[Updated, 10/25/18, 12:15 a.m. See below.] Amgen is cutting the list price of its new cholesterol-lowering drug by nearly 60 percent, a move the company says is intended to make the product more affordable for more patients.
The move is a shot across the bow of Regeneron Pharmaceuticals (NASDAQ: REGN]). The Tarrytown, NY firm recently offered significant price cuts to insurance companies that help boost access to its rival medicine alirocumab (Praluent). But those price cuts come off that drug’s roughly $14,000 per year list price, which Regeneron hasn’t lowered. Amgen (NASDAQ: AMGN) has now done that, setting a $5,850 per year list price for its drug, evolocumab (Repatha). [Paragraph updated to clarify comparison of the drugs.]
The Amgen drug and Regeneron’s drug both block PCSK9, an enzyme that hinders the body’s ability to clear LDL-C, the so-called “bad cholesterol,” from the bloodstream. When these drugs won FDA approval in 2015, their $14,000 annual cost sparked the ire of drug-price watchdogs and pharmacy benefit managers, the companies that act as middlemen negotiating reimbursement for drugs covered under insurance plans.
Amgen and Regeneron initially tried to hold fast to their high prices. An Amgen-funded study last year concluded that its drug’s price was justified because it prevents heart attacks, strokes, and other cardiac problems—and avoids the healthcare costs associated with these conditions. Amgen hoped that those benefits, and offering payers refunds if patients on their plans suffered heart attacks, might help boost access to evolocumab. Regeneron produced its own study showing that its drug saved lives. But the company took a different approach, offering to lower alirocumab’s price if insurers offered some undisclosed concessions.
Regeneron’s tactic worked as the company struck a deal that placed its drug on the formulary, the list of covered drugs, of drug-buying middleman Express Scripts (NASDAQ: ESRX). The Regeneron drug’s net price is now in the $4,500 to $8,000 per year range for payers that agree to lower access barriers.
While the price of the Amgen PCSK9 drug is now in line with the Regeneron drug, Amgen executives say the price cut was a move to make its medicine more accessible to those on Medicare. Most Medicare patients (those who pay a co-insurance for their drugs, based on list price) currently pay $290 to $370 per month out of pocket for evolocumab, Amgen CEO Bob Bradway said Wednesday during a conference call with analysts. With the price reduction, that will now be $25 to 150 per month, he said.
The new, lower price for Amgen’s heart drug won’t be immediate for all patients. In the near term, Amgen will have two versions of evolocumab on the market. The drugs will be identical, except for price. Amgen plans to phase out the higher priced version by the end of 2020, as demand shifts to the lower-priced one, Bradway said.
Murdo Gordon, Amgen’s executive vice president of global commercial operations, said on the conference call that the lower-priced version of evolocumab will be available starting Thursday. Gordon said Amgen had been trying for some time to improve reimbursement and access with rebates but “we were unable to have a direct impact on out of pocket expenses for Part D Medicare patients [who pay co-insurance on their drugs].” He added that “we needed to set a new, lower price” to get evolocumab onto formularies.
Corie Lok contributed to this report.
Photo by Amgen