And you thought the fight over prices of cancer and hepatitis drugs was hot.
Emerging federal approval of new cholesterol drugs is setting the stage for a battle over the high prices of those specialty medications and the possibility that millions of people will end up using them each year.
The injectable drugs, known as PCSK9 inhibitors, could cost an estimated $7,000 to $12,000 per year for each person using the drug.
That price tag is generating worry that the costs will add to the increasing burden of drug costs borne by government health programs such as Medicare, as well as private insurance plans. Also of concern is the potential out-of-pocket costs to patients from the new drugs. But a leading trade group for the pharmaceutical industry dismissed fears of non-sustainable costs from PCSK9 inhibitor drugs as overblown, arguing that their use will be less widespread than critics' fears, and that their health benefits will more than justify their big price tag.
The Food and Drug Administration on Friday approved the PCSK9 inhibitor known as Praluent, which was developed by Regeneron and Sanofi on Friday. Amgen's version, known as Repatha, is expected to win FDA approval next month.
The FDA limited its approval for the use of Praluent to those with a hereditary form of high cholesterol and to people with heart disease, which could control overall spending on the drug in the short term if doctors adhere to those limitations. Praluent a wholesale price of $14,600 per year, but discounts could lower that for insurers.
The arrival of the drugs and their high prices, have drawn close attention for pharmacy benefit managers, including CVS/caremark, a division of CVS Health, which has 65 million drug plan members.
In an article in February in the Health Affairs Blog, a group of CVS Health executives wrote that while PCSK9 inhibitors in reported tests have had "striking" effects and proven "highly effective in reducing" a type of cholesterol known as LDL-C, "those improvements will be costly."
"Given the number of people potentially eligible for treatment with the PCSK9 will number in the millions, the potential overall expenditures by payers are huge," the CVS executives wrote in the article, headlined, "In the Debate About Cost and Efficacy, PCSK9 Inhibitors May Be the Biggest Challenge Yet."
Their article notes that while there are about 620,000 people with a condition known as familial hypercholesterolemia who would be the first group likely prescribed the drug, an additional group of nearly 3 million people who could end up qualified for new PCSK9 therapy because of their intolerance of statin medication, or their high levels of LDL that are unlikely to be addressed by a statin.
That means that on the high end the drugs could add $150 billion annually in costs to the U.S. health system or, more conservatively, $50 billion to $100 billion in extra costs if a more limited patient population is eligible for the PCSK9 inhibitors, the authors wrote.
They pointed out that even if just the 620,000 people were eligible, that would mean $16 billion in annual extra drug costs, "dwarfing" the initial costs of Sovaldi, the Hepatitis-C medication from Gilead Sciences.
Sovaldi—priced at $1,000 per pill or $84,000 for a 12-week treatment when it was introduced in 2013—sparked a vigorous debate over its costs. While up to 3 million people have Hepatitis-C in the U.S., Sovaldi can cure their disease, so the $150 billion maximum price tag for treating them could be spread out over a decade, not absorbed in just one year, the CVS execs wrote.
In June, Debra Whitman, chief public policy officer of the AARP, during a presentation about retirement at the National Press Club, noted the rising costs of drugs, and argued that "current trends are not sustainable" on a PowerPoint slide highlighting the potential costs of PCSK9 inhibitors. Whitman's presentation also noted that about half of Medicare beneficiaries, people 65 years old and over, have incomes of less than $23,500 annually, and Medicare-eligible people have average out-of-pocket health costs that burden nearly 13 percent of their total income before the age of 70, with the percentage of such costs rising higher and higher the older they get.
Whitman told CNBC.com, "The new, very expensive drugs coming to the market will be a serious burden for older consumers. Not only will they lead to sticker shock at the pharmacy when consumers see their out-of-pocket costs as they fill a new prescription, but they will also cause premiums to rise both in Medicare and in the private health market."
"We will all pay for these new drugs in some way," Whitman said.
On Thursday, the debate over the costs of specialty drugs gained fuel when a group of 118 leading cancer experts made several recommendations to help control the prices of cancer medication, whose high prices "are affecting the care of patients with cancer and our health-care system," according to Dr. Ayalew Tefferi, an oncologist at the Mayo Clinic, and lead author of the article outlining the suggestions.
"The average gross household income in the U.S. is about $52,000 per year. For an insured patient with cancer who needs a drug that costs $120,000 per year, the out-of-pocket expenses could be as much as $25,000 to $30,000—more than half their average household income," Tefferi said Thursday in announcing the article. "When you consider that cancer will affect one in three individuals over their lifetime, and [with] recent trends in insurance coverage [that] put a heavy financial burden on patients with out-of-pocket expenses, you quickly see that the situation is not sustainable."
The group's recommendations include creating a new drug approval review mechanism to propose fair prices for new treatments based on value to patients, allowing the government's Medicare health system to negotiate drug prices, allow importation of cancer drugs and pass laws preventing drug companies from delaying access to generic versions of medication.
The pharmaceutical trade group PhRMA earlier this week highlighted its pushback effort against the concerns about the prices of PCSK9 inhibitors, pointing reporters to infographics and blog posts that discuss efforts to control cholesterol and the value of related medications. One of those infographics notes the role high cholesterol plays in increasing the risk of heart disease, which in turn leads to an estimated $172 billion in lost productivity annually, and almost 800,000 deaths.
And "despite claims that tens of millions of Americans could be eligible for these [PCSK9 inhibitors], in reality these treatments will address a significant unmet medical need for a small patient population," said PhRMA spokeswoman Holly Campbell.
Many of the total of 10 million of Americans who have uncontrolled cholesterol and who could ultimate benefit from PCSK9 inhibitors, Campbell said, can possibly reach their cholesterol level goals without using PCSK9s by taking existing medication or in different dosages, or by making changes to their lifestyle including diet and exercise regimens.
Campbell also said that pharmacy benefit managers have indicated they "are going to have tight utilization programs to even access this medication"—limiting the number of people taking it—and will "use their leverage to control cholesterol [drug] prices" charged by pharmaceutical companies.
She said that the $7,000 to $12,000 price estimates that were made by others before Friday's announcement about PCSK9 inhibitors are "just prices being put out in public, but [they are] not actually the prices that patients will be charged."
Campbell noted that, given the amount of negotiation the industry has seen in the price of hepatitis C medication after the introduction of Sovaldi, discounts of 30 to 50 percent, or more could be achieved by benefit managers for PCSK9 medications.
Campbell also said that those new cholesterol drugs will be introduced around the same time, meaning their makers will be competing with each other on price, unlike Sovaldi, which did not have competition for a year.
"You're going to see competition more strongly and more quickly in this particular disease area," she said.