BUDGET-BUSTERS: The shift to high-priced innovator

Transcription

BUDGET-BUSTERS:
The shift to high-priced
innovator drugs in the USA
Welcome
September 2014
EvaluatePharma®’s USA Sales,
Volume and Pricing Intelligence
A clear picture of drug pricing in key markets, trends and competitor pricing is essential to our
clients in the Pharma and Biotech sector. We have heard from many of our clients that too much
of their time is currently spent on data collation and not enough time on market analysis and
strategic decision-making. They require an efficient way to analyse what is driving USA sales.
At Evaluate, our aim is to bring transparency to pricing and we focused our efforts initially
on the largest and most influential market, the USA. Our team of experienced analysts started
the development of an integrated, single source for USA sales, volume and pricing information.
We defined a methodology to provide insights into the annual cost per patient for the top selling
drugs as well as number of patients treated. The analysis combines USA government data sources
and is fully transparent as to the specific sources and the methodology of our calculations.
A comprehensive methodology document is available to all Evaluate’s subscribers.
The clients we collaborated with to develop the pricing insights told us that they
particularly valued:
A more efficient way to conduct pricing analysis
Transparency as to sources used to triangulate the analysis
Ability to calculate annual cost and volume per patient
Credible insights into competitor’s sales dynamics
Insights with regard to rebates and discounts
Retail level drug prices
Key features of this new intelligence include:
A single, trusted source for USA Sales, Volume and Pricing intelligence
Comprehensive prescription drug pricing in the USA
- Includes primary care medications, injectable biotechnology products and vaccines
- Sources: Retail Rx unit / pack prices (Medicaid), J-Code, NADAC, Federal Contract
E xclusive cost per patient and number of patients treated calculations for top-selling USA Drugs including
Orphan Drugs
Transparency to Off-invoice Discounts (Payer / Wholesale rebates)
Complete commercial context through EvaluatePharma® content integration
Copyright © 2014 Evaluate Ltd. All rights reserved.
Commentary and analysis from the EP Vantage editorial team
To find out more about USA Sales, Volume and Pricing, future pricing developments and Evaluate’s
full range of services contact us:
North America:
Debbie Paul
Tel: +1 617 573 9453
Email: [email protected]
Japan:
Hiroshi Yamazaki
Tel: + 81 (0) 80 1164 4754
R
est of the World:
Will Hau
Tel: +44 (0)20 7377 0800
F or general questions:
Christine Lindgren
Tel: +1 617 866 3906
Disclaimer
All intellectual property rights in this report remain that of Evaluate Ltd and/or its respective third party licensors. Whilst all reasonable
steps have been taken to ensure that the data presented are accurate, Evaluate Ltd cannot accept responsibility for errors or omissions.
Neither does Evaluate Ltd warrant the accuracy, merchantability or fitness for a particular purpose of the data. Nothing in the reports shall
constitute investment, financial or legal advice and the contents of the reports are provided for information purposes only. The data is not
intended to amount to advice and should not be used as a determining factor in any investment decision. This report may not be lent,
resold, hired out or otherwise disposed of by way of trade in any form of binding or cover other than that in which it is published, without
the prior written consent of Evaluate Ltd. Copyright © 2014 Evaluate Ltd. All rights reserved.
2
September 2014
EvaluatePharma® Foreword:
Move to Higher Priced Drugs Within the Top 100 Selling Drugs in the USA
Over the last five years a fundamental shift in spending trends towards high-priced medicines,
which treat substantially smaller patient populations, has been underway in the US market.
Based on an analysis of the Top 100 selling drugs in the USA we have found that:
T he median revenue per patient of the Top 100 drugs has increased from $1,260 in 2010
to $9,400 in 2014, representing an seven-fold increase (see page: 7).
T he median patient population size served by a Top 100 drug in 2014 is 146,000, down from
690,000 in 2010.
T here are now seven treatments priced in excess of $100,000 per patient per year in 2014,
versus four in 2010.
(In this report the Top 100 drugs are based on net manufacturing sales disclosed by companies and we define a drug selling
for greater than the median price (>$10,000) of the Top 100 as high-priced.)
Why the Shift?
The changes in spending are complex, but we have identified a number of factors that could have
contributed to the increase in launch prices and drug price inflation, including:
Successful R&D innovation
Drug pricing models that impact launch price
Advancing patient outcome
Removing costs from healthcare
Improving patient economic productivity
Private and public ability to pay
An example of these factors in action is Sovaldi, the first of the so called ‘budget-busting’ drugs. The
hepatitis C treatment’s $84,000 list price has been defended because it offers a step-change advance in
patient outcomes, removes costs from healthcare and improves patient economic productivity.
The US system of free market pricing also allows a correlation between higher drug prices and new
treatments which offer real innovation over current treatments. Thus, Sovaldi was able to charge more
than Incivek (Vertex) and Victrelis (Merck), the first advancements in hepatitis C treatment, whose
commercial edge lasted for only two and a half years.
The report also considers other factors that might be influencing drug pricing and changes in patient
population size, these are explored below.
Shift in Focus - Tax and Regulatory System Biased Towards Orphan Drug/Smaller Patient
Population Drugs
Over the past 15 years FDA requirements for the approval of new drugs have become more
stringent, particularly for primary care products. This has pushed up primary care clinical trial sizes
and R&D costs. In addition, the unintended extended patent life/softer patent erosion available to
biologicals and the tax advantages of the Orphan Drug Act have skewed the R&D incentives
towards investment in non-primary care diseases with smaller patient population sizes. Our report
shows that this has increased the number of new product launches of higher-price/small-population
drugs.
