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ANALYSIS-Pricing is key for new heart drugs challenging cheap generics

Source: Reuters - Tue, 2 Sep 2014 10:00 GMT
Author: Reuters
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(Repeats Monday story, no change to text)

* Doctors expect healthcare providers to haggle over cost

* Novartis's LCZ696 and PCSK9 drugs could treat millions

* Analysts have forecast annual sales of $5 bln-plus for LCZ696

* Some recent heart drugs have been used less widely than hoped

By Ben Hirschler

BARCELONA, Sept 1 (Reuters) - Doctors looking at highly encouraging clinical trial results for new heart drugs at the world's largest cardiology meeting this week are missing one piece of data that will be critical to their success - the price.

While new treatments on show in Barcelona are certainly moving cardiovascular medicine forward after a series of setbacks in recent years, cardiologists say that cost will be key in determining how widely they are used.

"We are entering a new era of treatment and, of course, it will cost a lot of money, which is a problem," said Michel Bertrand, emeritus professor at the University of Lille and a past president of the European Society of Cardiology (ESC).

Hopes have spiked for a heart failure drug from Novartis and an innovative class of injectable anti-cholesterol agents known as PCSK9 inhibitors after the release of data at the ESC's annual meeting indicated that they can save more lives than standard therapies.

The pharmaceuticals industry, however, faces a challenge because the new drugs are designed to replace or supplement a range of older medicines that have lost patent protection and are now widely available as bargain-basement generics.

Novartis's new heart failure drug LCZ696, for example, was tested in a pivotal trial against enalapril, a generic drug in the so-called ACE inhibitor class, a month's supply of which can be bought at Wal-Mart stores for only $4.

The Swiss company has yet to say what it will charge for LCZ696, but based on the cost of recently launched drugs such as Bayer and Johnson & Johnson's anticoagulant Xarelto, analysts expect between $7 and $8 a day - or about $225 a month - with a lower price in Europe.

LARGE MARKET

It would be a big price for a big population - heart failure affects about 26 million people across the United States and Europe - and analysts have forecast peak annual sales of $5 billion-plus.

Doctors, too, are keen that insurers and governments should see beyond the upfront cost to the long-term benefits.

"Unfortunately, many insurance companies focus strictly on the cost of the pill," Elliott Antman, professor of medicine at Harvard Medical School and president of the American Heart Association, told Reuters.

"But if we only look at the per-pill cost we have blinders on. We have to think about the impact on the health-delivery system overall - and if a more expensive new drug reduces symptoms to the extent that patients aren't hospitalised as much, then that has enormous economic impact."

That chimes with the message from Novartis pharmaceuticals head David Epstein, who argues that the cost of a generic "is not the way to think about this product".

Still, with LCZ696 now in a position to replace an array of cheap medicines that have been the mainstay of heart failure treatment for more than 20 years, many cardiologists expect inevitable delays as healthcare providers haggle over access.

"A lot of payers will probably initially deny this because of costs," said Alfred Bove, emeritus professor at Temple University. "Normally it takes about two years for something like this to get ingrained into routine care."

COST-EFFECTIVENESS CHALLENGE

While LCZ696 may involve wholesale switching of treatment, the emerging class of PCSK9 agents present a different cost-effectiveness challenge.

They are designed to complement existing drugs, such as statins, and are likely to cost about twice as much as LCZ696 because they are complex biotech products that have to be injected, according to industry analysts.

Sanofi, working with Regeneron Pharmaceuticals , is racing Amgen to bring the first PCSK9 drug to market in 2015, with Pfizer lagging slightly behind.

Once again the data is looking good, but in this case cardiologists expect uptake to be much more targeted, initially focused on people with a rare familial condition that raises their cholesterol dangerously, as well as high-risk and statin-intolerant patients.

"I think doctors will be quite cautious and I would expect a very stratified approach," said the University of Edinburgh's Keith Fox, who chairs the ESC's congress programme committee. "I don't see these drugs going out in the same broad way as statins."

However, this high-risk group alone totals about 21 million in the United States and Europe, Sanofi estimates, pointing to a multibillion-dollar sales opportunity.

For cardiologists, the expected launch next year of two important types of treatment is a breath of fresh air. Heart medicine has recently been eclipsed by advances in oncology, with U.S. regulators approving five new cancer drugs this year against only one for cardiovascular conditions.

What is more, some heart drugs launched in recent years have not been used as widely as initially hoped, including AstraZeneca's Brilinta and Pfizer and Bristol-Myers Squibb's Eliquis, a rival to Xarelto.

These drugs, however, did not offer the innovative mechanisms used with LCZ696 or PCSK9, which Freek Verheugt, of the Rotterdam Thorax Center, says should make a difference when the success stories from Barcelona finally reach patients.

"A brand new thing that saves lives should be adopted quickly," he said. (Editing by David Goodman)

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