Price Competition As Result of New Drug Approval

The FDA approved efgartigimod, which is being sold under the brand name Vyvgart and could foment price competition with Soliris (eculizumab) and other treatments usually reserved for severe or refractory cases.

A new drug for myasthenia gravis, a rare autoimmune disease characterized by muscle weakness, might introduce some price competition among treatments used to treat the severe or refractory forms of the disease. But a report by the Institute for Clinical and Economic Review (ICER) suggests that price competition would need to be incredibly fierce for the prices to drop to levels that reflect their cost-effectiveness of the drug, The FDA approve the new treatment, called efgartigimod. Another drug for myasthenia gravis, Soliris (eculizumab), was approved in 2017.

In a recent interview with Managed Healthcare Executive®, Arash Sadeghi, Pharm.D., a clinical pharmacist on OptumRx’s pipeline and drug surveillance, said that from a clinical perspective efgartigimod, which is being sold under the brand name Vyvgart, is unlikely to bring about big changes. “It’s not necessarily that this is going to be a paradigm shift,” Sadeghi said. “I think the efficacy is going to be similar to those other products that are currently available, but it does add some competition in this very expensive category.”

Sadeghi noted that list prices tend to mirror what is currently available but additional products can stir up competition net price — the price after rebates from manufacturers are factored in. “You might see some potential decrease in the net cost because now you have multiple players in the field,” he said in the interview with MHE. Sadeghi was quick to add, though, that OptumRx’s rebates and contracting with manufacturers is out of his purview.

ICER, a well-regarded not-for-profit that conducts cost effectiveness research and issue reports, issued a report on efgartigimod and Soliris (the report uses the generic name) in October 2021.

ICER graded efgartigimod as having “moderate certainty” of having a wide range (“comparable, small or substantial”) of net health benefit when added to conventional benefit. The language was similar, but it gave Soliris a higher grade: B+ versus. C++. The report also said there is uncertainty about whether to stop either drug in patients who are responding them and if stopping is a choice, when should it be done.

But ICER’s take on the clinic effectiveness of the two drugs was less notable than its economic analysis and judgment about a fair price for both drugs based on their effectiveness and contribution to quality of life. Using some standard thresholds for cost effectiveness, ICER’s analysis concluded that Soliris’ price should range from $13,200 to $19,400, which would mean a 97%–98% decrease from its current annual cost of $653,100. The ICER analysis calculated that efgartigimod’s price should be $18,300 and $28,400.

Because Soliris is priced so high, it would be “reasonable” for payers to use the criteria used to enroll people in clinical trials of the drug in making coverage decisions rather than the FDA label, ICER said its policy recommendations. Efgartigimod doesn’t have a price yet, but it is expected to be much higher the range set by ICER, so the organization said payers should also use clinical trial criteria in shaping coverage policies for efgartigimod.

ICER was sharply critical of the pricingof Soliris, which was developed and is marketed by Alexion, a Boston company that has been acquired by AstraZeneca. The population of patients eligible for treatment with Soliris is seven times larger than the eligible population when it was first approved, the ICER report says.

“Pricing is not just a matter of cost,” says the report. “Drug prices that are set well beyond the cost-effective range cause not only financial toxicity for patients and families using the treatments, but also contribute to general health care cost growth that pushes families out of the insurance pool, and that causes others to ration their own care in ways that can be harmful.”

This article originally appeared on Managed Healthcare Executive.