J&J Foresees Broad Insurance Coverage For Groundbreaking Spravato Nasal Spray

Datamonitor projects the newly US FDA-approved esketamine product for treatment-resistant depression will reach sales of almost $2bn in the US, Japan and five major European markets.

Based on discussions with payers, Johnson & Johnson expects broad insurance coverage for its newly US FDA-approved treatment-resistant depression nasal spray drug Spravato (esketamine), which is set to become available in about two weeks at a list price of $590 or $885, depending on the dose, per treatment session.

The FDA announced approval of the drug/device combination for use with an oral antidepressant for patients with treatment-resistant depression late on March 5. J&J estimates that of the 16m people in the US with major depressive disorder (MDD), 5m have treatment-resistant depression (TRD), which is defined as a lack of response to at least two different antidepressants of adequate dose and duration during a current depressive episode.

Esketamine is the s-enantiomer of the NMDA receptor antagonist ketamine, which has been approved in the US since the 1970s for use as an anesthetic, but is also used on a generic basis off-label in major depression. (Also see "Ketamine May Shake Up The Treatment Of Major Depression" - In Vivo, 11 Oct, 2017.)

Use Will Be Tightly Controlled

As only the second drug approved by the agency for treatment-resistant depression after Eli Lilly & Co.'s Symbyax (olanzapine and fluoxetine HCI), which was cleared for the acute treatment of TRD in 2009, Spravato is groundbreaking.

Approval was expected, following a strongly positive vote in favor of approval by the FDA's Psychopharmacologic Drugs Advisory Committee and the agency's Drug Safety and Risk Management Advisory Committee in February. (Also see "Janssen’s Esketamine Gets US FDA Panel Endorsement, But With Pricing, Access And Diversion Concerns" - Scrip, 14 Feb, 2019.)

Spravato is associated with risks for sedation, dissociation, hallucinations, elevated blood pressure and abuse and, consequently, it was approved with a strict Risk Evaluation and Mitigation Strategy (REMS) to control distribution, as expected. (Also see "Janssen’s Esketamine: US FDA Panel To Weigh Efficacy, REMS Restrictions For Treatment-Resistant Depression" - Pink Sheet, 10 Feb, 2019.)

Spravato is a Schedule III drug, meaning it has moderate to low potential for physical and psychological dependence, and labeling has a boxed warning advising of risks for sedation, dissociation and abuse as well as suicidal ideation in younger patients.

Per the REMS, treatment must be administered in a certified treatment center, though patients may self-administer. Patients must be monitored for at least two hours by a health provider, need to make arrangements to get home safely after treatment and will be advised not to drive or use heavy machinery for the rest of the day, the agency noted in a March 5 statement about the approval.

Optimistic About Prospects With Payers

The product will be made available for purchase by certified treatment centers during the week of March 18, and J&J subsidiary Janssen said that it is "working quickly to educate and certify sites in accordance with the REMS."

Hundreds of centers are expected to become certified in 2019; those with large behavioral health clinics will most likely be able to start up and get established fairly quickly, Courtney Billington, president of Janssen Neuroscience, said in an interview.

The company expects the drug will be covered in a similar manner as other specialty pharmaceuticals for serious mental illness, the exec added.

Prior to approval, the company spent a "good amount of time" with payers explaining the benefits of the treatment and provided a range of pricing they could expect. These early discussions suggest Spravato should be broadly covered, Billington said.

As with most novel medications, it will take time to get Spravato through the approval systems and pharmacy and therapeutics (P&T) committees, but the company believes that the insurance companies understand the high unmet need and will allow broad access, Billington said.

List Price Varies Depending On Dosing Regimen

The cost of therapy varies based on the dose used per session and how many sessions take place, both of which can differ from patient to patient, Janssen said.

Each nasal spray device includes 28 mg of esketamine. Spravato's labeling advises that two devices may be used to deliver a 56 mg dose and three for an 84 mg dose, with a five-minute rest between each administration. The wholesale acquisition cost (WAC) for a treatment session is $590 for the 56 mg dose and $885 for 84 mg.

