Sun, Oct 28, 2012 - Page 9 News List

Creative drug pricing flourishing in today’s hard-up Europe

By Ben Hirschler  /  Reuters, LONDON

For companies, getting the value proposition right with cancer is a delicate balancing act — and it can only get trickier.

Roche, the world’s biggest cancer drugmaker, recently pushed into new territory with the US launch of Perjeta, a new breast cancer drug designed to be used with its existing product Herceptin. It is the first example of a costly targeted cancer combination therapy from a single company.

The result is a treatment that is effective but extremely expensive, with a typical 18-month course of Perjeta plus Herceptin costing approximately US$188,000.

Despite that price tag, Perjeta is winning sales in the US. However, Europe, where the drug has yet to be launched, is likely to prove a lot more challenging.

Roche — which already has German and Italian schemes that cap the maximum price per patient of Avastin, another cancer medicine — will have to weigh more novel pricing schemes as such new combinations hit the market.

“The 10,000-foot view is that we just follow the science and do what’s right for patients, and then figure out a commercial model that can work,” head of global product development Hal Barron said in a recent interview.

HEAD-TO-HEAD STUDIES

Others have cut different kinds of deals.

GlaxoSmithKline struck an agreement with NICE in 2010 offering Britain’s health service a straight discount plus an additional rebate if its new kidney cancer drug Votrient failed to match Pfizer’s Sutent in a head-to-head trial.

To GSK’s relief, Votrient was as good as the Pfizer-made rival when results were finally reported at a conference last month.

Meanwhile, Novartis pays for extra treatment with its eye drug Lucentis if British patients need more than 14 injections, while in Denmark various schemes tie payments to results for several drugs, including erectile dysfunction pills.

Tying payments to clinical results is an enticing idea for payers, though these schemes are complex to administer.

“There are genuine risk-sharing schemes, where there is real payment according to performance, and then there are a whole host of schemes which are essentially price cuts,” said Gary Johnson, managing director of consultancy Inpharmation. “It’s fair to say the price-cut type scheme is probably dominant.”

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