Repatha, Amgen’s breakthrough medicine that attacks treatment-resistant hyperlipidemia, has been shown to save lives and prevent heart attacks and stroke. PBM policies, enabled by a rigged cost-effectiveness evaluation produced by the Arnold funded ICER, have made it made it impossible to get the medicine. First, the PBM prior authorization process has been lengthy and confusing because, it was argued, Repatha was too expensive to make widely available.
So Amgen increased the rebate amount it would provide for Repatha. Amgen’s rebate deals with payers are 65 percent of Repatha's commercial revenue. In turn, the PBMs simply pocketed the rebates and charged people who actually got through the step therapy gauntlet up to 50 percent of Repatha’s NON-rebated price. And of the small percent of patients who actually got permission to use Repatha, nearly 75 percent never filled the prescription because of the huge out of pocket cost.
A few weeks ago, Amgen cut the list price of Repatha by 60 percent, as a way of reducing the out of pocket cost to patients. And it also meant that PBMs like Express Scripts were getting less rebate loot.
It did so in a way that ultimately embarrassed and exposed the PBM rebate game.
According to the company’s press release: “Amgen is making Repatha available at a reduced list price by introducing new National Drug Codes (NDCs). SureClick®, the most commonly used delivery system, will be available immediately; the Pre-Filled Syringe and Pushtronex® (monthly, on-body infusor) delivery systems will be available in the next 2-3 months. The lower priced Repatha is identical to the Repatha currently available…At the same time, Amgen will continue offering Repatha at its original list price until 2020 or sooner.”
Express Scripts responded to the Amgen gambit by announcing it would create a separate Flex formulary of products with lower list prices.
It will be interesting to see if such a move gets traction. Adam Fein notes that someone in Express Scripts said that employers are addicted to rebates. That may be true, but that begs the question of why are PBMs and health plans are still supplying the employers rebate fix.
By forcing a real choice between a rebate driven or patient-driven drug benefit Amgen has put the PBM business model on trial. How many PBM and employers will continue to use the higher price to rake in rebates? How many will use the lower price? And how will this affect prior authorization and step therapy?
In the short-term patients may not benefit. In the long term, I believe Amgen is forging a path other companies will follow. Amgen cut the price because it aligns with a business strategy based on increasing access and demonstrating value. And it aligns with Amgen’s recognition that it cannot rely on the newly integrated health plans and PBMs to deliver value. The company will have to deliver value directly to patients and physicians, something that PBMs are unable to provide.