"During the induction phase of therapy, which lasts for one month, patients are treated twice a week with either 56 mg or 84 mg, so the WAC for the one-month induction phase ranges from $4,720-$6,785. Patients who have responded to therapy in the induction phase move on to the maintenance phase. During the maintenance phase, patients are treated with either the 56 mg dose or 84 mg dose either weekly or every two weeks, so the WAC for a month of maintenance therapy will range from $2,360 –$3,540," the company explained.

These costs don't include other costs associated with administration or monitoring of patients and Billington declined to speculate what the total tab will be.

The WAC is in line with list prices for other specialty mental health drugs, including long-acting injectables for schizophrenia, the company said.

Esketamine and other drugs for depression are slated to be reviewed this year by the third-party Institute for Clinical and Economic Review (ICER), which is influential for reimbursement policies. (Also see "ICER’s 2019 Agenda Includes CAR-T Therapy, Drugs For Depression, Arthritis, AMD" - Pink Sheet, 14 Aug, 2018.)

Competing With Ketamine

Spravato will be competing with generic ketamine, which is typically administered intravenously, but ketamine is not approved for depression and it is administered in pricey private clinics that charge hundreds of dollars per infusion, with an overall course of therapy involving six to eight sessions.

Billington noted that in contrast with ketamine, Spravato has undergone testing in clinical trials that informed the FDA approval and that Janssen has invested more than nine years in R&D to develop the product.

Furthermore, he added that ketamine is not broadly reimbursed for off-label use in treatment-resistant depression.

Spravato was evaluated in three short-term trials and one longer-term maintenance-of-effect study. The drug demonstrated significantly improved efficacy in one of the short-term studies and in the longer-term trial. (Also see "J&J's Mixed Phase III Data For Esketamine Highlight Challenges In Resistant Depression" - Scrip, 7 May, 2018.)

Datamonitor analyst Stephanie Yip commented that the mixed efficacy data is partially a reflection of the hard-to-treat patient population and added that real-world off-label experience with intravenous ketamine in depression favors Spravato.

The analyst also noted that key opinion leaders are enthusiastic about the extremely rapid onset of action, which suggests Spravato will carve out a place for itself in the market.

Datamonitor forecasts sales of close to $2bn in 2026 in the US, Japan and five major European markets (France, Germany, Italy, Spain and UK).

During the FDA advisory committee review in February, Walter Dunn, a psychiatrist at the West Los Angeles Veterans Administration Medical Center, described the rapid response in treatment-resistant depression as "unprecedented" and said esketamine is a "game changer."

Following the drug's approval, Theresa Nguyen, vice president of policy and programs at the Mental Health America, also cited potential for immediate response as appealing for patients with treatment-resistant depression.

Depression is one of the hardest mental illnesses to treat – patients may not feel relief until 30 to 60 days on treatment and many give up rather than stay the course, she said in an interview with Scrip.

Esketamine "changes all of that," she said.

Allergan's Rapastinel Stumbles As Spravato Ascends

Some analysts expected that esketamine's success would bode well for other new anti-depressants, with potential to widen the market. (Also see "J&J Seeks A Priority Review For Depression Drug Esketamine" - Scrip, 4 Sep, 2018.)

However, on March 6, Allergan PLC announced that its NMDA receptor partial antagonist rapastinel failed as an adjunctive treatment for major depressive disorder in three Phase III studies, missing primary as well as secondary endpoints.

In February, the FDA issued a complete response letter for a filing of Alkermes PLC' major depressive disorder drug ALKS 5461, a combination of the opioid buprenorphine and the μ-opioid receptor antagonist samidorphan. (Also see "Keeping Track: FDA Approves First Generic Advair, But Alkermes And Sunovion Land CRLs" - Pink Sheet, 2 Feb, 2019.)

Previously, in November, the FDA extended the user fee date for the review of a filing for Sage Therapeutics Inc.'s Zulresso (brexanolone) in post-partum depression by three months after the company submitted a proposed REMS. (Also see "Sage Gets More Time For Zulresso Launch Preparations With Delay Of US FDA Approval" - Scrip, 20 Nov, 2018.)