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When government economists last week predicted an uptick in the nation's health-care spending rate, they were asked whether they had considered the potentially high overall costs of pricy new cholesterol drugs that have begun winning federal approval.
They had, Sean Keehan, one of those economists from the Centers for Medicare and Medicaid Services, told reporters during a briefing.
But Keehan quickly added that the economists believed that overall spending on the new injectable breakthrough drugs known as PCSK9 inhibitors will be "not as large as we've seen in some reports."
Those reports have included speculation that U.S. spending on PCSK9 inhibitors alone could end up being as high as $100 billion to $150 billion each year.
Keehan then cited several factors that he and his fellow economists in CMS' Office of the Actuary expect will help keep PCSK9 costs lower than some have feared.
"There are a lot of inexpensive generics for high cholesterol," Keehan noted. The economists, he said, believe that health providers and pharmacy benefit managers will encourage patients to use, and continue to use, those much cheaper statin drugs first.
"Second, we're expecting some competition for these PCSK9 drugs," Keehan said. "What we've seen is when there's a lot of competition, some manufacturers might offer some high rebates," thereby reducing net spending on the drug, he said.
Keehan's explanation echoed arguments made by a leading pharmaceutical industry group and others that rebates, discounts, competition, oversight by insurers and pharmacy benefit managers, and long-standing statin medication therapy would help keep spending in check for PCSK9 inhibitors, which have been found to be extremely effective at controlling cholesterol levels.
And while Keehan and his colleagues said in their projections that spending on specialty drugs would help fuel an average annual 5.8 percent inflation rate for health care nationally over the next decade, PCSK9 inhibitors were not among the drugs they singled out in their report.
But a day after Keehan spoke, on July 29, the large pharmacy benefit manager Express Scripts made clear it remains worried spending on the drugs could eventually top $100 billion annually, noting that "additional clinical trials are underway for PCSK9 inhibitors that ultimately may expand the target population in 2017, further increasing this potential cost burden."
"Even if physicians adopt this new therapy slower than anticipated, it is clear that PCSK9 inhibitors are on a path to become the costliest therapy class this country has ever seen," wrote Dr. Steve Miller, chief medical officer and senior vice president at Express Scripts, in a blog post.
Miller added that the $14,600 per patient per year announced price of Praluent, the PCSK9 inhibitor made by Sanofi and Regeneron that won Food and Drug Administration approval July 24, "is on the high end of what we were expecting." It's also about 50 times the price of generic statins that many people use to control their cholesterol.
He also wrote that over the next month, during which Amgen's competing drug Repatha is expected to win FDA approval, "we will work hard ... to achieve the best possible for the patients and payers that we represent."
"In the immediate term, we will cover Praulent for those patients for whom the drug is clinically appropriate," Miller wrote.
When the FDA approved Praulent, it did so for use by patients who are already at their "maximally tolerated statin" use who have a genetic condition known as HeFH, or heterozygous familial hypercholesterolemia, "or patients with clinical atherosclerotic cardiovascular disease such as heart attacks or strokes who require additional lowering of LDL cholesterol," the agency said. That would mean that an estimated 8 million to 10 million people would be eligible to use Praluent for its approved use.
Miller's blog noted that although all of those people wouldn't be expected to use Praluent at once, the total annual cost from Praluent "could eventually grow to more than $100 billion each year, if not managed properly." Miller noted that amount represents a potential increase of 30 percent to what the U.S. spent on all prescription medication in 2014.
Regeneron, which has begun selling Praluent, said it expects the actual number of patients using the drug will be smaller than the 8 million to 10 million, since a number of those people will be able to lower their cholesterol by upping their statin dosage beyond current levels, or will be disinclined to inject a drug, or for other reasons.
And the pharmaceutical industry trade group PhRMA has also pushed back over claims that PCSK9s will lead to an explosion in overall drug spending.
"Yet again pharmacy benefit managers are making unfounded claims about spending on medicines that disregard the impact of competition and price negotiation in the marketplace," said Robert Zirkelbach, PhRMA senior vice president.
"It is disingenuous to discuss costs without acknowledging the tremendous value medicines provide to patients and the health-care system," Zirkelbach said. "New cholesterol-lowering treatments have the potential to address a significant unmet medical need for patients unable to control their cholesterol levels with existing treatment options and who face a high risk of developing serious and costly cardiovascular complications, such as heart attack and stroke."
But there is the potential that Praulent and other PCSK9 inhibitors will be prescribed for "off-label use" for other conditions than what the FDA has approved which adds to the cost concerns.
Clare Krusing, spokeswoman for the insurance industry trade group America's Health Insurance Plans, said that "typical off-label use [for a drug] is usually around 20 to 30 percent" of the overall use of the medication.
Given the tens of millions of people with high cholesterol, and the potential for additional treatments from PCSK9 drugs, "you could see a scenario where those costs just balloon," Krusing said, noting the drug would likely be used over the course of a patient's lifetime.
She said insurers will be keeping an eye on Praluent prescriptions over the next several weeks to see if their usage is beyond the relatively small population that the FDA has approved the drug for.
Dr. Steven Pearson, president of the Institute for Clinical and Economic Review, a health-care research group, noted that "any doctor can use any licensed medication to benefit a patient in a way they deem appropriate."
"There are patients who may be at higher risk relatively for heart attacks, but may not fit the FDA's label," Pearson said. He pointed to a recent survey of 48 primary cardiologists by an analyst at Sanford Bernstein, as reported by the Wall Street Journal, which led the analyst, Geoffrey Porges, to conclude that most of the doctors would prescribe PCSK9 inhibitors for off-label uses.
Pearson's group later this year is expected to issue a report that will assess both the health and economic outcomes from PCSK9 inhibitors.
"I think the top-end of the estimates of what the potential budget impact will be are not where the [actual costs] will land," said Pearson referring to the $100 billion to $150 billion annual estimates that have been floated. But, he also said there will be a lot of questions about the long-term value of the drugs.
"We're in an era where many new drugs seem to have a very high price, and it raises these questions," Pearson said. "You kind of ask yourself, how much are you willing to spend for how much benefit?"