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April 2, 2017

First Word Pharma

Drugmakers Try New Strategy Amid Price Criticism: Charging Less

By Caroline Chen

  • Some pharmaceutical companies are charging less for drugs as a new strategy amid intense criticism over pricing, reported SwissInfo.
  • Sanofi and Regeneron Pharmaceuticals recently priced their new treatment for atopic dermatitis Dupixent at $37 000 a year, lower than the $50 000-a-year price charged for similar older drugs. Meanwhile, Roche is pricing its new multiple sclerosis drug Ocrevus at $65 000, 25 percent cheaper than Merck KGaA’s older treatment Rebif.
  • “We believe that Sanofi and Regeneron and the payers are heading perhaps towards setting a new paradigm,” commented Regeneron CEO Leonard Schleifer, “but it ain’t over yet.”
  • According to Roger Longman, CEO of data analytics company Real Endpoints, “in the old days, if you could convince the physician that one drug was slightly better than another, then he or she would prescribe it, it didn’t matter what the cost was…now, the decision makers are the payers: the insurance companies, the employers.”
  • Regeneron suggested that the actual price it gets is likely to be in the low $30 000s range, which is in line with the net prices other drugmakers get from similar products, said Leerink analyst Geoffrey Porges.

Similarly, while Roche’s list price for Ocrevus is 10 percent lower than Biogen’s drug Tysabri, the take-home pay is likely to be similar since Ocrevus is the only option for patients with the primary progressive form of multiple sclerosis. Roche will not need to offer as big discounts to be covered, Porges noted.

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