In 2010 the number of Top 100 drugs treating 1-100,000 patients was 23. In 2014 the number
had jumped to 41.
C
orrespondingly, the number of Top 100 drugs treating 500,000 plus patients had fallen
from 55 to 35.
3
Foreword
While some of the decline in top selling drugs treating large patient populations may have been due
to products such as Lipitor, Plavix and Actos losing patent protection, their places have been taken
by biologic drugs, which can command much higher median pricing and have so far enjoyed little or
no generic competition (see page 9).
The current lack of biosimilars means that successful biologicals have not only entered the Top 100,
but have not dropped out of it, despite some experiencing patent expiry, e.g. Epogen, originally
launched in 1989, has yet to experience biosimilar competition.
Drug Price Inflation and Monopoly Pricing
The report also shows that companies have aimed to maximise revenues, not only for new products but
for existing ones. We found that 19 drugs in the Top 100 have moved up a price bracket in the last four
years (see page: 7). E.g., nine products have gone from costing less than a $1,000 in 2010 to being priced
in the $1,000 to $5,000 bracket in 2014.
The US phenomenon of drug price inflation - where prices increase after initial launch - is in direct
opposition to Japan where the government reimbursement system reduces the price of successful products
which beat initial sales expectations at launch. US drug price inflation could be due to a number of factors:
L ack of Competition - The biggest brake to the price inflation of a first-to-market drug is the entry of
“me-too” or marginally differentiated products to treat the same disease providing additional competition. In
reviewing the Top 100 selling drugs in 2014 the cohort is biased to successful products, so it is not surprising
certain products move up a price bracket. Even when a “me-too” drug enters the market, the list price of the
first-to-market drug tends not to drop but off-invoice discounts start to occur to private payers.
D
rug Profile – Over the life of a product, a better understanding of the drug’s benefits versus the competition
tends to emerge, which could justify price increases.
P
atient Switching - Companies increasing the price of mature products, knowing that physicians will be
reluctant to switch to less expensive alternatives, when patients are responding well to the drug.
Budget-Busters Versus High-Priced Imitators
We define a budget-busting drug as a drug that offers a step-change in patient outcome and/or
removes costs from other parts of the health system, normally in a non-rare disease population size
(>200,000 patients in USA). Budget-busters lead to payers having to revisit budget size and
allocations to pay for innovative products.
However, it’s important to be aware of high-priced drugs which do not offer a step-change in patient
outcomes, and therefore do not justify a high-price. Zaltrap, initially priced highly was judged by the
Memorial Sloan Kettering Cancer Center to offer little cost/ benefit over Avastin, the current colorectal
cancer treatment. Sanofi responded by halving the US price.
The report also shows that a number of drugs such as Roche’s cancer products, Herceptin and Rituxan,
were able to command prices well in excess of the other top 20 biggest selling cancer products in 2014
despite competing products on the market.
Celgene’s Revlimid had the highest price premium within the Top 20 selling cancer drugs, achieving
$164,859 per patient and treating an estimated 17,380 patients in 2014 (see page 13).
However, with an increasing number of potential “budget-busters” on the horizon, these prices might
not be sustainable as payers could start to get even tougher on new and currently marketed products
that are poorly differentiated.
4
Foreword
Future of High Drug Pricing in Top 100
T he shift to high-priced medicines will increase friction between payers and companies. However, as long
as the economic basis of the high price is sound (namely improved patient outcomes, reduced healthcare costs,
or improved patient economic activity versus current treatments) budget-busters will - for now - get a slice of
the USA market. The losers will be poorly-differentiated products which get dropped from reimbursement
lists. This is how the market should operate and will actively encourage R&D spend to be allocated to
innovative products.
T he biggest concern is that with government drug spend approaching 43% of the USA market by 2017, up
from 24% in 2005, the system lacks enough automatic discounts off the private price, and safeguards against
drug price rises from companies, to be sustainable. This is particularly an issue for Medicare Part B and Part D
programs. The expansion of Medicare (2005+) and Medicaid (2014+) enrolment has incrementally expanded
the USA drug market, so any discounts off private drug prices will act only to moderate growth. Thus the call
for reform will grow stronger.
T he adoption of biosimilars appears crucial to moderate overall pharmaceutical sales growth in both the private
and public sector, but also to free up funds to pay for the innovation of tomorrow.
L aunch prices are likely to be determined more and more by competitive profile of the product rather than R&D
spend. Gilead paid $11.2 billion for Pharmasset because of the future commercial profile of Sovaldi at the time
of acquisition, not because Pharmasset had spent $272 million on R&D to get the compound into late-stage
phase III.
Conclusion
There appears to be little let up on the budgets of both government and private payers in the USA
seeking access to innovative drugs.
With the Affordable Care Act (ACA) set to add nine million additional Americans in 2014 to Medicaid
budgets and the increasing numbers of Medicare enrolments due to the aging baby-boomer generation,
the US government is already forecasting Medicare/Medicaid spend to account for 43% of the entire
USA prescription drug market by 2017, up from 24% in 2005.
