February 28, 2013 3:50 pm
This article is provided to FT.com readers by BioPharm Insight—a news service focused on providing insight into the most price sensitive issues in the global pharmaceutical market. www.biopharminsight.com
HIV drug makers are expected to be somewhat protected from generic drug pricing pressure given the emphasis on single-tablet regimens (STRs) and the large role of public payers, experts told BioPharm Insight. The role of private payers is more uncertain, they added.
Over its lifetime, HIV treatment has evolved so quickly that no drug has been a mostly preferred first-line regimen long enough to have it come off patent, said Dr Rochelle Walensky, a practicing infectious disease physician, Massachusetts General Hospital. Only now are drugs working so well for so long that there is even the consideration of patent expiry, she noted.
Notably, generic versions of Bristol-Myers Squibb’s (NYSE:BMY) Sustiva (efavirenz) are expected soon, according to a recent paper (Walensky, RP et al. Annals of Internal Medicine 2013 Jan 15;158(2):84-92). Sustiva’s patent expiry has been reported to be this year. BMS did not return a request for comment to further clarify.
Sustiva is part of the three-drug STR regimen known as Atripla, approved in July 2006. It is coupled with Gilead Sciences’ (NASDAQ:GILD) Truvada (emtricitabine/tenofovir). Gilead and Teva Pharmaceuticals (NYSE:TEVA) recently settled a patent dispute over Viread, the branded name for tenofovir, whereby Teva will be permitted to begin sales of a generic tenofovir on 15 December 2017. Patent expiry for both Emtriva (emtricitabine) and Truvada are not until 2021.
Atripla is a preferred first-line regimen under both the US Department of Health and Human Services and International Antiviral Society-USA treatment guidelines. Thus far these guidelines have skirted addressing the issue of generic drugs, Walensky noted.
AIDS was first reported in 1981. The first antiretroviral therapy, GlaxoSmithKline’s (LON:GSK) Retrovir (zidovudine), was approved in March 1987, and the first two-drug fixed combination, Viiv Healthcare’s Combivir (zidovudine/lamivudine) appeared in 1997. Viiv is the HIV joint venture between GSK and Pfizer (NYSE:PFE). There are three STRs approved in the US – Atripla, Complera, approved in 2011, and Stribild, approved in 2012.
Gilead reported 2011 Atripla sales of USD 2bn and Truvada sales of 1.4bn, according to BioPharm Insight data.
Public payer influence
About 20% of people living with HIV have private insurance, so the government is the key payer, said Mick Kolassa, chairman and managing partner, Medical Marketing Economics, Oxford, Mississippi. As of June 2012, 193,535 patients were enrolled in the federal-state AIDS Drug Assistance Program (ADAP), with 143,941 actually served, according to the National Alliance of State and Territorial AIDS Directors (NASTAD) 2013 National ADAP Monitoring report. The Centers for Disease Control and Prevention estimates that 1,148,200 persons aged 13 years and older are living with HIV infection.
Due to mandatory drug rebates and ADAP pricing, there is an unusual situation in the HIV landscape where branded drugs are cheaper than generics, said Kolassa. While some state ADAPs may try to implement the use of generics, HIV’s political nature has shielded it from strong generic pressure, he added.
For the first time, the national ADAP budget has exceeded USD 2bn, said Britten Pund, senior manager, Health Care Access, NASTAD.
NASTAD’s 2013 report also found that while the ADAP program has grown immensely in terms of resources to sustain care, there has also been increasing pharma and state program support, said Pund, who coauthored the report. Thus, the federal share of ADAP’s budgets have decreased.
Since 2008, when ADAP waiting lists first started to grow in recent history, drug rebates have increased 127%, said Pund.
ADAPs are also able to take advantage of the 340B Drug Pricing Program, said Pund. The 340B program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations and covered entities at significantly reduced prices. The 340B price is somewhere between 60%-70% less than the average wholesale prices, said Pund, though the ultimate dollar value is confidential. Thus, ADAPs are able to take advantage of prices well below average.
Private payers’ approach
Despite the benefits to public payers for branded drugs, generics will likely be less expensive for commercial insurers, said Kolassa. However, if a generic is only available from a single supplier, it is not likely to be appreciably cheaper than its branded counterpart, he said. The “magic number” of generic suppliers is three, at which point prices fall significantly, he said.
Chuck Stevens, vice president and general manager, Commercialization Strategies, PAREXEL Consulting, noted he does not expect private payers to become that strict about forcing generics as first-line agents or otherwise putting significant policy or prior authorization in place for branded HIV drugs.
An outcry would result if patients are forced to change their existing therapy regimen from an STR to a multitablet generic-containing regimen, especially if they are well-controlled on the former, said Stevens.
The general rule in the coverage space is the more a given disease is treated by specialists, or even subspecialists, the less likely payers will try to overly manage care, said Kolassa. He cited oncology as the best example, where even the most restrictive payers cover everything within National Comprehensive Cancer Network guidelines. Areas like HIV and oncology are not “low-hanging fruit” for payers to micromanage compared to statins. There are much greater savings to be reaped from generics in a managed care statin budget compared to an overall HIV budget, he said.
Copayments for individual generic drug components can sink their overall economic value, said Dr Renslow Scherer, professor of medicine, Department of Medicine, University of Chicago. If there is a USD 20 copay for an STR, individual drug costs create three-times the patient cost burden, he said. HIV patients “are often on the economic margins” and may look for ways to shortcut a regimen, and perhaps not take all three drugs as indicated in an effort to cut costs, he said.
Assuming equal efficacy of a generic efavirenz regimen to its branded counterpart, there is still a question of whether adherence and compliance to therapy may be compromised by going from one pill to multiple, said Walensky.
While there may be a less expensive list price for individual components of a combination product once available generically, there is an increased pill burden, and patients are less likely to take them reliably, Kolassa said. Less drug efficacy would result, he noted.
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