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July 11, 2018updated 22 Nov 2021 2:34pm

Pfizer price hikes: do rare cancer drugs warrant higher prices?

Last week, it was revealed that pharmaceutical giant Pfizer conducted its second round of US drug price hikes this year despite public and political pressure against the rising cost of pharmaceuticals.

By GlobalData Healthcare

Last week, it was revealed that pharmaceutical giant Pfizer conducted its second round of US drug price hikes this year despite public and political pressure against the rising cost of pharmaceuticals. These hikes are contradictory to the pledges made by Pfizer’s rivals to raise drug prices only once per year. It seems that Pfizer also dismissed the proclamation by President Donald Trump in May that the industry would be granting massive voluntary concessions for pharmaceuticals this year, lowering the prices of only five products approximately 16–44%.

On 2 July, The Financial Times reported that around 100 of Pfizer’s prescription medicines have been subject to up to 10% price increases, averaging 9.4%, effective as of July 1, 2018. Included in this list is Xalkori (crizotinib), which is recommended for the treatment of metastatic non-small cell lung cancer (NSCLC) treatment for patients with rare mutations in the anaplastic lymphoma kinase (ALK+) or receptor tyrosine kinase (ROS1+) genes. The marketing authorization for these biomarkers was granted through a priority review, and Xalkori received orphan drug designation. GlobalData epidemiologists anticipate that 85% of lung cancer cases are NSCLC, of which 5.13% are ALK+ and 1.47% are ROS1+ in the US. With overall response rates (ORRs) of 65% and 72% for these indications, respectively, Xalkori seems to be a viable treatment choice for patients.

This May, Pfizer revealed that the FDA assigned Xalkori two breakthrough therapy designations in two new indications: metastatic NSCLC with MET exon 14 alterations (MET+) and ALK+ anaplastic large cell lymphoma (ALCL), a subtype of non-Hodgkin’s lymphoma (NHL). Once approved, Xalkori will be the first therapy to be marketed for three different biomarker-driven indications, will further benefit the 2.46% of NSCLC patients who are affected with MET+, and will benefit the 3% of adult non-NHL patients affected with ALCL and 10–15% of childhood lymphomas (Ferreri et al., 2012).

For MET+ NSCLC, Xalkori demonstrated impressive antitumour activity with 44% partial responses, 50% cases of stable disease, and no progressive disease in evaluated patients. For ALK+ ALCL, a 63% rate of two-year progression-free survival (PFS) was demonstrated in a group of lymphoma patients, and ORRs of 83% and 90% were demonstrated in two treatment arms of a paediatric patient group. These favourable prognoses raise the question of whether payers should be more accepting of higher prices for oncology medicines, particularly in rare but life-threatening conditions where there are limited treatment options. Furthermore, questions have also been raised about whether there should be any discussion on the hefty price tags at all, since rare cancers have five-year relative survival rates that are 15–20% lower in absolute terms than common cancers, and can severely affect patients’ quality of life.

Rare cancer drugs: the cost-effectiveness debate

The average wholesale price for Xalkori was $19,266.97 per patient for one month of treatment in January 2018. Last year, Xalkori brought in $594m in revenue worldwide behind the leaders in Pfizer’s oncology portfolio, Ibrance (palbociclib) ($3.1bn) and Sutent (sunitinib malate) ($1.1bn). Xalkori has already brought in $153m in Q1 2018, an 8% increase from Q1 2017. Xalkori is the first and only FDA approved treatment for patients with ROS-1 positive NSCLC.

Conversely, within ALK+ NSCLC, treatment with Xalkori is the most expensive out of all the market players, including Takeda’s Alunbrig (brigatinib), Roche’s Alecensa (alectinib), and Novartis’s Zykadia (ceritinib), which had monthly costs of $18,639.60, $17,414.20, and $11,947.41, respectively. However, concerns remain about whether the health benefits gained from these treatments warrant their relatively high costs.

Recent research compared the long-term clinical and economic impact of Xalkori and Alecensa from a US payer perspective, and concluded that Alecensa may be a cost-effective therapy for patients due to an increased PFS and better quality of life (Carlson et al., 2018). Similarly, Zykadia was demonstrated to be more cost-effective than Xalkori, conferring greater health benefits at reduced total costs (Zhou et al., 2018). This raises the question of whether the price of medicines should be relatively proportional to the overall health benefits they provide, and if so, which health outcomes should be used to assess the benefits.

This approach of value-based pricing (VBP) is becoming increasingly important in the US, but it is currently difficult to execute as there are varying approaches to assessing the value of oncology medicines. These include the Institute for Clinical and Economic Review (ICER) Incremental Cost-Effectiveness Ratio Calculator, Memorial Sloan Kettering Cancer Center’ (MSKCC) DrugAbacus system, American Society of Clinical Oncologists (ASCO) Value Framework, and National Comprehensive Cancer Network (NCCN) Evidence Blocks.

According to The Financial Times, Pfizer joins Acella, Acorda and Intercept in raising drug prices this year, contributing to the escalating costs of drugs. GlobalData expects the debate on whether or not these increases are justified from a pharmaco-economic perspective to continue.

UPDATE 11/07/18: Pfizer has announced that it will temporarily reverse its price increases.

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