Cigna’s Bradbury Talks PCSK9 Contracts And Value Versus Volume

Cigna Corp. has signed value-based contracts for the two PCSK9 inhibitors on the market for high cholesterol, linking reimbursement to LDL-C reduction, but the insurer also hopes to analyze data for cardiovascular outcomes. Cigna announced the new contracts for Amgen Inc.’s Repatha (evolocumab) and Sanofi/Regeneron Pharmaceuticals Inc.’s Praluent (alirocumab) May 11.

The contracts represent the first time an insurer has unveiled a value-based agreement for its commercial business with both PCSK9 marketers, Amgen and Sanofi/Regeneron. The contract with Cigna is the third value-based reimbursement arrangement Amgen has made for Repatha and the first Sanofi/Regeneron have publically disclosed for Praluent.

“I think what we will find is that integrated health plans that have [pharmacy benefit managers] of their own will be more in line with driving this forward,” Bradbury said.

In this instance, the contracts are independent of each other, but share the same objective. If patients taking the two drugs aren’t able to reduce their LDL-C levels at least as well as what was experienced in clinical trials, the companies will provide deeper discounts on the cost of the drugs beyond the rebates already negotiated. If the drugs meet or exceed the expected LDL-C reduction, the original negotiated price remains in place. The level of discount was not disclosed.

A 'Material' Investment, Bradbury Says

Cigna also plans to analyze whether or not there are cardiovascular improvements for Cigna customers related to their treatment with the medications beyond lower cholesterol while it evaluates integrated medical and pharmacy claims data.

“This is one of the wonderful parts of these outcomes based incentive agreements,” said Cigna Senior VP-Integrated Clinical and Specialty Drug Solutions Christopher Bradbury. “It pushes us and others forward in terms of investing in additional analytics, investing in additional insights that help us understand, and the industry understand, what type of value clinically and financially is driven short-term by different products.”

The company will be monitoring its claims data health events like stroke rates and heart attack rates. Cigna, which has become a leader in outcomes-based reimbursement, is making a “material” investment in this area of reimbursement, Bradbury said. “It is very important that we continue to invest in these analytics and insights to drive back to the best decision-making,” he added.

Cigna has seven different outcomes-based reimbursement contracts in place for different drugs and has been proactive about approaching manufacturers, though Bradbury said he is beginning to see more manufacturers approach Cigna about alternative reimbursement models. To be ideal candidates, drugs have to meet certain criteria, he said. They have to be part of a big therapeutic area, around which there are well defined metrics for measuring outcomes, and there has to be competition.

The PCSK9s meet that criteria, and in this case, Cigna wanted to sign contracts with both manufacturers, partly because both drugs are currently listed on Cigna’s formulary and also because data from large cardiovascular outcomes trials should be available later this year or early next to better inform payers, physicians and patients about how best to use the drugs.

“With that in mind, we want alignment with both,” Bradbury said. The contracts extend for more than one year, with flexibility built in to revise the current arrangement if new data emerges around safety and/or efficacy. Cigna has no plans to ease any market access restrictions on the drugs as a result of the new contracts.

The contract differs from the one Amgen signed in November with Harvard Pilgrim Health which similarly linked discounts to LDL lowering, but also provided Repatha with a preferred formulary position. (Also see "A Closer Look At The US Pricing Pushback" - Scrip, 9 Dec, 2015.)

Drug companies and insurers are increasingly interested in outcomes-based reimbursement as a way to find middle ground in pricing negotiations. Payers say the price of certain new drugs are too high, while drug companies argue that the cost of the medicines benefit overall healthcare costs and society.

Repatha and Praluent have been targeted by payers because of their high prices – more than $14,000 per year at the wholesale acquisition cost – substantially more than generically-available statins. The biologics have demonstrated excellent efficacy on the surrogate marker of LDL cholesterol lowering but are intended only for certain patients who don’t respond to statins, and payers have been tough about restricting access to the drugs.

Both drugs were approved by FDA in the summer of 2015 for adults with heterozygous familial hypercholesterolemia (HeFH) or clinical atherosclerotic cardiovascular disease, but neither one has gained any substantial traction in the market, which the manufacturers say is because of unprecedented market access barriers.

In a statement regarding the Cigna contract, Amgen said, “Amgen has been exploring a number of options with payers to create innovative approaches to ensure increased budget predictability, including pay for performance agreements like this one.”

However, the company added there remains a large gap between patients who have coverage and those who are getting access to Repatha. “Among commercial payers in the first six month after approval, we saw a final rejection rate of 75% for PCSK9s.”

Sponsors are also complaining about the paperwork burden imposed by payers, something that will be heightened with the value-based contracts. (Also see "Regeneron: PCSK9s Drowning In Paperwork" - Scrip, 5 May, 2016.)

Praluent generated $13m in first quarter sales, while Repatha brought in $16m for Amgen, dismal figures for drugs that investors are expecting will eventually become blockbusters. Cardiovascular outcomes data showing the drugs reduce events like heart attacks and strokes would make a big difference in opening market access when they become available, and depending on how the trials read out. The results are expected later this year.

Novartis AG has faced similar market access challenges with its new heart failure medicine Entresto, even though it launched with positive cardiovascular outcomes data, including improved mortality and lower hospitalizations. Novartis has signed outcomes-based reimbursement contracts for Entresto, including one with Cigna as well as with Aetna Inc., relying on the clinical trial endpoints of reduced deaths and hospitalizations as a way to determine payment. (Also see "Novartis To Payers: Entresto Works Or You Get A Discount" - Scrip, 12 Feb, 2016.)

But there are a lot of challenges to address before outcomes-based reimbursement contracts become commonplace. Bradbury speculated that cost is one reason more insurers aren’t participating.

“It is a significant investment to set up, operate, analyze, develop insights and then take actions based upon what we find from these contracts and analytics,” he said. “It’s not just contract administration, but it is really digging into what are we seeing in subpopulations, what are we seeing in how we are supporting the customer, how we are supporting the patient.”

It is an essential area for trying to tackle problems with drug costs, the exec noted. "We are deeply committed and believe to unlock public health and affordability in the US [drug] delivery system that we have to align more reimbursement around value versus paying on volume."

But not every payer has access to the wealth of information required to collect and analyze data at a level all of the industry players can have high confidence in, he said. As part of its commitment to the space, Cigna said it vows to make public the insights it collects.

“I think what we will find is that integrated health plans that have [pharmacy benefit managers] of their own will be more in line with driving this forward,” Bradbury said.