The government has also raised its forecast for both Medicaid and Medicare prescription drug spend
by $10bn to $210.7bn in August 2014, with Sovaldi alone adding over $1bn to the Medicaid drug bill
in 2014. While efforts have been made to reduce Medicaid spend on generic drugs (see page 16) the
current system looks to be unsustainable.
To rein in costs or justify the prices private payers are expected to pay for innovation, private payers
could organise to conduct drug cost/benefit analyses to call out the effectiveness of high-priced drugs.
And while the 2003 Medicare Act explicitly stops Medicare from negotiating drug prices, a prohibition
that failed to get overturned in the Senate in 2007, the government-run health plan for seniors could
put pressure on its health plan providers to negotiate more aggressively.
As such the increasing rumblings of discontent from both government and private payers mean that
pharma companies need to be providing real innovation to justify the prices of their products and
closely work with the hand that feeds their growth.
Anthony Raeside
Head of Research, Evaluate Ltd
5
Table of Contents
Top 100 USA Drugs: Revenue per Patient per Year Analysis 2010 & 2014
8
Top 100 USA Drugs: Number of Patients Treated Analysis 2010 & 2014
9
Top 100 USA Drugs in 2014: Revenue per Patient vs. No. of Patients Treated
10
Top 100 USA Drugs: Revenue per Patient vs. No. of Patients (<100k)
11
Top 100 USA Drugs: Revenue per Patient vs. No. of Patients (100 to 500k)
12
Top 100 USA Drugs: Revenue per Patient vs. No. of Patients (>500k)
13
Top 20 Cancer Drugs in 2014: Revenue per Patient vs. No. of Patients Treated
14
USA Primary Care (MEPS): Proprietary (NDA) vs. Generic (ANDA) 2005-12
15
Top 100 USA Generic Drugs (MEPS): Retail Sales per Patient 2012
16
Medicaid Generic Drugs: Generic Prescription Price Trend 2008 to 2014
7
6
Top 100 USA Drugs: Revenue per Patient per Year Analysis 2010 & 2014
Median Annual Drug Revenue of Top 100 Drugs Balloons to $9,396 in 2014, from $1,258 in 2010
Seven Drugs in Top 100 Cost more than $100,000 per Year
EvaluatePharma® finds that the median revenue per patient per year (annual drug cost net of discounts and adjusted for patient
compliance) within the top 100 selling products, has increased from $1,258 in 2010 to $9,396 in 2014. The shift to higher cost drugs
reflects industry product launches of innovative drugs aimed at smaller patient population sizes (see page 8), high priced biologicals not
being impacted by patent competition, but also drug companies increasing prices to maximise revenues. Further analysis reveals that 19
drugs, in both the 2010 & 2014 Top 100 lists, moved up a pricing band. There are now seven drugs in the Top 100 in 2014 which cost in
excess of $100,000, up from four drugs in 2010. In 2010, drugs selling for less than $1,000 was the largest component of the Top 100 at
40 (40% of the Top 100); in 2014, that number fell to 19 (19%).
Count of Products within Top 100
Count of Drugs in USA Top 100 by Revenue per Patient per Year Price Band in 2014
Source: EvaluatePharma® (22 SEP 2014)
40
35
30
25
20
2014: Revenue per Patient $100k +
Advate
$449k
Soliris
$427k
Gamunex
$172k
Revlimid
$165k
Erbitux
$140k
Yervoy
$126k
Afinitor
$107k
15
4
2014
27
24
19
17
12
10
5
2010
40
11
9
7
10
7
10
3
0
$100,000+
$50,000 $100,000
$25,000 $50,000
$10,000 $25,000
$5,000 - $10,000 $1,000 - $5,000
$0 - $1,000
Revenue per Patient per year Banding ($)
Count of Drugs in USA Top 100 (2010 & 2014) by Revenue per Patient per Year Price Band
Revenue Banding
$100,000+
$50,000 - $100,000
$25,000 - $50,000
$10,000 - $25,000
$5,000 - $10,000
$1,000 - $5,000
$0 - $1,000
2010
4
3
9
10
7
27
40
100
26
74
$10,000+
$0 - $10,000
2014
7
12
11
17
10
24
19
100
47
53
USA Top 100
2010
2014
Median Revenue $1,258
$9,396
Average Top 100 $1,433 $1,524
Total USA Sales ($m) 143,340 152,440
Chg.
+3
+9
+2
+7
+3
-3
-21
2010
4%
3%
9%
10%
7%
27%
40%
100%
26%
74%
CAGR (2010-14)
+65.3%
+1.6%
+1.6%
2010: USA Top 100 Drugs by Cost Bands
$100,000+
4%
2014
7%
12%
11%
17%
10%
24%
19%
100%
47%
53%
2014: USA Top 100 Drugs by Cost Bands
$50,000 $100,000
3%
$25,000 $50,000
9%
$0 - $1,000
19%
$100,000+
7%
$10,000 $25,000
10%
$0 - $1,000
40%
$1,000 $5,000
27%
$5,000 $10,000
7%
$1,000 $5,000
24%
$50,000 $100,000
12%
$25,000 $50,000
11%
$10,000 $25,000
17%
$5,000 $10,000
10%
7
Top 100 USA Drugs: Number of Patients Treated Analysis 2010 & 2014
Count of Products Within Top 100
USA Top 100 Drugs Shifts to Higher Price, Smaller Patient Groups
EvaluatePharma® finds that the median number of USA patients treated by a Top 100 product, has fallen from 689,604 to 146,252 per
drug. The number of drugs within the Top 100 that treat fewer than 100,000 patients annually has increased from 23 (23% of the Top
100) in 2010, to 41 (41%) drugs in 2014. The number of drugs serving groups of over 500,000 patients has decreased from 55 (55%) to
35 (35%) in 2014.
