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Sovaldi’s High Price Reflects a Trend, Not an Exception to the Rule

Report says median prices rising as patient populations shrink

The hepatitis C drug Sovaldi (sofosbuvir, Gilead Sciences) burst onto the market in December 2013, impressing doctors and patients with its benefits and outraging payers and politicians with its price. The drug reached blockbuster status twice over in the course of a single quarter. But instead of being an aberration, a new report suggests that it reflects a trend that has been going on for 5 years and looks to be the new normal.

According to data from EvaluatePharma, the median revenue per patient of the Top 100 drugs has ballooned to $9,400 this year from $1,260 in 2010. That happened as the median patient population size served by a Top 100 drug in 2014 was 79% less than that 5 years earlier — 146,000 compared with 690,000 in 2010.

Part of the reason can be attributed to the patent cliff peak during that period. Patents were lost for the cholesterol treatment Lipitor (atorvastatin, Pfizer), for the blood thinner Plavix (clopidogrel, Sanofi), and for the diabetes drug Actos (pioglitazone, Takeda), to name a few. But other forces are also at play, the EvaluatePharma report suggests. FDA oversight has gotten more demanding, requiring larger, more expensive trials, even as incentives and pricing have favored drugs intended for smaller populations, which can command higher prices.

The report says that the number of Top 100 drugs in 2010 that treated a patient group of 100,000 or less was 23. By 2014, that number had vaulted to 41. At the same time, the number of Top 100 drugs treating the 500,000-plus category fell by 20 to 35.

Drug-makers also benefit in the U.S. from a payer system that allows a long-term monopoly for the most successful drugs and that increasingly punishes higher-priced “me too” products. Sanofi found that out in 2012. Within months of launching the colorectal cancer treatment Zaltrap (ziv-aflibercept) at $9,600, the company cut the price in half after doctors at Memorial Sloan-Kettering Cancer Center panned it in the New York Times as not worth the cost. Other drugs, such as the cancer products Herceptin (trastuzumab, Genentech), Rituxan (rituximab, Genentech/Biogen Idec), and Revlimid (lenalidomide, Celgene), can keep their prices high even in the face of competition because doctors believe in the benefits to their patients, the report said.

While payers, both private and the government, may bemoan this trend, it looks likely to continue until there is an organized effort to interrupt it, according to the report. Perhaps payers will start conducting their own cost-benefit analyses of the most expensive drugs and “call out” those that don’t measure up. If a payer revolt happens, drug-makers are going to have to keep real benefits in mind if they want to continue pricing their drugs in the premium category, the report says.

Sources: FiercePharma; September 25, 2014; and Evaluate Group; 2014.

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