Putting pricey treatments to the cost-effectiveness test in the U.S.
Name: Steve Miller
Title: Chief Medical Officer, Express Scripts
Call him a judge, a gatekeeper, a cost-fighting ninja. Or call him a burr underneath the saddle of Big Pharma. Whatever you call Steve Miller, chief medical officer at Express Scripts ($ESRI), be sure to keep an eye on him. He is leading the company's charge toward cost-effectiveness assessments--and those decisions could have a significant effect on your bottom line
The signs began several years ago, when pharmacy benefits managers (PBMs) first suggested they might crunch their own data to determine which drugs work for which patients. Medco Health Solutions ($MHS), for instance, figured it could look at Plavix, the blood thinner from Sanofi ($SNY) and Bristol-Myers Squibb ($BMY), to see whether it should be restricted to patients without a particular genetic mutation that can interfere with its metabolism. But the threat really hit home last fall, when Express Scripts excluded 48 drugs from its national formulary.
Sure, CVS Caremark ($CVS) had tested the waters with its own formulary exclusions the year before. Express Scripts' move affected more drugs--including new would-be blockbusters from Big Pharmas counting on them to jump-start growth. That includes GlaxoSmithKline's ($GSK) Breo Ellipta respiratory treatments, which the company hopes will help take the place of Advair, its $7 billion drug beginning to face generic competition--and Advair itself. It includes Novo Nordisk's ($NVO) Victoza, a highly popular GLP-1 treatment for diabetes, and NovoLog, a synthetic insulin; both drugs are cornerstones of its burgeoning sales in the U.S. It also includes Pfizer's ($PFE) Xeljanz, a rheumatoid arthritis treatment the company has pegged for blockbuster status, and Johnson & Johnson's ($JNJ) Simponi, the supposed follow-up to its multibillion-dollar seller Remicade.
Soon after that, Miller further roiled the waters in an interview about the new generation of hepatitis C drugs. He told Bloomberg that the pricey meds, designed to be used in two- to three-drug cocktails, would have to survive a stringent set of cost-benefit analyses to win coverage from his company. The most expensive products might not win a place on its formulary--even if they're more convenient for patients, such as Gilead Sciences' ($GILD) planned two-in-one pill. After the news broke, Gilead, whose brand-new Sovaldi is the first in this new wave of treatments--and costs $84,000 per month--saw its shares plummet by more than 4%.
Several companies have staked big money on this new generation of drugs, including Bristol-Myers Squibb and AbbVie ($ABBV), each of which is developing its own drug cocktails. If one medication in the mix runs $84,000 retail, then how much would the combinations of two, three and even four drugs cost? "When you look at the price of many new products coming to the marketplace, it's just not going to be sustainable," Miller told Bloomberg.
So, Express Scripts is thinking that it will compare treatments head to head, looking at data and costs, and choose those that are most cost-effective. There may be "some really tough formulary decisions," Miller said at the time.
If other PBMs weren't thinking the same thing then, they are now. Express Scripts' peers now are saying they they, too, are casting about for new tactics to control drug spending--and those new tactics could sap the power from some long-standing pharma strategies. They might even take a page from government watchdogs in other countries, like the U.K.'s National Institute for Health and Care Excellence (NICE), and bring in outside experts to weigh the evidence and make the hard choices Miller mentioned.
Miller joined Express Scripts in 2005 as a VP, after stints as CMO at Barnes-Jewish Hospital in St. Louis and on faculty at the University of Colorado Health Science Center in Denver. He's an M.D. with an MBA, with fellowships in pathology and cardiology, a medical degree from University of Missouri-Kansas City and a business degree from the Olin School of Business at Washington University in St. Louis. So, he has the training to look at both sides of that cost-clinical equation.
No question, the analysis won't stop with hepatitis C. As drugmakers zero in on specialty drugs and genetically targeted treatments, prices are going up, but healthcare budgets aren't infinitely elastic. And the U.S. lacks the sort of drug evaluation apparatus in place in the U.K. or Germany. Express Scripts and its competitors intend to take on the task.
"We obviously have a long-term strategy," Miller told Pharmalot in October, after the new national formulary hit the news. "This has sent a loud message to the marketplace that we have got to preserve the benefit for patients and plan sponsors and do things to rein in costs. As there are more products in the marketplace that are interchangeable, we'll do more to seek the best value for our members. This is just the beginning of a multistep process over the next several years."
-- Tracy Staton (email | Twitter)
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