A number of factors have contributed to this shift to higher-priced, lower patient-population groups: the innovation potential of primary
care has somewhat matured; and, companies have switched strategic focus and are increasingly innovating in biologicals, orphan
diseases, cancer, and specialist markets. In addition the absence of patent competition on biologicals means established biologicals do
not drop off the list.
60
Count of Drugs in USA Top 100 by No. of Patients Treated per Year Bands in 2014
55
2010
50
2014
41
40
35
30
22
24
23
20
10
0
500,000+
100,000 to 500,000
0 to 100,000
No. of Patients Treated per Year Bands
Count of Drugs in USA Top 100 (2010 & 2014) by Number of Patients Treated per Year Bands
No. of Patients Treated
500,000+
100,000 to 500,000
0 to 100,000
2010
55
22
23
100
2014
35
24
41
100
USA Top 100
2010
2014
Median No. of Patients Treated 689,604
146,252
Average Top 100 1,733,705
1,266,910
Total No. Treated by Top 100 173,370,517 126,691,003
Chg.
-20
+2
+18
100,000 to
500,000
22%
500,000+
55%
2014
35%
24%
41%
100%
CAGR (2010-14)
-32.1%
-7.5%
-7.5%
2010: USA Top 100 Drugs by No. of Patients Treated Bands
0 to
100,000
23%
2010
55%
22%
23%
100%
2014: USA Top 100 Drugs by No. of Patients Treated
0 to
100,000
41%
500,000+
35%
100,000 to
500,000
24%
Note: Top 100 drugs ranked by EvaluatePharma® consensus USA sales in 2014. Excludes: Generics, OTC, Botox.
8
Top 100 USA Drugs in 2014: Revenue per Patient vs. No. of Patients Treated
USA Top 100 Drug Cost (Revenue per Patient) is Strongly Correlated to Patient Size
EvaluatePharma® finds the annual revenues per patient of a Top 100 USA drug is strongly correlated (R2 = 0.92) to the number of
patients it treats. This surprisingly strong correlation is likely due to the fact that only a subset of patients taking primary care drugs
require hospitalization and, in general, such drugs do not offer the same improvement in patient outcomes than drugs used to treat
smaller patient population groups. Gilead's Sovaldi is an outlier, with a list price of $84k an estimated revenue per patient of $56k in
2014. The predicted revenue per patient based on the regression is $8,726 for a product treating 135,182 patients. The innovation
Sovaldi offers over current treatments (patient outcomes, costs out of healthcare, patients improved economic activity) reflects this
price premium. We have analyzed three patient population subgroups over the next three pages.
Top 100 USA Drugs by Sales: Revenue per Patient per Year vs. No. of Patients Treated
USA Revenue per Patient ($)
450,000
Number of Patients Treated Subgroups Analyzed:
400,000
USA Patients Treated: <100,000 Analysed:
USA Patients Treated: 100,000 to 500,000:
USA Patients Treated: >500,000
350,000
300,000
Page 10
Page 11
Page 12
Methodology: We chose to test the correlation of
revenues per patient and the number of patients treated
in 2014. The Top 100 drugs in USA, by definition, are
relatively successful so the expected commercial drug
profile has broadly been met. There are many factors other
than target patient population size influencing price.
250,000
200,000
150,000
Sovaldi (GILD)
100,000
y = 580,773,061.274791x-0.940023
R² = 0.919463
50,000
0
0
500,000
1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000
USA Number of Patients Treated
Note: To enhance the chart visual the x-axis has been limited to 5 million patients (Fluzone is not visible: 44m patients)
Fluzone is included in the trendline and R2 calculation.
