12:00 AM
 | 
Mar 17, 2014
 |  BioCentury  |  Regulation

Slippery slope

How NICE breaks new ground linking price of Soliris to Alexion's R&D investment

The U.K.'s National Institute for Health and Care Excellence is breaking new ground by seeking to link the price of Soliris eculizumab to Alexion Pharmaceuticals Inc.'s R&D investment in the Orphan drug; the question is whether the biotech will be able to reach a reimbursement deal without crossing that Rubicon.

Presented with an outstanding clinical efficacy data package and without a cost-effectiveness evaluation to poke holes in, NICE appears to be reaching for a new hammer to beat down the price of Soliris, which in itself is not surprising.

Since the beginning of 2012, NICE has recommended the use of 44 drugs on the NHS. Of those recommended, 19 (43%) included an undisclosed discount via a patient access scheme. About half the time, the patient access deals have been hammered out after the agency has determined a drug should not be included because it was not cost effective.

This time, however, NICE is asking the company to demonstrate that the drug's price is justified by the costs to develop and manufacture it.

The questions arose out of a new method NICE is using to evaluate Orphan drugs and other rarely used treatments where the agency's conventional tools are hard to apply.

Soliris is the first drug assessed the new methodology, called the Highly Specialised Technology (HST) process.

On March 5, NICE published draft guidance in which, despite clear clinical efficacy, the evaluators said they were unable to prepare a recommendation on the use of Soliris to treat atypical hemolytic uremic syndrome (aHUS) because "the Evaluation Committee has not yet been presented with an adequate explanation for its considerable cost."

Soliris is already approved and reimbursed for paroxysmal nocturnal hemoglobinuria (PNH).

In the case of aHUS, Soliris costs about £340,200 ($568,678) per patient for the first year of treatment. A maintenance dose is estimated to cost £327,600 ($547,616) per year.

Patients would be expected to receive Soliris chronically, potentially for the rest of their lives, although this is typically shortened as most aHUS patients experience kidney impairment that leads to end-stage renal disease. By Alexion's analysis, Soliris adds 25.2 additional quality-adjusted life years, while NICE reviewers estimate a lower though still major increase of 10.1 QALYs.

NICE's appraisal committee concluded the company had not provided justification for its price "in light of the manufacturing, research and development costs" for a rare disease drug.

It went on to ask Alexion to explain the relationship between its development costs and the price the company is proposing for NHS.

Industry representatives told BioCentury that NICE's request implies the agency is prepared to link the reimbursement decision to development costs, which runs counter to the rationale for pricing in all Western market economies: that price is a reflection of value to the end user (see "Don't Go There," A7).

In an email to BioCentury, NICE denied it will take the questions to their logical end of implementing a cost-plus reimbursement model.

Alexion now has three options. One is to provide the information to NICE and risk setting a precedent that links reimbursement to development costs.

The other two already have been applied by other drug companies: refuse to submit the information to NICE and risk the drug not being reimbursed for aHUS patients; or pursue a patient access scheme that would provide the drug to the NHS at a discount.

Industry representatives, including an executive at an Orphan drug company, as well as an Alexion investor, told BioCentury they did not want to see the precedent-setting outcome.

They all argued a patient access scheme was Alexion's best course of action.

Alexion is playing its cards close to its chest, but Jon Beauchamp, business unit leader at Alexion's U.K. subsidiary, said the company understands what is at stake.

"For patients and industry, this is precedent setting," Beauchamp told BioCentury. "We clearly appreciate that."

Alexion may be hoping negotiations with NICE come to a conclusion similar to that for reimbursement of Soliris in France. On March 10, the company raised its 2014 financial guidance by as much as $170 million after it and the French government agreed on reimbursement of the drug for both aHUS and PNH.

Alexion has not disclosed details of the deal or the list price of Soliris in France.

Comments on NICE's draft guidance on Soliris are due March 25, with the second appraisal committee meeting scheduled for April 22.

Some time this year - after the Soliris evaluation - NICE expects to consult with stakeholders about the development of a...

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