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Sarepta Preps For Sales As Insurers Unlikely To Deny Duchenne Drug

Xconomy Boston — 

Kathryn Wagner treats boys with Duchenne muscular dystrophy, a rare and fatal genetic disease. She thinks the first drug ever approved to treat Duchenne is “horrendously expensive,” and she’s not comfortable with the data that the FDA said was good enough to merit the approval, which was announced with great controversy this week.

But Wagner (pictured), the director of the Kennedy Krieger Institute’s center for genetic muscle disorders in Baltimore, said she will prescribe eteplirsen (Exondys 51), developed by Sarepta Therapeutics (NASDAQ: SRPT), for the 13 percent of Duchenne patients eligible for the drug. It looks “extremely safe,” she told Xconomy, and there’s little else to help these patients, whose muscles progressively fail, sending them into wheelchairs by their teens and typically leading to death in their 20s.

(Wagner is also an investigator in an ongoing eteplirsen trial.)

There are an estimated 5,000 people with the mutation that eteplirsen targets in the U.S. and Europe, where Sarepta plans to ask for approval by the end of the year. There are about 300,000 people worldwide with Duchenne, according to the nonprofit group CureDuchenne.

With this week’s U.S. approval, patients and their families can celebrate a victory that they helped achieve with an intense lobbying effort. A drug that has not yet proven in clinical trials that it can benefit patients is about to hit the market at an annual average price of $300,000 a year. Drug prices have become a red-hot topic in the U.S., and insurers are more emboldened to push back against patients and drug companies. But it’s unlikely anyone will push back against eteplirsen.

Payers are “always fumbling to reimburse [for rare disease drugs] as quickly as possible,” said RBC Capital Markets analyst Simos Simeonidis, noting that the budget hit to any one payer from such a small patient group is better than an avalanche of bad publicity. “They don’t want to be the Martin Shkreli of reimbursement.”

Xconomy asked insurers and their purchasing agents, known as pharmacy benefit managers, about their plans to cover eteplirsen. The largest U.S. PBM, Express Scripts, will review the drug soon. If it provides “clinical benefit above what is already on the market,” Express Scripts would cover it regardless of cost, said Express Scripts spokesman David Whitrap. “When we make our determination, we may have additional comments on the product’s value and price,” said Whitrap. Other insurers and PBMs didn’t respond to requests for comment.

When asked if Sarepta would carry the cost of the drug with its patient assistance program if payers hesitate, CEO Ed Kaye said, “We expect payers will take into consideration that this is the only approved drug for a rare fatal pediatric disease.” He said this week he expects coverage decisions within 90 days of patient requests.

While Wagner is offended by the price tag, which Sarepta said will be based on a patient’s weight, she’ll prescribe it—with insurers picking up the tab—hoping that eteplirsen might keep her patients walking longer, or breathing without ventilators longer, than they otherwise would have.

But Wagner nor anyone else is confident about those outcomes. Her lukewarm acceptance of eteplirsen is a crystalline example of the controversy surrounding its approval. Many FDA scientists reviewing the drug did not want to approve it. They were overruled by the agency’s top drug evaluator, Janet Woodcock, an FDA staffer for more than two decades and a proponent of opening FDA’s drug oversight process to more patient input. When FDA staff appealed her decision to the commissioner, Robert Califf, he sided with Woodcock.

Woodcock said in a statement upon eteplirsen’s approval that the data Sarepta had accumulated were “reasonably likely to predict clinical benefit,” but the decision came with a condition: To keep eteplirsen on the market, the company must prove the benefit with post-approval studies. If it does not report positive results to the FDA by 2021, the agency could pull eteplirsen from the market.

“I really hope that the confirmatory trial is positive, because I hope there’s a drug for these kids,” said Simeonidis. “If this drug doesn’t work, and you keep giving them basically a placebo, and then you charge them $300,000, that’s horrible.”

With her power play, Woodcock is taking this risk. Her colleagues, including the FDA’s acting chief scientist Luciana Borio and director of the FDA’s office of drug evaluation-I Ellis Unger, were critical of the drug’s data, the main set being drawn from a dozen patients. In their dissent, published Monday, they expressed fear of setting a precedent that “political pressure” and intense lobbying from drug companies, politicians, and patient advocates—who often work with or take funding from drug companies—will sway FDA decisions and lower its approval standards.