Top 10 USA Drugs by Sales 2014: Revenue per Patient per Year vs. No. of Patients Treated
Product
1
2
3
4
5
6
7
8
9
10
Company
USA Sales ($m)
2014
Sovaldi
Gilead Sciences
Humira
AbbVie
Lantus
Sanofi
Enbrel
Amgen
Remicade
Johnson & Johnson
Abilify
Otsuka Holdings
Rituxan
Roche
Neulasta
Amgen
Seretide/Advair GlaxoSmithKline
Avastin
Roche
Average Top 10
Average Top 100
Median Price
No. of
Patients
Revenue
Per Patient
Patient
Off-Invoice
Compliance Discount USA Cost Band
-31%
10,098
135,182
56,212
6,078
245,693
24,561
74%
5,759
4,905,321
1,190
51%
4,311
223,884
19,585
63%
4,154
277,633
14,716
65%
3,886
394,344
9,180
28%
3,707
70,347
52,459
3,523
277,894
12,679
94%
3,325
1,850,662
1,938
56%
2,928
44,552
66,828
4,777
842,551
25,935
1,524
1,266,910
31,740
979
146,252
9,396
$50,000 - $100,000
$10,000 - $25,000
-34%
$1,000 - $5,000
$10,000 - $25,000
$10,000 - $25,000
-27%
$5,000 - $10,000
$50,000 - $100,000
$10,000 - $25,000
-6%
$1,000 - $5,000
$50,000 - $100,000
Top 10 USA Drugs by Sales 2010: Revenue per Patient per Year vs. No. of Patients Treated
USA Sales ($m)
2010
Bristol-Myers Squibb
1 Plavix
6,154
Pfizer
2 Lipitor
5,329
3 Seretide/Advair GlaxoSmithKline
4,026
Otsuka Holdings
4 Abilify
3,606
Takeda
5 Actos
3,582
Amgen
6 Enbrel
3,304
Merck & Co
7 Singulair
3,219
AstraZeneca
8 Seroquel
3,107
Johnson & Johnson
9 Remicade
3,099
Roche
10 Avastin
3,068
Average Top 10
3,849
Average Top 100
1,433
Median Price
975
Product
Company
No. of
Patients
Revenue
Per Patient
Patient
Off-Invoice
5,110,004
1,204
66%
4,870,912
1,094
84%
-36%
$1,000 - $5,000
3,570,316
1,128
56%
-29%
$1,000 - $5,000
647,918
5,566
28%
-20%
$5,000 - $10,000
1,901,531
1,884
76%
-7%
$1,000 - $5,000
$1,000 - $5,000
209,777
15,750
71%
3,603,517
893
84%
-32%
1,651,254
1,882
35%
-24%
282,743
10,960
66%
45,273
67,764
2,189,324
10,813
1,733,705
16,013
689,604
1,258
$10,000 - $25,000
$0 - $1,000
$1,000 - $5,000
$10,000 - $25,000
$50,000 - $100,000
9
Top 100 USA Drugs: Revenue per Patient vs. No. of Patients (<100k)
Revlimid, Avastin & Rituxan Priced at a Premium
EvaluatePharma® finds that Revlimid (Celgene), Avastin and Rituxan (Roche) are priced at a premium versus other products used to treat
fewer than 100,000 patients in the USA. EvaluatePharma® finds that annual revenue per patient of a Top 100 drug treating less than
100,000 patients is moderately correlated to the number of patients treated (R2 = 0.75).
Top 100 USA Drugs 2014: Revenue per Patient per Year vs. No. of Patients Treated (<100k)
500,000
Price Premium vs. Peers
Advate (BAX)
450,000
400,000
Soliris (ALXN)
350,000
300,000
250,000
Revlimid (CELG)
200,000
150,000
Rituxan (Roche)
Avastin (Roche)
100,000
y = 171,870,708.729157x-0.823195
R² = 0.751557
50,000
0
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Top 10 USA Drugs by Sales 2014: USA Revenue per Patient per Year vs. No. of Patients Treated (<100k)
1
2
3
4
5
6
7
8
9
10
Product
Company
Rituxan
Avastin
Revlimid
Copaxone
Herceptin
Gleevec
Tecfidera
Olysio
Lucentis
Avonex
Roche
Roche
Celgene
Teva
Roche
Novartis
Biogen Idec
Johnson & Johnson
Roche
Biogen Idec
USA Sales ($m)
2014
No. of
Patients
Revenue
Per Patient
Patient
Off-Invoice
3,707
70,347
52,459
$50,000 - $100,000
2,928
44,552
66,828
$50,000 - $100,000
2,107
17,380
164,859
2,700
52,217
43,877
2,060
28,587
71,513
2,023
64,884
31,006
1,968
54,735
34,981
1,916
15,560
49,536
1,904
81,204
24,050
$10,000 - $25,000
1,837
31,953
57,125
$50,000 - $100,000
$100,000+
73%
$25,000 - $50,000
$50,000 - $100,000
40%
-23%
$25,000 - $50,000
-23%
$25,000 - $50,000
$25,000 - $50,000
EvaluatePharma® is currently working on developing patient compliance rates for biological cancer products.
The lack of patient compliance percentages means that the revenue per patient will generally be overstated and the number of patients
treated understated.
10
Top 100 USA Drugs: Revenue per Patient vs. No. of Patients (100 to 500k)
Sovaldi, Enbrel & Humira at Price Premium
EvaluatePharma® finds that Sovaldi (Gilead), Enbrel (Amgen/ Pfizer) and Humira (AbbVie) are priced at a premium compared to other
products used to treat between 100,000 and 500,000 patients in the USA. The annual revenue per patient of the Top 100 drugs treating
between 100,000 and 500,000 patients is poorly correlated to the number of patients treated (R2 = 0.20).
