When it comes to new drugs, how much are we willing to pay for innovation? That question, touched on by Craig Garthwaite and Benedic Ippolito in their First Opinion on drug prices, deserves a deeper look.
A new biologic drug, Ultomiris, made by Alexion Pharmaceuticals (ALXN), is a prime example of innovation that may be too expensive.
The Food and Drug Administration approved Ultomiris, a biologic drug, the day before the most recent federal government shutdown began on Dec. 21. It is indicated for the treatment of paroxysmal nocturnal hemoglobinuria, an inherited disease in which the body’s immune system destroys its healthy red and white blood cells and platelets.
According to Alexion, the new drug is an improved version of its existing blockbuster drug, Soliris, which will soon lose its patent protection. Both drugs are proteins that bind and inhibit the C5 complement protein, which is part of the immune system that helps clear microbes and damaged cells from the body. In people with paroxysmal nocturnal hemoglobinuria, the complement pathway becomes overactive and turns against the body’s healthy blood cells.
The FDA approved Soliris to treat paroxysmal nocturnal hemoglobinuria in 2007. It initially earned Alexion nearly $1.1 billion a year; additional approvals for other rare diseases with similar biological dysfunctions have increased annual sales to $3.5 billion. At a cost of more than $500,000 per year, Soliris is one of the most expensive drugs in the world. And rightfully so: Not only is it the first of its kind, but it is extremely effective at treating certain rare diseases once thought to be fatal.
When Ultomiris finally makes its way onto the market, it will be only slightly less expensive than Soliris, costing $458,000 per year. Both drugs must be administered in a hospital or doctor’s office by intravenous infusion.
In a large study comparing the two drugs, Ultomiris was found to be “non-inferior.” In other words, it has the same clinical effect with the same associated risks as its predecessor, Soliris.
Ultomiris is a slightly bigger protein than Soliris and has a tweak that lets the body recycle and reuse it. It’s also given at a higher dose than Soliris. Together, these mean that Ultomiris is administered every eight weeks while Soliris is given every two weeks.
To be sure, reducing how often a drug must be administered reduces a logistical burden on patients and a cost burden on payers. For each Soliris treatment, hospitals charge additional fees associated with the IV infusion procedure to administer the drug. For example, Atrium Medical Center, in Dayton, Ohio, charges $89,000 per treatment to the patient’s health plan.
Looking at these drugs side by side, I can’t help but ask: Is the advance represented by Ultomiris worth an additional 10 or more years of patent protection, which will prevent biosimilars from entering this market for years to come and force patients and insurers to continue paying high prices for the same clinical benefit?
To truly tackle the high cost of drugs, we must have a robust and extensive conversation about how we define and award innovation. Do modifications to existing drugs that reduce the frequency of treatments qualify? Or should we award patent exclusivity only to drugs that provide better outcomes for patients? I believe that the approval of Ultomiris offers an excellent starting point for understanding when a new drug represents innovation that is just too expensive.
Alexander Urry is a Winston Health Policy Scholar and master of public health candidate at the Yale School of Public Health studying health care management.