Steven Joffe, a pediatric oncologist and medical ethicist at the University of Pennsylvania, tweeted after the approval that it “de facto, takes us back to the days before Kefauver Harris”—the 1962 U.S. law that modernized drug regulation and enforcement—“when safety alone was sufficient for approval.”

Even Commissioner Califf, while backing Woodcock’s decision and defending her handling of the situation, noted anomalies in her conduct and the review process. Califf also called for a “formal correction or retraction” of a 2013 study published in the Annals of Neurology on eteplirsen, which he wrote is “now known to be misleading,” first reported by Retraction Watch.

But he ultimately gave eteplirsen the green light.

The ruling gave Sarepta a monopoly, and it has quickly moved this week to raise up to $225 million by selling its publicly traded stock, which has more than doubled in price this week. (It was approaching $61 a share in mid-day trading Thursday.) The firm also is likely to earn nine figures by selling an FDA voucher it earned by gaining approval of a drug for a rare pediatric disease. Similar vouchers, redeemable for a fast FDA review of another drug, have sold for up to $350 million.

Sarepta’s sudden fortunes are all the more shocking because the FDA earlier this year rejected two other Duchenne drugs: drisapersen from BioMarin Pharmaceutical (NASDAQ: BMRN) and ataluren from PTC Therapeutics (NASDAQ: PTCT). The agency called BioMarin’s data “inconsistent and in some cases contradictory” and said PTC’s ataluren application was “not sufficiently complete to permit a substantive review.” Both companies failed Phase 3 trials, but the companies claimed that post-hoc analyses showed the drugs were benefiting patients. BioMarin has since discontinued development of drisapersen. PTC said in July that its efforts to appeal the FDA’s rejection of ataluren haven’t yet succeeded.

Eteplirsen’s price tag is in line with some rare-disease drugs, but above the average of $111,820, per patient, per year between 2010 and 2014, according to a 2015 report from EvaluatePharma. Eculizumab (Soliris), for a rare blood disease, costs more than $400,000. Elosulfase alfa (Vimizim), for a rare metabolic disease, costs more than $380,000.

The difference, however, is that those drugs showed significant clinical benefit, said Simeonidis. Eteplirsen seems to increase the production of dystrophin, the muscle protein Duchenne boys lack—that’s what the data examined by FDA scientists showed. Woodcock’s dissenters at least agreed with her on that point. But they strongly disagreed that the dystrophin boost could predict a future health benefit.

When asked if Sarepta would consider giving back money if the drug failed to work—a pay for performance scheme that a few drug makers have begun to explore—Kaye said Sarepta has not discussed it with payers.

The company is trying to collect data to show the drug improves patients’ lives—such as the preservation of lung or upper arm function, or the ability to use a keyboard, mobile phone, or wheelchair, Kaye says. The idea is to eventually help justify why these patients—particularly older ones whose disease is further along—should be on therapy.

But until those data arrive, Kathryn Wagner of the Kennedy Krieger Institute will have to manage her patients’ expectations. “I would tell them that this is a drug with potential benefit, [and] that we’re still waiting for more data,” she said. “And that it looks like the risks are minimal.”

Wagner said the safety problems seen in the clinical trials, infections or clots, were related to the infusion of eteplirsen, not to the drug itself. But others believe there are risks involved nonetheless. “I wouldn’t be comfortable saying the risks are minimal when there’s so little data,” says Sharon Batt, a bioethics professor at Dalhousie University in Nova Scotia.  “There are also costs to patients in putting their hopes in something—emotional costs—and I think those are important and are often underestimated.”

Eteplirsen’s average $300,000 annual price tag would be for a boy of 25 kilograms (roughly 55 pounds), according to Kaye, which means the price would increase if the boys gain weight, or come back down if their disease progresses and their muscles atrophy. Single dose 2 ml and 10 ml vials of the drug, which is either infused intravenously or through a port, cost $1,600 and $8,000 respectively. It’s expected, Kaye said, that patients will be on the drug for the rest of their lives. Leerink analyst Joseph Schwartz estimated in a research note that eteplirsen could peak at more than $900 million in annual sales worldwide.

While analyst predictions of future drug sales should always be viewed skeptically, there’s no argument that, thanks to the historic FDA decision, Sarepta now has an open window to make as many of those millions of dollars as possible.

“Will insurance companies say, ‘No, you can’t have this drug when it is the absolute only drug approved for your disease?’” said Debra Miller, the CEO of Cure Duchenne. “I don’t know, that’d be pretty tough for an insurance company to say.”

Image of Kathryn Wagner courtesy of the National Institutes of Health.