USA Revenues per Patient ($)
Top 100 USA Drugs 2014:
Revenue per Patient per Year vs. No. of Patients Treated (100-500k)
60,000
Sovaldi (GILD)
50,000
40,000
Humira (ABBV)
30,000
Enbrel (AMGN)
Remicade (JNJ)
20,000
Neulasta (AMGN)
10,000
0
100,000
y = 109,478,787.773947x-0.782752
R² = 0.199054
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
Top 10 USA Drugs by Sales 2014: USA Revenue per Patient per Year vs. No. of Patients Treated (100-500k)
1
2
3
4
5
6
7
8
9
10
Product
Company
Sovaldi
Humira
Enbrel
Remicade
Abilify
Neulasta
Atripla
Epogen
Eylea
Truvada
Gilead Sciences
AbbVie
Amgen
Johnson & Johnson
Otsuka Holdings
Amgen
Gilead Sciences
Amgen
Regeneron
Gilead Sciences
USA Sales ($m)
2014
No. of
Patients
Revenue
Per Patient
Patient
Off-Invoice
10,098
135,182
56,212
6,078
245,693
24,561
74%
$10,000 - $25,000
4,311
223,884
19,585
63%
$10,000 - $25,000
4,154
277,633
14,716
65%
3,886
394,344
9,180
28%
3,523
277,894
12,679
94%
2,180
143,056
14,404
81%
1,950
129,971
14,555
1,750
112,514
15,662
1,560
153,475
9,960
-31%
$50,000 - $100,000
$10,000 - $25,000
-27%
$5,000 - $10,000
-26%
$10,000 - $25,000
$10,000 - $25,000
$10,000 - $25,000
$10,000 - $25,000
-34%
$5,000 - $10,000
11
Top 100 USA Drugs: Revenue per Patient vs. No. of Patients (>500k)
Januvia, Advair & Lantus at Price Premium
EvaluatePharma® finds that Januvia (Merck & Co.), Advair (GSK) and Lantus (Sanofi) are priced at a premium to other products that treat
more than 500,000 patients in the USA. The annual revenue per patient of the Top 100 drugs, treating between 100,000 and 500,000
patients, is moderately correlated to the number of patients treated (R2 = 0.75).
Top 100 USA Drugs 2014: Revenue per Patient per Year vs. No. of Patients Treated (>500k)
2,500
Januvia (MRK)
Advair (GSK)
2,000
Lantus (SNY)
1,500
Crestor (AZN)
1,000
y = 870,538,116.786405x-0.974941
R² = 0.745858
500
0
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
4,000,000
4,500,000
5,000,000
Top 10 USA Drugs by Sales 2014: USA Revenue per Patient per Year vs. No. of Patients Treated (>500k)
1
2
3
4
5
6
7
8
9
10
Product
Company
Lantus
Seretide/Advair
Crestor
Spiriva
Lyrica
Januvia
Prevnar 13
NovoRapid
Celebrex
Humalog
Sanofi
GlaxoSmithKline
AstraZeneca
Boehringer Ingelheim
Pfizer
Merck & Co
Pfizer
Novo Nordisk
Pfizer
Eli Lilly
USA Sales ($m)
2014
No. of
Patients
Revenue
Per Patient
Patient
Off-Invoice
5,759
4,905,321
1,190
51%
-34%
3,325
1,850,662
1,938
56%
-6%
$1,000 - $5,000
2,894
3,098,491
887
57%
-53%
$0 - $1,000
2,473
1,693,829
1,458
36%
-39%
$1,000 - $5,000
2,422
1,241,435
1,756
90%
-27%
$1,000 - $5,000
2,138
1,040,874
2,031
74%
-36%
$1,000 - $5,000
1,986
3,739,698
532
1,863
1,624,457
1,192
62%
-58%
$1,000 - $5,000
1,672
3,082,429
462
13%
-29%
$0 - $1,000
1,644
2,264,508
723
63%
-74%
$0 - $1,000
$1,000 - $5,000
$0 - $1,000
12
Top 20 Cancer Drugs (2014): Revenue per Patient vs. No. of Patients Treated
Revlimid, Herceptin, Avastin & Rituxan at Price Premium
EvaluatePharma® finds that Revlimid (Celgene) and Roche's trio of leading cancer products (Herceptin, Avastin & Rituxan) are priced at
a premium compared to other Top 20 biggest selling cancer products in 2014. The annual revenue per patient of the Top 20 cancer
drugs is moderately correlated to the number of patients treated (R2 = 0.48).
Top 20 USA Cancer Drugs in 2014, Revenue per Patient per Year vs. No. of Patients Treated
180,000
Revlimid (CELG)
160,000
140,000
120,000
Herceptin (Roche)
100,000
Avastin (Roche)
Rituxan (Roche/ BIB)
80,000
60,000
40,000
y = 11,924,261.280x-0.544
R² = 0.471
20,000
0
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
Note: In theory the products with the highest sales should represent the best patient outcome, cost out of healthcare and
improved patient economic activity relative to the competition, for the indications sales are achieved in.
Within the USA market the price can rise or fall (off-invoice discounting) post approval, which in a free market system is to be
expected. A price rise should signify an enhanced understanding of the drug profile vs. the competition, but may also be the
company taking advantage of the risk of switching patients or entrenched prescribing habits.
Top 10 USA Cancer Drugs by Sales: USA Revenue per Patient per Year vs. No. of Patients Treated 2014
1
2
3
4
5
6
7
8
9
10
Product
Company
Rituxan
Avastin
Revlimid
Herceptin
Gleevec
Stelara
Alimta
Zytiga
Velcade
Afinitor
Average Top 10
Average Top 20
Roche
Roche
Celgene
Roche
Novartis
Johnson & Johnson
Eli Lilly
Johnson & Johnson
Takeda
Novartis
Sales ($m)
2014
No. of
Patients
Revenue
Per Patient
3,707
70,347
52,459
$50,000 - $100,000
2,928
44,552
66,828
$50,000 - $100,000
2,107
17,380
164,859
$100,000+
2,060
28,587
71,513
2,023
64,884
31,006
40%
1,269
37,327
32,997
78%
1,251
26,674
47,300
992
35,801
28,212
983
16,097
61,053
779
7,253
106,675
1,810
34,890
66,290
1,236
24,587
64,266
Patient
Off-Invoice
$50,000 - $100,000
-23%
$25,000 - $50,000
$25,000 - $50,000
$25,000 - $50,000
44%
-20%
$25,000 - $50,000
$50,000 - $100,000
-15%
$100,000+
Note: EvaluatePharma® is currently working on developing patient compliance rates for biological cancer products.
