Pipeline alert: Newly approved Orkambi could add $1 PMPM new spend

Orkambi, manufactured by Vertex Pharmaceuticals Inc., is the latest in a string of high-cost blockbuster drugs to hit the market. The U.S. Food and Drug Administration (FDA) officially approved it on July 2, 2015. Like other recently approved blockbusters, it has the potential to make a big difference in the lives of our members. It also has the potential to make a huge impact on per member per month (PMPM) drug spend.

Cystic fibrosis is a genetic disease. It affects multiple organ systems, most importantly the lungs and airways. It can lead to life-threatening lung infections, the inability to absorb nutrients from food, and for some individuals, the need for a lung transplant. It’s estimated that 30,000 Americans are living with cystic fibrosis.

In 2012, the FDA approved Kalydeco (ivacaftor), the first treatment to target a rare gene mutation causing cystic fibrosis. This mutation affects about 4 percent of people with cystic fibrosis. Kalydeco is priced at $300,000 annually per member being treated.

Orkambi combines Kalydeco and another medicine, lumacaftor. This combination drug will be used to treat people 12 years and older whose cystic fibrosis stems from two copies of the F508del genetic mutation. F508del is the most common mutation and occurs in nearly 50 percent of people living with cystic fibrosis.

Orkambi has been priced at $259,000 per year.1 Prime's research estimates that it could cost the U.S. health system as much as $3.8 billion annually to treat the 15,000 people for which Orkambi is approved.

For Prime’s clients and owners, this translates to a per member per month (PMPM) cost impact of about $1. It’s also important to keep in mind that Orkambi treats cystic fibrosis, it doesn’t cure it. This means that eligible members will continue to accumulate these drug expenses throughout their lifetimes.

Orkambi is projected to cost the health system as much as $3.8 billion and increase commercial PMPM costs by $1 in new spend.

Your Blue Cross plan is prepared to help you manage Orkambi costs. Through strategies such as prior authorization, we can help you maximize member health outcomes while controlling drug spend and help make sure the right people get Orkambi.

1. Pollack, Andrew. “Orkambi, a new Cystic Fibrosis drug, wins F.D.A. approval.” The New York Times. July 2, 2015. http://www.nytimes.com/2015/07/03/business/orkambi-a-new-cystic-fibrosis-drug-wins-fda-approval.html.

 

blog comments powered by Disqus