After Gilead-AbbVie's Hep C Price War, Express Scripts Inc. Eyes Cancer Meds Next

January 23, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Massive benefits provider Express Scripts Inc. will take on the pricing of cancer drugs as soon as it can, its chief medical officer told Bloomberg this week, after the company’s earlier decision to go with an exclusive and cheaper provider of hepatitis C drugs, AbbVie , sent that company into a bidding war with close competitor Gilead Sciences, Inc. .

“We want to be able to start influencing the [cancer] market by 2016,” CMO Steve Miller told Bloomberg. “We are accumulating all the keys to the puzzle to be able to do this.”

But although Express Scripts has a massive reach across many programs, including some of the world’s largest prison systems, it usually does not control payments for injected or infused cancer drugs that doctors administer to patients.

But Miller told Bloomberg the company is hoping to change that model by targeting more immunotherapy drugs, which are patient administered and can sometimes cost upward of $150,000. Many of those blockbusters are produced by two specific companies, Merck & Co. and Bristol-Myers Squibb Company , which declined to comment Thursday.

St. Louis-based Express Scripts started the price war between dueling hepatitis C drugs in October when it said it would change its standard formula to a new, cheaper AbbVie instead of choosing Gilead Science’s pricey Harvoni or Sovaldi treatments. But Miller said Thursday that taking on cancer treatment will be a more difficult process, but one it will attempt to navigate nevertheless.

“We are going to have to walk gingerly, but make no mistake we are on that walk,” he said.

Bloomberg cited data from the Memorial Sloan Kettering Cancer Center showing that around half of the 30 cancer drugs introduced in the last five years have price tags of at least $10,000. But of the 44 cancer drugs rolled out a decade prior, only four out of 44 cost more than $5,000 monthly.

Miller’s comment don’t come without precedent. Express Scripts Chief Executive George Paz told the audience of a panel at the J.P. Morgan Healthcare conference in San Francisco last week that what worked for bringing down prices for liver disease might also work to rein in the cost of cancer drugs.

"The big opportunity out there is really in cancer," Paz said. "If we can get out in front of that, that is a huge opportunity."

Paz also took aim at companies that charge sky-high rates for drugs that are essentially a cure, such as Gilead Science’s hepatitis drugs Harvoni and Sovaldi. Express Scripts has pointed out that many public health programs like Medicaid and state prison systems currently foot the bill for the $94,500 price tag of Sovaldi, which has a cure rate of around 90 percent.

"Everyone's got to make money, but how much?" said Paz.

Paz also said he was looking closely at new cholesterol drugs that target protein PCSK9, which competitors Regeneron Pharmaceuticals, Inc. and Amgen are already rolling out.

"They are pretty astonishing, but they are also very expensive," Paz said, adding Express Scripts would likely wait to make a decision so that they didn’t get caught in the trap of "me too" drugs, or paying for things that are fashionable but not cost-effective.

Miller has not been shy in the past about speaking about specific drugs and their cost-prohibitive status for the company.

"The cost of [Sovaldi] is unsustainable for many of our plans," Miller, has said of Sovaldi and Harvoni, which sometimes have multiple stages of treatment, and cost $94,500 and $84,000 per course—or around $1,000 per pill.

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BioSpace Temperature Poll
What Are Your Predictions for the Price Bidding War? The market has been buzzing about an escalating price war between large payers like Express Scripts and Big Pharma. Multiple deals last week showed Gilead forming exclusive pacts and smaller companies like Kite Pharma starting talks early. What do you think will be the effect on prices? BioSpace wants your opinion!