‘Sham’ or public interest? ICER suggests 70%-plus discounts on Vertex’s cystic fibrosis drugs

Vertex has often talked about its admiration of Gilead, setting the big biotech’s ability to roll out multiple antivirals as a model for its cystic fibrosis endeavor. Now, though, it faces the same pricing issue once pinned on Gilead’s hepatitis C franchise. But the company refuses to play sitting duck.

In a new report, the U.S. cost-effectiveness watchdog the Institute for Clinical and Economic Review argues that Vertex’s cystic fibrosis trio—Kalydeco, Orkambi and newly approved Symdeko—need a huge price cut to achieve cost-effectiveness. Its suggested discount? Over 70%.

"Our analysis suggested that discounts of up to 77% would be needed to bring the prices into alignment with their clinical value to patients," ICER's chief scientific officer, Dan Ollendorf, Ph.D., said in a statement. Ollendorf admitted that Vertex's cystic fibrosis drugs—known as transmembrane conductance regulator (CFTR) modulators—offer significant benefits for patients, but he added that their prices "produce overall costs that are far in excess of those needed to reach commonly cited cost-effectiveness thresholds."

Vertex hit back at the findings. In a strongly worded letter (PDF) to the organization shared with FiercePharma, Vertex argues the methodology used by the report is flawed. It calls the ICER evaluation process a "sham," referring to the fact that ICER presented final recommendations weeks before a public hearing scheduled for May 17—rather than waiting to incorporate feedback from that hearing—and calls the conclusions "agenda-driven and pre-ordained."

It's true that the drugs don’t come cheap. The new-and-improved Symdeko bears a yearly price of $292,000, which is 7% higher than Orkambi’s. But the company argues that U.S. payers have granted patients broad access to the three CF meds. That shows payers themselves have "universally recognized their clinical value," the letter stated.

"We object strongly to your intentions to use your flawed results to attempt to remove this broad access for patients with this serious disease," said the company in the Thursday letter.

Since ICER published its draft report on the drugs last October, opening it up for comment, Vertex and several patient groups, including the Cystic Fibrosis Foundation, have submitted concerns about the report. Some suggest ICER report may stifle innovation and provide justification for payers to refuse coverage. An ICER spokesperson told FiercePharma that it has adjusted findings based on the public comments. But a calculation of results from the draft report shows that the conclusions remain largely unchanged.

After issuing a press release on the report, ICER took it down to correct some "minor errors," but the spokesperson said "[n]one of these updates will affect the report’s core conclusion that the three treatments would need at least a 70% discount off their respective list prices to achieve common thresholds for cost-effectiveness." The revised final ICER report had not gone live by publication time.

ICER evaluated the Vertex therapies in three patient populations and based its price-cut conclusion on the cost-effectiveness standard of spending $100,000 to $150,000 for every quality-adjusted life year (QALY) gained.

This is not the first time biopharma companies have taken issue with ICER and its drug economic analyses. Amgen and Regeneron previously blasted the organization of using flawed methods to assess their new PCSK9 medications Repatha and Praluent. But in a recent deal struck with Express Scripts, Regeneron and partner Sanofi lowered Praluent's price to a range suggested by ICER.

Industry watchers have high hopes for Vertex’s CF franchise. Leerink Partners analyst Geoffrey Porges recently predicted that the addition of Symdeko can help Vertex reach $2.84 billion in CF revenues this year. For the first quarter, the company already registered $638 million from the franchise, a 33% jump from last year.

Porges also noted that Vertex hasn’t relied on price increases but new innovative products for growth. It only hiked prices on its CF franchise once, according to the Leerink analyst. Following through on its admiration for Gilead, the company is evaluating next-generation three-drug CF combos, just as the California biotech has focused on combo HIV pills.

Vertex hit back at the findings. In a strongly worded letter (PDF) to the organization shared with FiercePharma, Vertex argues the methodology used by the report is flawed. It calls the ICER evaluation process a "sham," referring to the fact that ICER presented final recommendations weeks before a public hearing scheduled for May 17—rather than waiting to incorporate feedback from that hearing—and calls the conclusions "agenda-driven and pre-ordained."

It's true that the drugs don’t come cheap. The new-and-improved Symdeko bears a yearly price of $292,000, which is 7% higher than Orkambi’s. But the company argues that U.S. payers have granted patients broad access to the three CF meds. That shows payers themselves have "universally recognized their clinical value," the letter stated.

"We object strongly to your intentions to use your flawed results to attempt to remove this broad access for patients with this serious disease," said the company in the Thursday letter.

Since ICER published its draft report on the drugs last October, opening it up for comment, Vertex and several patient groups, including the Cystic Fibrosis Foundation, have submitted concerns about the report. Some suggest ICER report may stifle innovation and provide justification for payers to refuse coverage. An ICER spokesperson told FiercePharma that it has adjusted findings based on the public comments. But a calculation of results from the draft report shows that the conclusions remain largely unchanged.

After issuing a press release on the report, ICER took it down to correct some "minor errors," but the spokesperson said "[n]one of these updates will affect the report’s core conclusion that the three treatments would need at least a 70% discount off their respective list prices to achieve common thresholds for cost-effectiveness." The revised final ICER report had not gone live by publication time.

ICER evaluated the Vertex therapies in three patient populations and based its price-cut conclusion on the cost-effectiveness standard of spending $100,000 to $150,000 for every quality-adjusted life year (QALY) gained.

This is not the first time biopharma companies have taken issue with ICER and its drug economic analyses. Amgen and Regeneron previously blasted the organization of using flawed methods to assess their new PCSK9 medications Repatha and Praluent. But in a recent deal struck with Express Scripts, Regeneron and partner Sanofi lowered Praluent's price to a range suggested by ICER.

Industry watchers have high hopes for Vertex’s CF franchise. Leerink Partners analyst Geoffrey Porges recently predicted that the addition of Symdeko can help Vertex reach $2.84 billion in CF revenues this year. For the first quarter, the company already registered $638 million from the franchise, a 33% jump from last year.

Porges also noted that Vertex hasn’t relied on price increases but new innovative products for growth. It only hiked prices on its CF franchise once, according to the Leerink analyst. Following through on its admiration for Gilead, the company is evaluating next-generation three-drug CF combos, just as the California biotech has focused on combo HIV pills.

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