I

t looked like a surefire way to make billions.

A year ago, two new drugs that used a novel mechanism to drive down cholesterol levels came on the market, and were promptly crowned as blockbusters in waiting. Analysts estimated sales at more than $3 billion a year.

But the two drugs have been commercial flops, in part due to a complicated reimbursement system that has frustrated doctors, confused patients, and left the biotech industry worried about the implications for other high-priced drugs in the pipeline.

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“These launches so far are close to, if not the biggest, wastes of development and commercial investment in recent industry history,” said Geoffrey Porges, a biotech analyst at Leerink.

The companies behind the drugs — Amgen and the partnership of Sanofi and Regeneron — are spending hundreds of millions to promote their products but have reaped a mere fraction of that in revenue. “You don’t need to be in finance to know that that’s not a sustainable business proposition,” Porges said.

No one disputes that the new drugs, Repatha and Praluent, are excellent at lowering bad cholesterol, or LDL. They often succeed where the traditional treatment — an inexpensive class of drugs called statins — fails. The problem boils down to doctors who are reluctant to write prescriptions, insurers who are unwilling to pay for them, and drug companies that have failed to understand a fast-changing marketplace.

The failures could send a chill through the still-booming biotech business, which relies on the idea that the risky, expensive process of developing new drugs can one day pay off big.

The new treatments work by blocking a protein called PCSK9, thereby freeing up the body to clear out LDL lingering in the blood. In clinical trials, PCSK9 blockers were able to slash LDL cholesterol by more than 50 percent, even when added to a maximum dose of statin drugs like Pfizer’s Lipitor.

Cardiologists say the drugs could save lives. An estimated 15 percent of the roughly 74 million Americans with high cholesterol have alarmingly high LDL levels despite taking other drugs. Many would be candidates for the new treatments.

And yet the new therapies have only been prescribed about 120,000 times, according to data from QuintilesIMS, grossing just above $150 million combined in the past year.

Why aren’t they flying off the shelves?

For one, some doctors are hesitant to prescribe them until there’s more information said Dr. Pradeep Natarajan, a cardiologist at Massachusetts General Hospital.

Yes, the treatments lower cholesterol, but does that actually ward off heart attack and stroke? Long-term results on how PCSK9 blockers affect broader health and mortality won’t be available until next year.

Another hurdle: Getting insurers to pay for the drugs, which both have list prices of about $14,000 a year.

To secure coverage for a single patient, doctors must submit pages and pages of documentation to prove that patients have already tried at least two statin drugs to no avail, or that they have an inherited disorder that results in sky-high LDL levels. In some cases, the paperwork has more than 40 questions.

And insurers almost always say no.

Payers have denied more than 88 percent of first-time prescriptions for patients with commercial insurance in the past year, according to Symphony Health Solutions. For those on Medicare, the first-time rejection rate was about 77 percent.

And even after an average of five appeals, more than two-thirds of prescriptions still aren’t getting covered, according to Amgen.

“There’s absolutely frustration among my colleagues,” said Natarajan, who specializes in treating patients with particularly high cholesterol. “They’re writing prescriptions where they think [PCSK9 drugs] are indicated, and then payers are saying no.”

But the people doing the rejecting say they’re justified.

When PCSK9 drugs first won approval, doctors were writing prescriptions for patients who didn’t fall in the categories that the drug was approved to treat, according to Dr. Steve Miller, chief medical officer of Express Scripts. Companies like his are paid by insurers and employers to negotiate drug prices and determine which treatments get reimbursed.

PCSK9 therapies are expensive, and if the likes of Express Scripts don’t limit their use, it could cost society upward of $100 billion a year, Miller said.

That figure is “absurdly off-base,” responded Dr. Joshua Ofman, Amgen’s head of value and access. Payers cooked up a doomsday economic scenario to help negotiate rebates from drug manufacturers, Ofman said, and they’ve since instituted “a very onerous practice designed to keep patients from getting these drugs.”

If data that will roll out in the next few years prove that PCSK9 drugs save lives, both payers and drug makers expect them to be more widely used. Cardiologists say they’ll be quicker to write prescriptions if they can confidently say patients will be less likely to suffer heart attacks or strokes. And the price might even come down, as Pfizer expects to debut a PCSK9 inhibitor of its own next year, looking to steal market share from Amgen, Sanofi, and Regeneron.

But the squabble over cost, access, and availability is unlikely to end any time soon. And the fear among biotech insiders is that the commercial disappointment of PCSK9 therapies will imperil new cardiovascular therapies.

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The Medicines Company, a New Jersey biotech, is at work on a next-generation PCSK9 drug that could be dosed just twice a year instead of monthly or every two weeks. And Esperion Therapeutics, headquartered in Michigan, is developing a pill that attacks LDL cholesterol through another mechanism.

While each is years away from approval, the companies have been operating under the assumption that their drugs will be profitable if they can simply show they reduce cholesterol. The uphill battle with first-generation PCSK9 treatments suggests otherwise.

“The interesting question is whether the industry will continue to invest — and whether investors will continue to support — further development of drugs for these metabolic targets where very large studies [of health effects] are required at tremendous cost, and where the commercial return is disappointing,” said Leerink’s Porges. “I think there’s going to be some reconsideration of that if this trend continues.”

