Vertex’s Kalydeco combo could run payers $10M-plus per life, PBM figures

Apr 13, 2015
“Factor in 28 years of treatment for a patient starting the regimen at age 12, and that’s a lifetime therapy cost of $10.3 million.” -Managed Care

Sky-high drug prices have been causing their fair share of consternation among payers lately, and industry watchers have suspected for a while now that Vertex ($VRTX) will stir the pot when its new cystic fibrosis combo–expected to win FDA approval later this year–hits the market. But just how much will payers need to shell out for the new med over time? Prime Therapeutics has some ideas.

According to some number-crunching from a pair of Prime employees, the Vertex med–if priced roughly on par with solo Kalydeco–will cost the PBM $367,000 per year with medical and pharmacy costs included, Managed Care reports. Factor in 28 years of treatment for a patient starting the regimen at age 12, and that’s a lifetime therapy cost of $10.3 million, they figure.

And while the new drug will help patients dodge some future medical costs, it’s not enough to make up for the high price, they say. “You can’t pay for this with medical cost avoidance,” Prime’s Patrick Gleason told the magazine.

It’s no secret that Kalydeco is pricey, as many orphan drugs are. When it arrived on the scene in 2012, its $311,000-per-year-pricetag offset its tiny patient population; originally, the FDA green-lighted it only for patients with the G551D genetic mutation, one that affects only 4% of CF patients worldwide.

Thing is, with the tandem med–comprising Kalydeco and new compound lumacaftor–Vertex is going for an approval in patients with a mutation dubbed F508del, and if it gets one, its therapy could benefit 8,500 U.S. patients age 12 and older. Eventually, the Massachusetts outfit believes, its lumacaftor launch could help it reach 10 times as many patients as Kalydeco currently does.

As the pushback to pricey hep C meds has recently shown, payers don’t always take kindly to lofty stickers for larger patient pools, and the company knows it. On February’s Q4 conference call, Chief Commercial Officer Stuart Arbuckle seemed to be prepping payers for the blow, noting that the drugmaker was “investing in disease education to help payers estimate the number of eligible patients they may have in their plans.”

Luckily for Vertex, though, its meds won’t have any competition for the foreseeable future. That means it’ll be free of the price war that’s enveloped hep C drugmaker Gilead ($GILD) and rival AbbVie ($ABBV), which touched off the battle by negotiating an exclusive position with PBM giant Express Scripts ($ESRX).

Written by Carly Helfand and originally published on on April 10, 2015