cardiovascular benefit for Boehringer Ingelheim and Eli Lilly's SGLT-2 inhibitor Jardiance.

Data from the LEADER study provides a timely boost to Novo Nordisk; the company recently confirmed positive data from two studies demonstrating a superior hypoglycaemia profile for its basal insulin Tresiba versus current market leader Lantus (marketed by Sanofi). However, leading US pharmacy benefit manager Express Scripts questioned the strength of data to justify improved access for Tresiba, highlighting the continued pricing pressure now exerted on the US diabetes market. Experts expect Victoza's cardiovascular benefit to provide Novo Nordisk greater pricing leverage among the GLP-1 agonist class.

Further analysis KOL Views: Usage of GLP-1 agonists, SGLT-2 inhibitors should increase on back of positive cardiovascular data for Jardiance and Victoza; Tresiba's hypoglycaemia benefit versus Lantus viewed as minimal and Physician Views: Victoza demonstrates a cardiovascular benefit – what impact on the diabetes market?

AbbVie lays another cornerstone

AbbVie's efforts to broaden its R&D pipeline, in order to ensure sustainable long-term revenue growth beyond its flagship Humira franchise (2015 sales of $14 billion), continue – but the shadow of Humira's success looms large.

When AbbVie acquired oncology specialists Pharmacyclics last year, management spoke about the opportunity for lead asset Imbruvica to mimic the success of Humira given its potential use across multiple indications; partially validated this week following approval in first-line chronic lymphocytic leukaemia (ViewPoints: AbbVie's big bet in cancer secures first-line leukaemia approval, but KOLs critical of study design).

The $595 million AbbVie shelled out this week to in-license co-development rights for Boehringer Ingelheim's psoriasis treatment BI 655066 may not be quite as eye-watering, but it is nevertheless a sizeable amount for a drug shortly progressed into Phase III studies, which – if successful in pivotal-stage trials – will enter a crowded market. AbbVie suggested that BI 655066 could emerge as the most effective psoriasis treatment available, and FirstWord's own research reveals that key opinion leaders are impressed with Boehringer Ingelheim's Phase II data.

With mid-stage studies ongoing in Crohn's disease and asthma, and soon expected to commence in psoriatic arthritis, it would appear that BI 655066 is viewed by AbbVie as another cornerstone franchise – this time in the immunology market.

Further analysis ViewPoints: With inflammatory and oncology locked down, AbbVie seeks a cornerstone franchise in the immunology market

The times they are a changing

Big Pharma's exposure to key patent expiries has declined markedly in recent years and in many cases threat of the patent cliff has been replaced by burgeoning R&D pipelines and regulatory initiatives designed to accelerate approval of novel therapies. Tellingly, the European Generic and Biosimilar Medicines Association (EGA) rebranded itself this week as Medicines for Europe.

Nevertheless a notable generic approval occurred this week at the hands of the FDA, with the agency greenlighting the first generic version of Pfizer's erectile dysfunction treatment Viagra, which will be sold – exclusively for a period of 180 days – by Teva. Viagra generated global sales of $1.7 billion in 2015 and arguably remains the world's most recognisable pharmaceutical brand.

As Teva looks to gain a foothold in this market, however, sales of Valeant Pharmaceuticals' female hypoactive sexual desire disorder (HSDD) treatment Addyi – frequently, if inaccurately, labelled the 'pink Viagra' – have come under scrutiny. At noted in Forbes, an annual sales run rate of $11 million for Addyi is well below the $788 million that Viagra generated during its first 12 months on the market. Not that Addyi was expected to match this benchmark, but early sales are nevertheless below expectations and underperforming the hype that matched approval of the drug last year (and prompted Valeant's now expensive looking acquisition of Sprout Pharmaceuticals).

While the purchase of Sprout may have contributed to Valeant's rising debt, however, one suspects, that Addyi's performance is the least of the company's current worries.

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