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How Sanofi should think about pricing/rebates for first-to-market PCSK9 inhibitor?

By securing Priority Review for Praluent alirocumab, Sanofi and Regeneron Pharmaceuticals Inc. deprived Amgen Inc. of what could have been a three-month head start with its competing PCSK9 inhibitor. But the partners also put themselves in the position of going first in what could be a game of chicken with payers.

Thanks to the use of a Priority Review voucher, the BLA for Sanofi and Regeneron’s Praluent alirocumab to treat hypercholesterolemia has a July 24 PDUFA date. Amgen’s PCSK9 inhibitor evolocumab has an Aug. 27 PDUFA date.

The proximity of the expected approvals, and the comparability of the published data on the two mAbs, together make the category ripe for a battle for exclusive formulary placement, with pricing and rebates as the only weapons.

While Sanofi and Regeneron will co-promote Praluent in the U.S., the pharma will lead commercialization. As the first mover, Sanofi has at least three options when it comes to setting the price: set the price for Praluent at the high end of the expected $7,000-$12,000 annual cost range with no rebates; set the price high but offer rebates at launch; or set a lower price and wait until Amgen’s evolocumab is launched to start negotiations with payers.

In the first scenario, Sanofi would catch the ire of payers and gain little in the process as five weeks is not much time to build patient and prescriber preference for a new drug – especially with the prior authorization and step therapy requirements payers are planning to impose.

If Sanofi instead offers discounts from the start, it could be seen as a show of goodwill, resulting in more relaxed prior authorization or step therapy requirements. It would also put the onus on Amgen to offer similar or even greater discounts.

However, both that scenario and the third option, launching with a lower price, run the risk of leaving money on the table.

Three payers contacted by BioCentury said they would restrict access to only severely ill patients if the launch price is too high and unaccompanied by rebates, while one payer said it would consider giving Praluent exclusive formulary status if the rebates under the second scenario are large enough. Others have said they will wait until both drugs are on the market before wheeling and dealing for exclusive formulary status.

Sanofi wouldn’t comment on how it will price Praluent or on what it has learned from recent commercial missteps with Zaltrap ziv-aflibercept and Lantus insulin glargine in the U.S.

The pharma had to give 50% rebates on cancer drug Zaltrap because the launch price was too high. And in 3Q14, the pharma revealed it was forced to give steep rebates for its diabetes product Lantus insulin glargine to maintain formulary access, resulting in a flat 2015 sales forecast for its diabetes franchise.

The pharma did say it will use its launch experience with Lantus and cardiovascular drug Plavix clopidogrel to help it build market share for Praluent among high-risk patients who either cannot tolerate statins or who need additional LDL control on top of available drugs.

Amgen said it will draw on its experience in bringing its osteoporosis biologic Prolia denosumab to a primary care market.