Will Pay-For-Performance Really Suit The Cancer Drug Space?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

If Express Scripts gets its way, there could be a new pricing model around the corner for increasingly expensive cancer meds. The prescription drug benefits manager (PBM) announced recently that it’s setting out to negotiate with drug companies to establish yet another pricing model based on a drug’s efficacy for treating specific types of cancer.

A recent Wall Street Journal article references Roche’s and Astellas Pharma’s drug Tarceva, which is indicated for pancreatic and lung cancers. In terms of efficacy, the drug extends life more significantly in those with lung cancer (three months) compared to pancreatic cancer (less than two weeks). Following Express Scripts’ model, patients experiencing only a slight boost in overall survival would pay less than those who see longer survival rates. Should all proceed as Express Scripts hopes, the plan would be rolled out sometime next year. In the meantime, the PBM is partnering with experts from leading cancer centers and other organizations and will be evaluating a drug’s worth by looking into indications and outcomes for each drug.

This latest proposal for curbing cancer drug costs was timed perfectly: Right before the American Society of Clinical Oncology (ASCO) conference, which hosted a number of big players in the oncology space presenting results of their most promising candidates. ASCO attendees heard about Bristol-Myers Squibb’s Opdivo + Yervoy combo, Pfizer’s Ibrance + Faslodex combo, and a new collaboration that’s on the horizon for Amgen and Merck to investigate a T-Vec + Keytruda combo in head and neck cancer. Merck’s Keytruda has also demonstrated a positive effect as a monotherapy on head and neck cancer; Roche’s MPDL3280A is making headway in non-small cell lung cancer (NSCLC); and Pfizer, in collaboration with Merck KGaA on Merck’s MSB0010718C (Avelumab), is determining the candidate’s efficacy in multiple cancers. While it will still be some time before we see some of these drugs in the market, they are most likely going to have to be priced similarly to be competitive.

Earlier this year, we were inundated with reports about how BMS and Merck were in the chase for the coveted first-to-market position as a second-line treatment for NSCLC. (BMS eventually took top honors.) As prices go up in the hep C, cancer, and MS spaces, industry competition seems to be reaching a new peak. The overarching goal remains, of course, to get meds to patients. However, a company’s ability to get its drug to patients first and to garner a majority share of the market (with some help from the PBMs) is the best way to measure a company’s success.

However, if Express Scripts should have its way, what would happen to inter-industry competition between the pharma players — specifically in the cancer space? If price tags are altered based off a drug’s performance, it seems to me the industry and its ways of quantifying success and leadership in the market will be faced with change as well — but it’s not entirely clear it will be what Express Scripts had in mind.

For instance, one development that could potentially promote new market leaders and challenge Express Scripts’ intentions was illustrated in a WSJ story about the NCI-Match trial. This trial is being launched by The National Cancer Institute (NCI) and 10 pharmaceutical companies. In this trial, 20 different treatments from top pharma companies will be examined for their efficacy in targeting each tumor’s genetic mutation regardless of the location of the tumor in the body. Endpoints in the trial will be tumor shrinkage and overall survival.

Assigning treatment based on mutation and not tumor location could have an interesting impact on the overall cancer treatment landscape. Genetically characterizing colon, breast, or lung cancer, categorizes each form of cancer into much smaller patient populations, effectively creating a new series of rare orphan diseases. The smaller the patient population for each genetic mutation, the more precise (and probably effective) the treatment becomes. As per the pay-for-performance model (should that become standard practice), companies could find that cancer treatments remain quite lucrative. Good news for pharma companies, but probably not what Express Scripts had in mind.

Express Script’s pay-for-performance proposal certainly made some waves in the past few weeks. Indeed, even CEO Joe Jimenez of Novartis, a leader in the cancer space, has begun arguing that performance-based pricing is in pharma’s future over the next decade. But it seems to me that the timing of the proposal has come at what could be, thanks to the NCI trial, an interesting time for the cancer treatment space. In fact, I’m left questioning whether Express Scripts’ pay-for-performance concept will live up to its purpose of quelling high drug costs or if the treatment landscape will evolve enough to cancel out the hoped-for price decreases.