And that could have a downstream effect on patient care, said Dr. Steven Nissen, a cardiologist at the Cleveland Clinic.

“If I were the CEO of a major pharmaceutical company, and I knew I could not recover the cost of developing an innovative medicine, I wouldn’t do it,” Nissen said at the Cleveland Clinic’s Medical Innovation Summit this week.

Stuck in the middle are physicians and patients, waiting on the industry to prove its drugs are effective and wading through payer bureaucracy to actually use them.

“Limiting access because of cost is reasonable from insurer’s perspective, but from the patients’ perspective, they should be getting these medicines,” said MGH’s Natarajan. “I don’t think we’ve achieved that balance yet.”

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  • 1. ESPR Bempedoic acid only viable alternative left when it comes to market in 2018. Current PCSK9 inhibitors too expensive. 2. Statin Use Linked to Increased Parkinson’s Risk: http://www.medscape.com/viewarticle/870996 3. With recent positive results, Esperion will include patients on any dose of statin in global Phase 3 LDL-cholstrl lowering efficacy studies scheduled to begin before year end.

    • The stats that I’ve seen for cholesteral reduction do not justify the use of statins. As they say on SpaceDoc, any surgery or injectible with these results would be stopped, because the risk percentage is higher than the benefit percentage.

      I do know that my hospital network plan and doctor did everything to deny that I was poisoned. I do not think that I am part of the stats about this. i wonder how many people are treated the same way?

  • Totally accurate. Very hard for those of us engaged in primary prevention to make sense of. And yet despite the controversy we are held accountable for outcomes related to cholesterol

  • So far no one has mentioned that the cardiac outcomes studies with PCSK9 Rx may fail. But lowering cholesterol is no assurance of lowering cardiac risk, as the last couple of failed drugs in the field with a new mechanism have shown. Thus doctors and insurers alike have learned to be wary of treating a lab variable instead of a patient.

  • I think that Pharma is killing the goose that lays the Golden Egg. There is only so much money for anything. The prices are obscene

  • Statins are junk. Heart attacks are not just about cholesterol. It has been a “big lie” for so long even the medical community bought-into-it as “truth”.
    Check out Spacedoc.com.

    • How many people do statins help- one out of a hundred- 5 out of a 100? I’m one of the people crippled by statins–They ruined my Achilles tendons for one thing.

  • That phony $2.6 Billion figure includes all the junk-science marketing studies, the conference sponsorships, the KOL schmoozing, the DTC ads, the Launch parties, and ALL the non-scientific junk the marketers can think of. Real costs? 100 to 200 million.

    The only thing unsustainable about these business models is the obscene pricing that has no relation to cost of production, except in the feverish imaginations of stock-option-addled Pharma execs.

    • $2.6 billion number is fed by the Pharma companies to Tuft and no independent outfit has authenticated them. Trash fed and regurgitated. Fraught with all kinds of cooked numbers.

      Funny part is financial analysts an news media has bought the numbers as it is coming from a university that is funded by Pharma.

  • No matter how PCSK9 is skinned it is expensive and only going to be used fora limited population of the developed world where the healthcare system is mutually subsidized. Outside the subsidized systems no one is going to pay the prices slated for the developed world. Thus folks who have defined a drug to be a blockbuster might have redefine their terminology.

    One additional fact we will have to reckon with and it is that going forward every drug is going to be expensive and for the selected few till the pharma companies can prove efficacy and value against what is already part of the generic arsenal. Why would any one pay $2.00 per drug (efficacy unknown) even if taken once a day when the patient can get by a drug use a proven drug that costs $1.00 a day and is 90% as good as the new drug.

    We all need to think differently and if we don’t, we can be rest assured that every new bio drug will have to compete against what is existing. Marginal drugs have no value. Patients need drugs that cure rather than feel good today new drugs.

  • A recent study by Tufts University estimated the cost of developing a new drug at $2.6 billion. One of these drugs sells for $14,000/year. Let’s assume the patient receives the drug for 20 years, of which (conservatively speaking) 10 years it is under patent to the innovator. Let’s further assume that the cost of production and marketing is 1/4 of that $14,000/patient/year price tag. So over 10 years the innovator takes in $112,000/patient, barring any cost increases (not gonna happen). Divide $2.6b by $112,000 and you have to have fewer than 25,000 patients take the drug for 10 years each to make back your development cost. Twenty-six percent of Americans over 40 take statins for high cholesterol, so finding hundreds of thousands of people who might qualify for alternative therapies shouldn’t be too difficult. Expecting payers and patients to shovel over increasingly large piles of cash for drugs without appropriate outcomes data may be the unsustainable aspect of this business plan.

  • I am not surprised to hear this. I had a patient with a very high ldl who could not tolerate multiple statins due to myalgias. I tried to give him repatha and it was a nightmare despite him being the perfect patient for it. The insurance company had us running in circles for a year until it finally was approved last week. Of course he spent another year of his life with an ldl (not total mind you but ldl) of 350. I can totally see why sales are lousy. These are great medicines that have a clear and important clinical niche but good luck getting the lords of the manor (the insurance companies) to pay for them!

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