By Jack Rawson, Analyst
Road to commercialization of Vertex’s CF portfolio
The European Commission recently approved Vertex’s combination regimen Symkevi (tezacaftor / ivacaftor; marketed as Symdeko in the US). This is their third disease- modifying Cystic Fibrosis (CF) drug on the market. The first was Kalydeco (ivacaftor) in 2012, which was the first disease-modifying CF drug. Initially indicated for 3% of CF patients, its indications have expanded to include more patients. Annual revenues from this drug leaped from $371.3 million in 2014 to $845 million in 2017.
Vertex’s second CF drug, Orkambi (lumacaftor/ivacaftor), greatly increased the number of patients which could be treated to 40% and brought in $1.32 billion in 2017. This was because Orkambi has lower efficacy, but similar prices were proposed. Outside of the US, health technology assessment (HTA) bodies have lashed back against the prices put forward by Vertex, which were similar to those for Kalydeco.
On the 15th of November, 2018 the CHMP (Committee for Medicinal Products for Human Use) adopted a positive opinion recommending a change in the terms of the marketing authorisation for Orkambi to include 2 new presentations for children aged 2 years and older. This is a change from the previous recommendation for children aged 6 years and older, and the latest development in what has been a rocky negotiation.
EU HTA bodies respond
For example, the French regulator Haute Autorité de Santé concluded Orkambi provides only a minor health benefit compared to symptomatic treatment, benchmarking the drug at around 80% below Vertex’s target price. Most recently, NHS England also lashed back at the cost of the drug. England has the second largest CF patient population in the world, and negotiations with England’s HTA body, the National Institute for Health and Care Excellence (NICE), have lasted two years. This has been met with limited success, even with patient organisation pressure whenever negotiations reached an impasse.
In early November this year, NICE demanded that Vertex provide full details of all formal offers made to NHS England in February. This would potentially clear up claims from Vertex that it offered the NHS the ‘lowest price for its drugs of any country in the world’. Based on the initial NICE analysis, the cost-effectiveness and budget impact had been deemed to not support the high price. The US-based company offered NHS England a deal covering all its CF drugs including those yet to be approved.
Emergence of a portfolio style agreement
This deal has been called a ‘portfolio-based approach’ and is similar to those already agreed to with Vertex in Ireland, Sweden, and mostly recently Denmark. These innovative agreements will provide one price for all future CF treatments, as well as faster access and budget certainties. The deal is a financially-based agreement which includes price caps. For Vertex it provides revenue certainty, so it can reinvest earnings into next generation therapies. These include triple-combination therapies which aim to treat 90% of CF patients.
‘Portfolio agreements’ like those that Vertex has penned are a new approach to a pricing and reimbursement, and a potential new model for rare disease focussed companies. These models are likely to provide better value propositions to payers especially considering the rising healthcare cost of orphan drugs.
Vertex’s portfolio agreement will likely give them an edge in the CF market, especially considering the new triple combination therapies coming out of their pipeline.
Despite the benefits of such a deal, some countries have agreed to less innovative approaches. In Austria a straight reimbursement deal was agreed for, while in Germany favourable policies for orphan drugs allowed a deal to be reached at around a €130,000 price point. Negotiations with the GKV are undergoing.
It is possible that Vertex’s third CF drug, Symkevi, will experience the same problems in Europe as Orkambi. However, it is safer and more efficacious than Orkambi, which came up short in these areas. With rising healthcare costs, it may be prudent for healthcare systems to adopt innovative access agreements that allow for long term cost saving.
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