While breakthroughs in cancer treatments tend to come in incremental steps, payers in the U.S. cannot continue to pay breakthrough prices for incremental improvements in cancer drugs, two scientists with the National Cancer Institute (NCI) said after finding no rationale for the hefty prices of new cancer drugs.

Some experts and drugmakers have touted biosimilars as the way to reduce those prices. While biosimilars targeting blockbuster cancer drugs are in the works, they will have a marginal impact, at best, on the prices of those drugs in the U.S., at least in the near-term, NCI researcher Vinay Prasad told BioWorld Today.

"Biosimilars will not rid us of the crushing burden cancer drugs have on our health care system," Prasad said.

Sham Mailankody elaborated on his colleague's comment. "It is good that biosimilars are coming," he said, but they are likely to offer only relatively small savings. As an example, he pointed to Sandoz Inc.'s Zarxio, the first biosimilar approved by the FDA. (See BioWorld Today, March 9, 2015.)

Mailankody said Zarxio is expected to price initially at a 10 percent to 15 percent discount from the cost of its reference product, Amgen Inc.'s Neupogen (filgrastim), which is used to treat neutropenia, a common side effect of chemotherapy. While such a discount would be a small step in reducing drug prices, it would be a step in the right direction, he added.

When asked about the price of Zarxio at an FDA advisory committee meeting earlier this year, Sandoz's Mark McCamish responded that he couldn't say what it would be given the complexity of drug pricing in the U.S. In some cases, it might be on par with that of Neupogen, he said. (See BioWorld Today, Jan. 8, 2015.)

That price may drop somewhat in time. In the EU where Sandoz's Zarzio is one of nine filgrastim biosimilars on the market, the follow-ons have led to expanded use of filgrastim and about a 30 percent price reduction.

Interchangeables – follow-on biologics that can be automatically substituted for the reference biologic – won't significantly address the pricing problem, either, Prasad said. While interchangeables could introduce more competition for biologics, he called them a "fake fix." That's because pricing isn't just about discounts; it's also about new innovative and next-generation drugs becoming the standard of care.

EVOLVING STANDARD OF CARE

By the time biosimilars to an off-patent cancer drug hit the market, a next-generation biologic or breakthrough therapy could be available, Prasad said. Consequently, many oncologists in the U.S. would have moved on to using the newer drug, even though a next-generation biologic might offer only marginal improvements or a different dosing formulation or regimen.

In a recent study of the pricing of new cancer drugs approved by the FDA between 2009-2013, Mailankody and Prasad found that nearly 60 percent of the 51 new cancer drugs approved were next-in-class products that had a median price of $119,765 per year. Sometimes, the benefits of those next-generation drugs are simply a matter of convenience. If there's a survival benefit, it can generally be measured in weeks or months, Mailankody noted. (See BioWorld Today, April 7, 2015.)

Prasad added that only a third of the new cancer drugs approved by the FDA in that five-year period had any improvement in survival. Of the 20 most recently approved drugs in the period, Roche AG's Gazyva (obinutuzumab) is at the cheaper end of the price scale, with a Redbook annual price of $74,304, according to the study that was published earlier this month in JAMA Oncology. Yet Gazyva offered the biggest progression-free survival (PFS) improvement of the 20 drugs – nearly 12 months in chronic lymphocytic leukemia.

The anti-CD20 therapy is being tested in other cancers and is seen as a potential follow-on for Roche's Rituxan (rituximab), which is already off patent in the EU and faces U.S. patent expiration in the next few years. Several major drug companies are in the late stages of developing rituximab biosimilars, including Boehringer Ingelheim GmbH, Celltrion Inc., Coherus Biosciences Inc., Pfizer Inc. and Sandoz. But if Gazyva does as well against other cancers targeted by rituximab, it could become the drug of choice in the U.S. before any biosimilars are approved. (See BioWorld Today, Feb. 5, 2015.)

Most of the 20 recently approved drugs failed to demonstrate an improvement in overall survival (OS). Of those that did, ado-trastuzumab emtansine, sold as Kadcyla by Roche, showed the longest improvement in OS at 4.2 months in metastatic HER2-positive breast cancer. Considered a breakthrough drug in the U.S., Kadcyla is an antibody-drug conjugate linking trastuzumab (Herceptin, Roche) to the cytoxic agent DM1 and is priced at more than $113,000.

While biosimilars to Herceptin could lose out to Kadcyla as the new standard of care in the metastatic indication, they still could be competitive in the first-line indication where Herceptin remains the drug of choice. Top-line data from a recent phase III study of Kadcyla failed to beat Herceptin and a taxane as a first-line treatment in HER2-positive breast cancer. (See BioWorld Today, Dec. 22, 2014.)

That's good news for companies like Amgen Inc., Celltrion and Pfizer, which have trastuzumab biosimilars in phase III development in the EU and U.S., according to BioWorld's report Biosimilars: A Global Perspective of a new market – Opportunities, Threats and Critical Strategies 2014.

THE MEDICARE WRENCH

Another factor that could work against cancer biosimilars is Medicare, which is the biggest payer of cancer drugs. By law, Medicare has to cover all approved cancer drugs and those listed in the National Comprehensive Cancer Network Compendium, Prasad said. While third-party payers can negotiate the price with drugmakers, Medicare cannot.

In addition, oncologists are incentivized by the current Medicare Part B program, which covers drugs administered in the doctor's office, to use more expensive cancer drugs as opposed to a discounted biosimilar, Mailankody said.

Regardless, he said, speaking as an oncologist, doctors should have frank discussions with their patients about the marginal benefits of some of these new cancer drugs.