Blog June 4, 2018

Vertex Under Fire

KalydecoThe Institute for Clinical & Economic Review (ICER) recently ruled that all three of Vertex’s cystic fibrosis (CF) drugs are considerably overpriced. ICER analyzed the prices for Kalydeco, Orkambi, and new treatment Symdeko based on a metric called “quality-adjusted life year,” which factors in both the quantity and the quality of life lived. While ICER acknowledged the significant health benefit of each drug, the analysis concluded that Vertex would need to lower the prices on its medications by 71- 77% in order to align costs with benefits.


ICER is an independent watchdog, supported by non-profit sources of funding, that aims to objectively evaluate the clinical and economic value of prescription drugs, medical tests, and other health care and health care delivery innovations. ICER analysts calculate how well a new drug works, the economic value that the treatment represents, and other measures of value that are important to patients and their families. ICER determinations, while non-binding, can influence drug use and reimbursement decisions as well as actions related to government agency policies at the state and federal level.


In response to the ICER determination, Vertex called the institution’s analysis a sham, saying that the watchdog relied on flawed scientific methodology and employed a constantly shifting analytical process to come to “a pre-ordained outcome.” Vertex also accused ICER of attempting to restrict the current broad access to CF medicines that are the first to treat the underlying cause of the disease and which “fundamentally change the course of disease progression” — an action that Vertex called “particularly egregious.” Several CF patient groups have also joined Vertex in expressing big concerns about the report, complaining that their views were not sufficiently included in the ICER process and criticizing ICER for being overly focused on cost-saving.


Vertex is far from the only company that has taken issue with ICER over one of its determinations. Amgen and Regeneron, for example, complained loudly regarding ICER’s analysis of their PCSK9 drugs, although Regeneron ultimately decreased the price of Praluent towards ICER recommended pricing in a deal with ExpressScripts.


But Vertex has a virtual monopoly on treatments for CF and so little incentive to budge on its pricing stance in the United States or elsewhere. Indeed, the company has been battling multiple European countries over the pricing of its CF medications in the face of threats to deny coverage. In France, Vertex announced it would cancel planned clinical trials for testing drug combinations after the French Health Ministry sought an 80% discount on Vertex’s most recent offer for Orkambi. In the United Kingdom, Vertex and the UK Health Minister have fought for two years in an attempt to resolve the pricing issue, as the UK National Health Service is refusing to provide coverage for the drugs unless Vertex lowers its price. Vertex also fought the Irish government for over a year before a pricing agreement was reached. Moreover, in fall 2017, the Dutch Health Minister suggested that the country would explore compulsory licensing in order to obtain Orkambi at a lower cost. A deal was ultimately reached with Vertex; compulsory licensing would have enabled the Netherlands to grant a license for Orkambi to a generic drug maker, allowing it to copy the patented medicine without Vertex’s consent.


Will Vertex ultimately have to bow to pressure from ICER and governmental policy makers to lower the price for its drugs? Will Medicare and other payers use the ICER analysis as leverage to force a change? Or will current pricing levels persist until new CF drugs enter the market to provide competition for Vertex and its products?