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Biotechnol Healthc. 2012 Fall; 9(3): 7–8.
PMCID: PMC3474459

ASCO: The Science Was Grand, But What Will Payers Think?

This year’s meeting of the American Society of Clinical Oncology was a showcase for amazing technological advances in the fight against cancer. Notably, presentations on immunotherapy and specialty drug combinations illustrated a new level of sophistication in oncology care. It’s enough to make physicians and patients hopeful — but managed care payers had to be watching with just a bit of trepidation.

Most major presentations at ASCO (table, page 8) focused on targeted vehicles for stopping the spread of metastatic cancers. GlaxoSmith-Kline (GSK) presented data on two “nibs,” dabrafenib and trametinib, that improved progression-free survival (PFS) in patients with metastatic melanoma. Roche validated the hype about T-DM1, touting a study in women with metastatic breast cancer that showed an antibody-drug conjugate really can work. And Bristol-Myers Squibb showed off early-stage findings of a promising immunotherapy that reduced tumor size in previously treated patients with metastatic melanoma, non-small cell lung cancer, and renal cell carcinoma.

Selected presentations at ASCO 2012
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Until now, biotechs “have not faced an enormous number of challenges from payers,” says Jill E. Sackman, DVM, PhD, at Numerof & Associates Inc.

Nobody’s pretending that any of this will come cheap — or that payers won’t balk.

“Reimbursement challenges will remain unless the drug companies dramatically lower the cost of their products,” says Harish Dave, MD, MBA, vice president and medical head of oncology and hematology at Quintiles. Dave is responsible for medical oversight of clinical trials conducted by Quintiles. “This has the potential for getting worse, not better, because at ASCO we saw more discussion of combinations of novel targeted agents.

“As single agents, these are very expensive. Now, do you want to put two really expensive drugs together? Yes — it improves your patient’s overall survival [OS] or response rate. But does it make enough of a difference to justify the expenditure? That’s an open question.”

Premium pricing

Dave’s point about the use of targeted agents in combination underscores the complexity of beating a tenacious disease. We’re learning that fighting cancer effectively may mean going after multiple targets.

“These things are far more complex than repairing one defect in a particular pathway,” says Jill E. Sackman, DVM, PhD, a senior consultant at St. Louis-based Numerof & Associates Inc. who works with payers, providers, and life sciences companies on commercialization prospects. “Increasingly, fighting cancer will require multiple products or a single injection that has multiple drugs in it that target multiple pathways.”

Because of costs, payers want to know that biotechs are getting those targets right. When oncology products are released, says Sackman, the subpopulations in whom those products will be most effective is not well defined. “I’ve heard payers say, ‘They do their experimentation on the payer’s dollar,’ and [after FDA approval] they start to define the populations that are going to respond optimally to these products.”

The multiple-target approach may have merit, but payers will demand persuasive evidence to support it.

“The first area where that might come to a head is melanoma, where we see BRAF and MEK inhibitors being combined,” says Dave. On the heels of the data presented at ASCO for dabrafenib, which targets the BRAF V600 mutation, and trametinib, an inhibitor of MEK protein, GSK is studying the two in combination in a phase 3 head-to-head trial against vemurafenib (Zelboraf). “I’m sure that if [a combination indication] gets pushed through the FDA, it will become a huge issue: How will we manage the cost and is it justified for what we get?”

A similar issue may play out with T-DM1, which relies on the targeted antibody trastuzumab (Herceptin) to deliver a chemo agent, DM-1, to the right spot — sparing the patient much of chemotherapy’s collateral damage. Roche is also conducting phase 3 trials of T-DM1 in combination with pertuzumab (Perjeta), which won FDA approval in June.

“What Roche is doing — and it’s a brilliant strategy — is building two molecules together, extending Herceptin’s life span through T-DM1,” says Sackman. But payers will challenge Roche — or, for that matter, GSK — to build a value story that justifies premium pricing for two specialty drugs together. “The question for managed markets is are they going to be willing to pay more for these products as a cocktail than for the individual products?”

Redefining value

That may depend on which outcomes make up a product’s value story. “For high-ticket items, where outcomes are somewhat nebulous and you move away from hard data like OS to softer data like PFS, payers begin to get nervous,” says Dave. No drugs approved for metastatic cancers have shown so much as a 5-month improvement in OS, so payers are interested in the quality of any additional months — and the associated costs.

Until now, Sackman believes, biotech companies, especially those focused on oncology, have been insulated from the pressures payers place on their small-molecule counterparts. “They have not faced enormous challenges from payers. They have fabulous science but haven’t had to develop muscle strength in what it takes to build a value story along with the clinical story.”

With therapeutic know-how and costs both reaching new heights, that may soon have to change.

Articles from Biotechnology Healthcare are provided here courtesy of MediMedia, USA