The lack of patient compliance percentages means that the revenue per patient will generally be overstated and the number of
patients treated understated.
13
USA Primary Care (MEPS): Proprietary (NDA) vs. Generic (ANDA) 2005-12
Generics Fill 71% of Primary Care Prescriptions in 2012, versus 39% in 2005
EvaluatePharma®, based on analysis of the primary care MEPS survey, finds that generic drugs (ANDAs) filled 71% of prescriptions in
2012, versus 39% in 2005. The estimated average retail cost per prescription was $31 for a generic and $206 for a branded drug (NDA).
The average retail cost of a generic prescription fell 4% per year between 2005 and 2012 to $31, whilst the average branded (NDA)
drug increased 13% per year to $206, from $89 in 2005.
The MEPS Survey recorded a decline in USA retail sales in 2012, down 2% to $251bn, with three trillion prescriptions filled.
Analysis of USA Retail Primary Care Sales: Proprietary (NDA) vs. Generic (ANDA) 2005-12
250,000
100%
NDA
ANDA
NDA as a %
ANDA as a %
90%
200,000
61%
57%
150,000
100,000
63%
47%
43%
39%
70%
60%
56%
52%
53%
66%
80%
71%
50%
44%
48%
37%
USA Prescription volume %
USA Retail Sales (MEPS) $m
40%
34%
29%
50,000
30%
20%
10%
0
0%
2005
2006
2007
2008
2009
2010
2011
2012
Year
About MEPS: The MEPS (Medical Expenditure Panel Survey), is an annual survey conducted and published by AHRQ (Agency for
Healthcare Research and Quality), U.S. Department of Health & Human Services. It covers 13,000 families/ 35,000 individuals, and
includes a representative sample of prescription medicines in the USA, analysing approx. 350,000 prescriptions. The survey results
are scaled-up to provide an estimate of total pharmaceutical drug consumption, retail sales and prescription volume, in the USA. The
focus of the survey is primary care dispensing of prescriptions and does not cover hospital based drugs.
USA Primary Care (MEPS) Retail Sales, Rx Volume & Cost per Rx: Proprietary (NDA) vs. Generic (ANDA) 2005-12
Year
NDA
ANDA
Total
% Chge
NDA
as a %
ANDA
as a %
USA Retail Sales (MEPS) - $m
2005
143,228
41,222
193,327
77.7%
22.3%
2006
143,168
48,371
197,315
+2%
74.7%
25.3%
2007
167,167
35,847
207,010
+5%
82.3%
17.7%
2008
180,394
42,944
227,622
+10%
80.8%
19.2%
2009
178,822
44,454
234,454
+3%
80.1%
19.9%
2010
190,234
50,054
245,053
+5%
79.2%
20.8%
2011
192,037
52,374
255,852
+4%
78.6%
21.4%
2012
174,843
64,839
251,262
-2%
72.9%
27.1%
2005
1,616
1,023
2,664
61.2%
38.8%
2006
1,573
1,167
2,748
+3%
57.4%
42.6%
2007
1,445
1,275
2,725
-1%
53.1%
46.9%
2008
1,368
1,504
2,878
+6%
47.6%
52.4%
2009
1,307
1,638
2,951
+3%
44.4%
55.6%
2010
1,133
1,907
3,043
+3%
37.3%
62.7%
2011
1,038
2,040
3,083
+1%
33.7%
66.3%
2012
848
2,120
2,974
-4%
28.6%
71.4%
USA Prescription Volume (MEPS)
Average Cost Per Prescription
2005
89
40
73
2006
91
41
72
-1%
2007
116
28
76
+6%
2008
132
29
79
+4%
Drug Inflation Analysis (2005-12)
2009
137
27
79
+0%
Generic (ANDA) Retail Cost Inflation
2010
168
26
81
+1%
2011
185
26
83
+3%
2012
206
31
84
+2%
-3.9%
Branded (NDA) Retail Cost Inflation
+12.8%
Note: "Other" not shown, includes primary care dispensed BLAs.
14
Top 100 USA Generic Drugs (MEPS): Retail Sales per Patient 2012
Simvastatin Tops MEPS Retail Sales Ranking for Primary Care Generic Drugs in 2012; Average Cost of $139 per Year
EvaluatePharma®, based on analysis of the primary care MEPS survey, finds that generic simvastatin achieved the largest retail sales in the
USA at $2.6bn in 2012. The average retail cost per patient was $139 per patient per year, including patient discontinuation.
The annual retail sales per patient of the Top 100 generic drugs in the USA, by retail sales, were moderately correlated to the number of
patients treated (R2 = 0.73).
