How much is too much?
The high cost to treat cystic fibrosis calls for price-to-value conversations.
May 31, 2019
“[A 23-year-old student with cystic fibrosis] … has to pop enzymes with every meal to maximize the nutrients his body absorbs. While he sleeps, 1,200 calories of a nutritional shake drip through a tube directly into his stomach. There are the inhaled drugs — sometimes antibiotics, always a mucus thinner — that he breathes in through a nebulizer, and a blue vest that slips on, inflates, and vibrates, a 30-minute shaking session that he does twice a day to help clear the mucus that gunks up his airway and lungs.”1
About 30,000 people in the U.S. have cystic fibrosis. This is a progressive genetic disease that damages the lungs and digestive system. It’s caused by mutations in a specific gene, the cystic fibrosis transmembrane conductance regulator (CFTR) gene.2
One manufacturer, Vertex, has launched three CFTR modulator therapies since 2012. Kalydeco® (ivacaftor), Orkambi® (lumacaftor/ivacaftor), and Symdeko® (tezacaftor/ivacaftor), are all designed to correct the malfunctioning CFTR gene. These breakthrough therapies each cost about $300,000 annually.
Cystic fibrosis spending could double in 2019
What are the cost impacts of treatments for cystic fibrosis? And what are the industry pressures to adjust those prices? Will broader use of these high-cost treatments affect health insurance premiums? These questions are not easy.
Prime’s integrated medical and pharmacy real-world data provide valuable information for discussion. From 2015 to 2018, we have seen a dramatic twelve-fold per member per month (PMPM) increase from $0.08 to $0.96. This is a compound annual growth rate of 89 percent.
Prime conducted research this spring that showed CFTR modulator spend could double if 100 percent of mutation eligible members are treated. These added costs could result in higher premiums for members.
Current and forecasted cystic fibrosis transmembrane conductance regulator (CFTR) modulator total paid per member per month (PMPM)
Based on an increase in the current treatment rate, our study shows that modulator costs could reach $1.21 PMPM by December 2019. If the treatment rate among eligible members increases to 100 percent, costs could increase to as much as $2.07 PMPM by the end of 2019.
Who is making the price to value calculations?
The Institute for Clinical and Economic Review’s (ICER) report on CFTR modulators suggests a 77 to 90 percent discount is needed to bring the modulator price in line with the value these treatments offer.4 The report states: “The prices for CFTR modulators are too high, harming patients and families today while threatening the health care system’s ability to maintain access for all patients to important future clinical advances.”
QALY – what exactly does that mean anyway?
In its most basic definition, a quality adjusted life year, or QALY, stands for one year in good health. Variables for an improved quality of life range widely. Does it extend the person’s life span? Can the person go back to work? Does it help the person walk again that couldn’t before? Does it prevent future hospitalizations?
Several factors go into a thoughtful QALY calculation. ICER has a helpful report on these calculations.
In the United States, we use a range of $50,000 to $150,000 to quantify the value of that one year of good health. (Other countries around the world use different numbers.)
As reported by the ICER, CFTR modulator drugs should be priced at a 77 to 90 percent discount from their current list price to achieve a fair price to the value they provide. Value-based deals can include rebates or other forms of discounts for lack of persistency/adherence, lack of effectiveness as measured by disease progression, hospitalizations, respiratory infections requiring antimicrobial therapy, total cost of care, and disease specific cost of care. However, all CFTR modulator drugs are manufactured by a single company, Vertex, and there is no competitive motivation for the manufacturer to enter into market access contracts or outcomes based contracts. This is not unique to CFTR drugs, we have seen this in many specialty categories without competition (e.g., other enzyme replacement disorders, cancer treatments).
New York state is in a stand-off with Vertex on drug price
A New York law established in 2017 set an annual drug spend target for the State. If Medicaid could identify specific drugs driving the spend above the target level, the price of those drugs was evaluated.
If the drug manufacturers and New York Medicaid cannot come to an agreement on a lower price, Medicaid can trigger a public process to determine a specific target price, forcing the manufacturer to provide a supplemental rebate.
This is what happened in 2018 with Orkambi. New York determined it could not afford $290,000 for one year of one cystic fibrosis medicine for one patient.
In 2018, New York identified 30 drugs that were priced too high (including Orkambi). In accordance with the new law, New York asked the manufacturers of those 30 drugs for deeper discounts. Vertex, Orkambi’s manufacturer, was the only company that refused to lower the price of its drug to the level the State required. The case is still in litigation.4
Progress in genetic medicine is transformational
What’s happening in the treatment of cystic fibrosis is exciting. It’s changing people’s lives. The life expectancy for someone with cystic fibrosis has recently jumped several years – from 41 to 47 years old.5 In 2015, the number of people living with cystic fibrosis over 18 became greater than the number of people living with cystic fibrosis under 18. It’s no longer “a childhood disease.”6
You may not know someone with cystic fibrosis. But you probably know someone with a rare genetic disease. One in ten people have one.7 There are thousands of rare diseases as challenging and tragic as cystic fibrosis. Many of those diseases are moving toward genetic treatment breakthroughs as well. Hundreds of gene therapies are in clinical trials.
For me, that makes the clinical research we do even more meaningful and urgent: we are helping to get the right medicine to the right patients at the right time and right price.
We’re all part of the solution
Health care is hard. And health care is personal. There’s no easy button. And there’s no one right answer. For health care to be sustainable, it needs to change. We all need to participate in the solution.
Prime continues its activities in consumer advocacy organizations like ICER and Campaign for Sustainable Rx Pricing (CSRxP) in hopes that by working together, the market can have an effect on high drug costs.
Prime also holds meetings with Blue Plan medical and pharmacy directors. These quarterly meetings bring clients together with experts from Prime’s clinical, formulary, health outcomes and specialty teams. Clients bring market-specific insights and perspective. They engage in the decision-making process for the specialty drugs that have such a big impact on their medical spend.
Working together with our clients as a total drug management company helps us do the most to improve health outcomes and lower cost of care. Together we shape drug management strategies for the future.
- “As cystic fibrosis drugs deliver new hope, not everyone is being swept up by scientific progress,” by Andrew Joseph. February 4, 2019. © 2019 STAT Accessed at: https://www.statnews.com/2019/02/04/cystic-fibrosis-patients-nonsense-mutations/
- Accessed at: https://www.cff.org/Search.aspx?topic=270&srchtext=life+expectancy&page=2&sort=1
- A look at CFTR modulators for cystic fibrosis. Report at a glance. Accessed at: https://icer-review.org/wp-content/uploads/2018/06/MWCEPAC_RAAG_060718.pdf
- “A Drug Costs $272,000 a Year. Not So Fast, Says New York State.” By Katie Thomas. June 24, 2018. New York Times. © 2019 The New York Times Company. Accessed at: https://www.nytimes.com/2018/06/24/health/drug-prices-orkambi-new-york.html
- “Survival Trending Upward But What Does This Really Mean?” By Bruce C. Marshall, MD, November 16, 2017. Cystic Fibrosis Foundation. Accessed at: https://www.cff.org/CF-Community-Blog/Posts/2017/Survival-Trending-Upward-but-What-Does-This-Really-Mean/
- Cystic Fibrosis Patient Registry Highlights: 2016. Accessed at: https://www.cff.org/Research/Researcher-Resources/Patient-Registry/2016-Cystic-Fibrosis-Foundation-Patient-Registry-Highlights.pdf
- Rare disease facts and figures: 1 in 10 Americans is living with a rare disease. Global Genes. Accessed at: https://globalgenes.org/2009/02/27/rare-disease-facts-and-figures/
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