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Express Scripts targets Amgen, Lilly migraine drugs in price development

LOS ANGELES (Reuters) – The largest US prescription manager tells drug manufacturers that the current pricing model is broken and Amgen Inc., Eli Lilly and Co. and other migraine drug manufacturers are trying to fix it.

FILE PHOTO: An Amgen Sign is seen at the company's office in South San Francisco, California, USA, October 21
, 2013. REUTERS / Robert Galbraith / File Photo

Express Scripts told Reuters that it is pushing for the usual strategy of setting a high US list price and then lowering the cost of health plans through hefty discounts. A refund will also be requested if the medications do not work within a specific timeframe. The shift could help Express Scripts and other Pharmacy Benefits Managers (PBMs) lower prices and deflect the growing criticism of their role as "middlemen" in the drug supply chain.

The Trump administration and members of Congress have demanded that PBMs pass on more of the discounts they receive to consumers, who are outraged by rising costs at the pharmacy counter. Many Americans now have health plans with higher co-payments or co-payments, blaming them for more of their medical expenses.

Express Scripts recommends pharmaceutical companies to take this shift into account when launching a new class of migraine drugs.

"If you do not expect to get this high list price, then do not do that for patients who have high co-pay," Chief Medical Officer Steve Miller said in an interview, describing his message to Amgen and his rivals. "Let's be more balanced, let's get back to where gross-to-net is not so different." Amgens Aimovig is expected to approve next month, followed by similar drugs from Teva Pharmaceutical Industries Ltd and Lilly, which companies say that they could benefit up to 4 million people United States.

Lilly has been urging PBMs "for years" to develop contracts that consider drug efficacy, said chief executive David Ricks as analysts in a telephone conference asked about the Reuters story to discuss quarterly results.

Ricks said he was glad that Express Scripts "is now changing their point of view and supporting this type of construct, and we will be happy to work with them."

The new injected therapies interfere with the function of a molecule which is involved in the processes that trigger a migraine, such as the expansion of blood vessels in the brain.

Wall Street analysts expect Amgen to announce a list price of up to $ 10,000 a year for Aimovig.

But Express scripts and other PBMs limit access to new drugs that they find too expensive, and require physicians to provide detailed evidence of why a particular patient can benefit from using other medications for a particular medication Period or cheaper rivals prefer.

Drug manufacturers may have similar problems with the new migraine treatments, Miller said: "If they over-estimate these things, they probably will not be able to gain much market share."

Express Scripts also urges Amgen and his colleagues to reimburse two thirds of the cost of a migraine drug if a patient stops treatment within 90 days because he has not worked or has caused major side effects.

Such guarantees are becoming more common for older drugs with competing products on the market, including diabetes and hepatitis C therapies. It would be unusual to introduce them for the first drug in a completely new therapeutic trial. Amgen, which will market Aimovig in partnership with Novartis, declined to comment on conversations with Express Scripts. Research chief Sean Harper said in an interview recently that the payer shares the blame for the current pricing model.

Their demands for ever larger discounts have forced manufacturers to use higher list prices as a benchmark, he said.

"It's a ridiculous situation we're in," Harper said. "Nobody pays the list price, but the patients are exposed for a period of time" until they pay off their deductible.

Amgen's shares, which will report quarterly results Tuesday afternoon, fell 1 percent in midday trading. Lilly went back by 0.5 percent.


Rising health care costs in the US, the most expensive in the world, burden households, families and employers. This has created a new kind of cost control pressure in the industry.

To this end, Express Scripts has agreed to a buyout from Cigna Corp. health insurance company, while PBM's rival CVS Health Corp. plans to buy Aetna Inc.

In interviews with Reuters, the smaller PBM Abarca Health and the health insurer Highmark Health said that They used a similar tactic as Express Scripts when negotiating coverage of migraine medications. CVS declined to comment.

Teva said it rates the price environment for its migraine medicines. Amgen is at stake because of the difficulties it has faced in recent years in generating revenue.

The biotech company's last potential blockbuster, the high-priced cholesterol treatment Repatha, was challenged by PBMs that questioned its value compared to generic statins that cost $ 100 a year.

Repatha and rival Praluent, which were sold by Sanofi and Regeneron Pharmaceuticals, launched at list prices of nearly $ 14,000 a year in 2015, with billions expected. However, Express Scripts and other payers have rejected most of the prescriptions written for the new drugs while waiting for the evidence to lower the risk of death.

As a result, Repatha's revenue last year was $ 319 million, while Praluent's revenue was $ 195 million.

"If Amgen and Sanofi had to do it again, they would have cost half the list price and earned a lot more money," said Jason Borschow, CEO of Abarca in Miami.

Aimovig is far more effective in the prevention of migraines than current treatments, especially low-cost generic drugs. Recent studies have shown that Aimovig reduces episodic migraine by at least half in about 50 percent of patients.

It is expected that the Food and Drug Administration will decide on Aimovig on May 17. The Authority's decision to treat fremanezumab by Teva was expected in June, which could be delayed due to manufacturing issues. A decision on Lilly's Galcanezumab is expected later this year.

Editing by Michele Gershberg and Edward Tobin

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