Top 100 USA Generic Drugs by Retail Sales (MEPS):
Retail Sales per Patient per Year vs. No. of Patients Treated 2012
Retail Sales per Patient
4,500
4,000
-5%
+2%
3,500
+4%
3,000
-2%
-9%
2,500
-0%
+12%
2,000
+2%
1,500
y = 17,515,372.945768x-0.785390
R² = 0.727077
1,000
500
0
0
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000 12,000,000 14,000,000 16,000,000 18,000,000 20,000,000
No. of Patients
USA Generic Drugs by Retail Sales (MEPS) in 2012: Top 20
Generic name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
simvastatin
omeprazole
atorvastatin calcium
acetaminophen; oxycodone hydrochloride
metformin hydrochloride
bupropion hydrochloride
gabapentin
acetaminophen; hydrocodone bitartrate
clopidogrel bisulfate
lisinopril
amlodipine besylate
fentanyl
losartan potassium
isotretinoin
venlafaxine hydrochloride
metoprolol succinate
pravastatin sodium
tacrolimus
escitalopram oxalate
zolpidem tartrate
Total Top 20
Total Generic Drugs
USA Retail Sales ($m)
2012
No. of Patients
Per Year
Retail Sales per Patient ($)
2012
2,596
18,733,106
139
2,342
11,558,375
203
2,238
4,724,998
474
1,774
6,986,250
254
1,556
13,446,203
116
1,397
4,313,127
324
1,391
5,566,061
250
1,241
19,553,869
63
1,181
1,588,281
743
1,130
19,048,099
59
961
8,110,002
118
855
808,211
1,057
825
4,902,328
168
800
363,873
2,198
776
2,117,086
366
769
3,109,823
247
766
7,009,623
109
747
288,545
2,590
724
899,009
805
654
4,655,282
24,721
137,782,150
140
179
64,261.3
533,040,424
121
New Generic
2011/12
2011
2012
2012
Source: EvaluatePharma® analysis of MEPS Survey (22 SEP 2014)
Note: Analysis based on 2012 AHRQ (Agency for Healthcare Research and Quality) Medical Expenditures Panel Survey (MEPS)
2012 survey released August 2014.
15
Medicaid Generic Drugs: Generic Prescription Price Trend 2008 to 2014
-17% -16%
-16% -15%
-14%
-12%
-10%
-5%
-11% -11%
-10% -10% -10% -10%
-8%
+2%
-6% -6%
-5%
-3%
+1% +2%
trazodone hydrochloride
amoxicillin
albuterol sulfate
ibuprofen
clonazepam
fluticasone propionate
cetirizine hydrochloride
loratadine
tramadol hydrochloride
azithromycin
ergocalciferol
metformin hydrochloride
lisinopril
gabapentin
ondansetron hydrochloride
+5%
simvastatin
-0%
montelukast sodium
-15%
Top 20 USA Generic Drugs by Prescription Volume (Medicaid): Price change 2008-14
acetaminophen; oxycodone
hydrochloride
acetaminophen; hydrocodone
bitartrate
-20%
omeprazole
Percentage Decline in Retail Price per Rx 2008-14
Average Retail Price of Top 20 Medicaid Generics Drop on Average 9% per Year
EvaluatePharma®, based on analysis of Medicaid data, finds the average retail prescription price paid for a Top 20 most prescribed USA
generic fell on average 9% per year between 2008 and 2014, from $22.47 to $12.50.
Acetaminophen; hydrocodone bitartrate was the most prescribed generic in 2013. It was also one of only two generics to register a retail
price increase per prescription over 2008 and 2014, up 2.3% per year to $15.03.
Generic Name
USA Top 20 Generic Drugs by Prescription Volume (Medicaid) in 2013: Prescription Retail Price Trend 2008 to 2014
Generic name*
USA Rx Volume
2013
Retail Price per Rx ($)
2008
2014
CAGR
(08/14)
1 acetaminophen; hydrocodone bitartrate
14,875,388
13.13
15.03
+2.3%
2 amoxicillin
12,668,753
10.26
7.53
-5.0%
3 ibuprofen
12,341,085
9.04
6.12
-6.3%
4 loratadine
8,048,186
11.63
6.17
-10.0%
5 omeprazole
7,551,832
34.03
11.39
-16.7%
6 lisinopril
7,512,410
11.78
4.74
-14.1%
7 cetirizine hydrochloride
6,833,522
15.71
8.36
-10.0%
8 metformin hydrochloride
6,352,548
16.25
7.40
-12.3%
9 albuterol sulfate
6,053,052
22.39
15.16
-6.3%
10 gabapentin
5,999,958
54.91
20.53
-15.1%
11 montelukast sodium
5,853,377
12 simvastatin
5,834,895
17.90
6.33
13 fluticasone propionate
5,565,945
33.07
18.11
-9.6%
14 acetaminophen; oxycodone hydrochloride
5,242,638
32.25
34.71
+1.2%
15 azithromycin
5,039,671
29.63
14.70
-11.0%
16 tramadol hydrochloride
4,978,809
13.99
7.24
-10.4%
17 ondansetron hydrochloride
4,606,949
70.49
25.22
-15.7%
18 trazodone hydrochloride
4,408,014
8.59
7.07
-3.2%
19 clonazepam
4,402,266
11.84
7.07
-8.2%
4,243,905
10.02
20 ergocalciferol
22.47
Average of Top 20
Source: EvaluatePharma® analysis of Medicaid Drug Expenditure (22 SEP 2014)
4.87
-11.3%
12.50
-9.3%
Retail Price Trend
2008-14
22.30
-15.9%
Note: Prescription volume in 2013 based on Medicaid data. *Prescription volume and retail prices represent all generic products on the
USA market that are reimbursed by Medicaid.
16
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17
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quality life science sector analysis. Evaluate’s team of
expert analysts transform life science information into
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EPSVP2014BB

BUDGET-BUSTERS: The shift to high-priced innovator

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