Will Genentech's Cotellic Survive Alternative Pricing Demands?
This article was originally published in Scrip
Genentech Inc.'s and Exelixis Inc.'s Cotellic (cobimetinib), a MEK inhibitor, made it across the FDA's finish line on Nov. 10, but now the firms must confront the ultimate test of the drug's success – selling it, which is increasingly becoming more difficult in a climate where payers are becoming more and more demanding about using alternative pricing arrangements.
Cotellic's approval gave shares of Exelixis a 5.2% boost on Nov. 10, before closing at $6.33, up 23 cents, or 3.8%.
But investors in Roche Holding AG, the parent company of Genentech, were unimpressed, with the stock down throughout the day, falling 1.35%, or 45 cents, before closing at $33.09, a loss of 21 cents.
The FDA OK'd Cotellic, which was discovered by Exelixis, in combination with Zelboraf (vemurafenib), a kinase inhibitor, to treat patients with unresectable or metastatic melanoma with a BRAF V600E or V600K mutation.
Zelboraf was co-developed under a 2006 license and collaboration agreement between Roche and Plexxikon Inc., which is now part of Daiichi Sankyo Co. Ltd.
Zelboraf, which gained the FDA's approval in August 2011, is indicated as a single agent to treat patients with unresectable or metastatic melanoma with BRAF V600E mutation as detected by the cobas 4800 BRAF V600 mutation test.
All three companies – Genentech, Exelixis and Daiichi Sankyo – will be responsible for promoting Cotellic in the US, said Holli Kolkey, associate director of corporate relations at Genentech, who noted the drug will be available in the US within two weeks.
She told Scrip Genentech, which holds the FDA application, has priced Cotellic at $6,600 per month, although Kolkey said the monthly cost of Cotellic plus Zelboraf is about $17,600.
The estimated cost for a 12.3 month course of treatment with Cotellic plus Zelboraf in advanced melanoma is $216,500, Kolkey said.
"When considering the cost of Cotellic, we took into consideration that it would be used with Zelboraf and potentially other medicines in the future, and priced Cotellic less than other recently approved cancer medicines," she said.
Competition
Cotellic plus Zelboraf is expected to compete with GlaxoSmithKline PLC's Mekinist (trametinib) plus Tafinlar (dabrafenib) – the first combination targeted therapy regimen approved in the US for unresectable or metastatic melanoma with BRAF V600E or V600K mutations.
The annual cost of Mekinist plus Tafinlar is about $153,220, according to Tijana Ignjatovic, an analyst at Datamonitor Healthcare, an affiliate of Scrip.
Mekinist, a MEK inhibitor, was approved initially in May 2013 as a single agent to treat patients with unresectable or metastatic melanoma with the BRAF V600E or V600K gene mutations, while Tafinlar, a BRAF inhibitor, was approved the same day as a single agent to treat patients with melanoma whose tumors express the BRAF V600E gene mutation.
Other recent drug approvals in the US in unresectable or metastatic melanoma include Merck & Co.'s Keytruda (pembrolizumab) – the first human programmed death receptor-1 (PD-1)-blocking antibody to gain the FDA's nod – and Bristol-Myers Squibb Co.'s PD-1 immune checkpoint inhibitor Opdivo (nivolumab).
Those drugs are approved for patients with unresectable or metastatic melanoma and disease progression following BMS' human cytotoxic T-lymphocyte antigen 4-blocking antibody Yervoy (ipilimumab) and, if BRAF V600 mutation positive, a BRAF inhibitor.
They each cost $12,500 per month.
On Oct. 1, BMS also gained an accelerated approval to market Opdivo plus Yervoy as a treatment for patients with BRAF V600 wild-type unresectable or metastatic melanoma – the first immuno-oncology combination regimen cleared for marketing in the US.
The annual cost of using Opdivo in combination with Yervoy is about $256,000, although BMS said the price would vary by patient, depending on the length of therapy.
The cost of a four combination-dose regimen of Opdivo plus Yervoy – what was studied in BMS' CheckMate -069 trial, on which the approval was based – is about $141,000, which the company said may actually be less for some patients than the sequence of using Yervoy first followed by Opdivo.
Yervoy alone costs about $120,000 per year, Datamonitor's Ignjatovic said in a recent report, Malignant Melanoma Pricing and Reimbursement.
Tougher Combo Scrutiny
She noted the prices of melanoma therapies – and oncology drugs in general – have become the subject of closer scrutiny due to their high costs.
Nonetheless, Ignjatovic said payers interviewed by Datamonitor indicated the treatment of metastatic melanoma currently has a limited budgetary impact, due to low disease incidence and limited treatment options.
But, she said, market entry of new drugs will dramatically increase the budget impact of melanoma treatments – becoming a more significant concern for payers.
While there may not be any immediate impact on the pricing of single-agent melanoma therapies, Ignjatovic said she anticipated manufacturers may have to consider novel pricing arrangements, such as capping the total cost of treatment per patient, with the combination regimens.
"Companies may need to consider alternative pricing arrangements if the cost of melanoma treatments continues to rise," she said.
Ignjatovic pointed out that oral melanoma therapies are given top-tier status – the specialty tier – in the majority of commercial and Medicare formularies Datamonitor examined in its report, with no differentiation in terms of payer management from one molecule to another.
"Physician choice will therefore be the key factor influencing the uptake of these drugs," Ignjatovic declared.
But she also noted that prior authorization, or precertification, is an extra step that insurance companies can require to decide whether to reimburse a drug – or not.
Under prior authorization, prescribers must submit evidence the patient fulfills the criteria that the insurance plan has in place for the drug to be reimbursed.
Ignjatovic said a prior authorization requirement currently is in place for Mekinist, Tafinlar and Zelboraf in most investigated commercial and Medicare Part D plans.
That's likely to be the case for the Cotellic plus Zelboraf regimen.
Payment Help
Genentech's Kolkey insisted her company is doing its "best to ensure price doesn't prevent our medicines getting to people who need them."
"We have a team of more than 350 Genentech employees dedicated to helping people having trouble accessing our medicines or who have insurance coverage or reimbursement issues," she explained. "We have a number of services including providing free medicine to people who are uninsured or underinsured, helping patients understand their insurance, providing assistance when a payer denies coverage, and providing co-pay assistance."
Genentech also offers a co-pay card that can help eligible patients with private insurance, Kolkey said. With the card, patients end up paying $25 per co-pay for Cotellic or $50 total for Cotellic plus Zelboraf, she said.