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November 29, 2012 3:31 pm

Vertex’ Kalydeco faces UK price pushback though solid cystic fibrosis data warrants funding settlement

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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

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Vertex Pharmaceuticals’ (NASDAQ:VRTX) Kalydeco (ivacaftor) for the treatment of cystic fibrosis (CF) may be experiencing pricing pushback in its ongoing UK reimbursement review, experts said. Robust data should trigger a settlement, but potentially lower than the current GBP 182k (USD 294k) per patient, per year listed price, they added.

Vertex could not be reached for comment.

Kalydeco was approved in the EU on 27 July 2012 and has been described by experts as a breakthrough CF drug able to target the underlying cause of the disease. The drug was approved in the US on 31 January 2012. Kalydeco’s annual global sales are expected to be about USD 352m in 2013 and to reach USD 685m in 2019, according to BioPharm Insight data.

Vertex is now in the EU launch process and having discussions with reimbursement authorities, including a review by the Clinical Priorities Advisory Group (CPAG), established to provide reimbursement advice to four designated specialist commissioning groups (SCGs) in England. These SCGs will make the final decision on whether the drug should be funded in the UK.

The last CPAG meeting, on 22 October, resulted in a request for further analysis of Kalydeco’s economic benefit. Following completion of the analysis, discussions have taken place between NHS national representatives and Vertex. Members of the UK CF trust were also observers at the meeting. A final yes or no decision by the four SCGs on whether the drug will be reimbursed in the UK is expected to be announced by mid-December, said a UK CF trust spokesperson.

Discussions up to now are likely to have included any clarifications on data and also “behind closed door bargaining” on the price, said the spokesperson.

A UK pulmonologist claiming knowledge of the ongoing discussions suggested Vertex was asked to come back to the table with a lower price. The CF community is confident on a settlement, he stated.

There have been conversations about cost in the ongoing discussions, the spokesperson said. Whilst the list price will remain the same, a reimbursement price in the UK may potentially be re-negotiated. Neither party is duty bound to disclose the final agreed cost, however, said the spokesperson.

Kalydeco is approved for CF patients with the G551D mutation, which affects approximately 5% of the CF population worldwide. On 7 June 2012, Vertex presented follow-up data for Kalydeco and showed durable improvements in lung function, respiratory symptoms and weight gain for up to 96 weeks treatment.

One source said it was likely Vertex would “stumble across pricing hurdles, as the drug promises survival without the hard evidence.” However, the clinical trial results are brilliant, and the drug looks like a real disease modifier, as opposed to a symptom-control drug, he said. A disease modifier would be totally novel for the CF indication, hence valuable, the source added.

Current approved drugs for CF include Roche (VTX:ROG)/Genentech’s Pulmozyme (dornase alfa), Gilead Sciences’ (NASDAQ:GILD) Cayston (aztreonam lysine) and Pharmaxis’ (AUX:PXS) Bronchitol (inhaled mannitol). These drugs, however, are not disease modifying and just treat symptoms associated with the genetic disease.

The drug is very expensive, however, it is also very effective as shown by convincing data, said a UK reimbursement expert. There is a general expectation that negotiations will see Kalydeco secure a positive outcome with the SCGs in the UK, he added.

A second reimbursement expert said the UK would no doubt enforce a tough review as it weighs data from Kalydeco’s trial against its price, and so price-lowering negotiations are likely. If a settlement is not reached, the decision could be quite controversial, and patient-advocacy groups would no doubt get involved, added the first reimbursement expert.

Last week German review body IQWiG gave the drug a positive review for reimbursement.

Vertex has a current market cap of USD 8.6bn.

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