Is Checkpoint Inhibitor Price Competition Coming In The Oncology Space?
Programmed cell death 1 (PD-1, blue) immune checkpoint protein bound to programmed death-ligand 1 ... [+] (PD-L1, red) protein. 3D rendering. getty  At the annual American Society of Clinical Oncology (ASCO) meeting in early June one of the recurring themes was patient access to cancer drugs and specifically the problem of financial toxicity; in other words, how out-of-pocket costs can cause financial problems for cancer patients and create barriers to access. At ASCO, researchers highlighted the issue of patient access in relation to a late-breaking study about Junshis toripalimab, which may become the 10th Food and Drug Administration (FDA)-approved anti-PD-1/PD-L1 checkpoint inhibitor, with potentially multiple indications, including mucosal melanoma and non-small cell lung cancer (NSCLC). Toripalimabs sponsor in the U.S. Coherus, has declared its mission is to increase access to cost-effective medicines. Accordingly, the company is expected to undercut competitors on price if the drug gets the nod from FDA. At long last, price competition among checkpoint inhibitors may be coming to the cancer space. Then theres another self-declared disruptor of drug pricing, EQRx, who has said it wants to aggressively discount a drug its working on. Together, EQRx and CStone are developing the monoclonal antibody, sugemalimab, which is in late stages of clinical trials. Importantly, in Phase 3, sugemalimab hit its primary endpoint of progression-free survival as a therapy for certain patients with stage III NSCLC. If toripalimab and sugemalimab do obtain marketing authorization for NSCLC, they would enter an already crowded therapeutic class, led by Mercks Keytruda (pembrolizumab). Historically, as new anti-PD-1/PD-L1 entrants have gained approval  such as GlaxoSmithKlines Jemperli (dostarlimab) in April of this year - price competition has not been a factor. This is odd, given how competitive and relatively crowded the various oncology indications targeted by checkpoint inhibitors have become - from melanoma to NSCLC to breast, renal, and colorectal cancer. Price competition is simply not yet commonplace in the immuno-oncology field, even in instances where sub-populations of patients can be stratified by the same set of biomarkers. In March of this year, Ronny Gal, a senior research analyst covering biopharmaceuticals at Bernstein, suggested companies like Regeneron and Sanofi try discounting, in a preemptive strike of sorts to fend off the potential of future price controls established by the government. On both sides of the aisle, legislators have cited market failure and the lack of genuine competition as being a justification for introducing price measures. Direct price controls are part and parcel of House Democrat-led H.R.3 (Lower Drug Costs Now Act), Senator Wydens recently released manifesto on drug pricing reform, but also a Trump Administration executive order signed last July. Indirect price controls have also featured in proposals on ways to align price and value, particularly of cancer drugs. Specifically, legislators are seeking to align price and value through the commissioning of health technology assessment studies to be carried out by independent entities. Of course, drug manufacturers are not the only ones to blame for the lack of price competition. The issue of why there is so little discounting in the oncology space relates in part to government mandates at the state and federal levels that require coverage of all or substantially all cancer drugs. Oncology is one of six Medicare Part D protected classes. In the context of this provision, Part D plans are required to cover all or substantially all cancer outpatient drugs. Similarly, Medicare Part B regional contractors are obligated to cover practically all physician-administered cancer drugs. Such mandates prevent payers from being able to negotiate (or have leverage to negotiate) cancer drug pricing. Its unknown to what extent these regulations have contributed to the dearth in price competition. As new anti-PD-1/PD-L1 agents obtain marketing authorization, market-driven price reductions could go a long way towards forestalling direct and indirect price control measures.