The American health care system is far and away the most costly in the world. Health care reform is intended to lower costs, but they are still rising, albeit less steeply than in the past. Moderation is not however the case in the area of specialty pharmacy. The medications to treat Hepatitis C are the most cited examples of a general inflationary trend, but the pipeline of expensive medications is extensive.

Yet, policymakers and payers appear unwilling to undertake significant cost controls on medication pricing. Indeed the controversy over the $84,000 price tag for Sovaldi (sofosbuvir) has largely faded, suggesting a certain resiliency in our system’s ability to absorb costs.

We believe that resiliency is about to be challenged in a manner unlike we have seen in the past, at least in the area of pharmaceuticals. A number of pharmaceutical manufacturers are developing a new class of medication to manage high cholesterol — the PCSK9 (proprotein convertase subtilisin/kexin 9) enzyme inhibitors.

PCSK9 Inhibitors

The medication is injected, generally once or twice a month, and evidence from randomized controlled trials suggests that they are well-tolerated and highly effective in reducing low-density lipoprotein cholesterol (LDL-C). While prospective outcomes studies are not yet available to assess their efficacy in reducing adverse cardiovascular events, the scientific community is preparing for likely approval of these medications to manage familial hypercholesterolemia, and there is growing interest in additional subgroups where treatment may be appropriate.

While this class of medications will no doubt lead to substantial clinical improvements in some patients, those improvements will be costly. The PCSK9 inhibitors will be specialty medications and likely priced as such. While we will not know exact pricing until the first generation of these medications is approved for use by the Food and Drug Administration sometime in mid-2015, estimates of annual pricing for these injectable drugs are in the range of $7,000 – $12,000. Given the number of people potentially eligible for treatment with the PCSK9 inhibitors will number in the millions, the potential overall expenditures by payers are huge.

The controversy surrounding the introduction of Sovaldi is instructive in preparing for the PCSK9 inhibitors. While the outcry centered over the price of these treatments—approximately $1,000 a pill—the real issue was what happens when you multiply that price by the size of the eligible population, up to 3 million infected Hepatitis C patients in the U.S. The price tag of curing all of the 1.5 million people currently known to be infected with Hepatitis C in the United States could be as high as $150 billion, likely spread out over more than ten years. Screening and treatment of those not yet diagnosed could double that total.

Ongoing Maintenance Therapy

The PCSK9 inhibitors pose a similar, but in many ways more compelling and complex, set of problems. Their target, hyperlipidemia, is one of the most prevalent conditions in the developed world. And the PCSK9 inhibitors do not provide a cure; they will be prescribed for ongoing maintenance therapy — decades for patients who survive that long. Moreover, they in some ways represent a silver bullet — injected once a month with few side effects, and they reduce LDL cholesterol dramatically.

Existing trial data evaluating the effects of PCSK9 inhibitors on lowering LDL-C have been striking. For example, Phase III data for Amgen’s evolocumab demonstrated LDL-C reductions of 46–64 percent from baseline at week 12 in various patient populations with hyperlipidemia.

PCSK9’s have also been associated with positive effects on other components of the lipid profile, both increasing high-density lipoprotein (HDL) and lowering triglycerides. In studies to date, the medications have been well-tolerated. The main area of concern has to do with neuro-cognitive side effects, but to date, there are not sufficient safety data to definitively understand this risk.

The major rub with the class though is that while there is evidence to show that this class reduces intermediate outcomes (LDL), we have limited information to date about how this class of medications will affect clinical outcomes (primarily cardiovascular events).

Outcomes studies for each drug candidate are in the field today, but may not be available until as late as 2018. However, the recent successes in improving cardiovascular outcomes using ezetimibe (Zetia) plus a statin adds support to the proposition that the lower the LDL cholesterol, the better the outcomes.

The Target Population

This controversy in cardiology is critically important for the eventual target population for the PCSK9 inhibitors, and their long-terms costs to the health care system. The initial label may be limited to familial hypercholesterolemia, but some might argue that all statin intolerant or inadequately responsive hyperlipidemic patients should be treated. As well, off-label use of medications is a fact of clinical life. At the outset, expert endocrinologists and cardiologists will do most of the prescribing, but utilization will spread.

How much will it spread? The prevalence of familial hypercholesterolemia is 1 in 300 to 500, so there are approximately 620,000 patients with this disorder currently living in the United States.

A related group will be those whose genetic status is unknown, but have LDL greater than 190, and are unlikely to get to goal with a statin. The number of individuals in this category is conservatively estimated at one million Americans.

Then there are those who are statin intolerant. It is estimated that approximately 5-15 percent of patients with hypercholesterolemia experience side effects with statins, representing one to three million people in the U.S. Thus as many as 3.5 million Americans may qualify initially for PCSK9 inhibitor therapy.

Pharmacy benefit managers will attempt to limit that number, based on clinical guidelines and expert opinion. They will likely require laboratory tests to show evidence of muscle inflammation or liver damage before allowing treatment for those with statin intolerance. Patients and their doctors claiming subject symptoms of muscle ache or fatigue will have to re-challenge patients. But it is unclear how much these medical management efforts will limit utilization.

And a much broader potential patient population awaits, as the recent set of debates around cholesterol management guidelines indicates. The American Heart Association and American College of Cardiology recently decided that management to a specific LDL cholesterol goal is not appropriate. The new guidelines suggest that those patients who have had a previous cardiac event should be treated initially with high dose statins to lower the cholesterol as much as possible.

It is clear that PCSK9 inhibitors are as, or more, potent than statins. So the argument might even be to treat everyone with a history of coronary artery disease (up to 15 million people) with PCSK9 inhibitors. As noted above, the ezetimibe trials support the proposition that lower LDL leads to better outcomes.

Health Care Cost Implications

So, with this potential patient population, how much is the bill for the health care system? The math is simple. If we assume costs of $10,000 per year, familial hypercholesterolemia and severe hypercholesteremia alone would represent a $16 billion market, dwarfing initial Sovaldi costs. Statin intolerant patients would add an additional $20 billion set of costs. And those with a history of coronary disease could add as much as $150 billion annually.

Even if we limit this latter group to those for whom statins are ineffective (patients who do not reach LDL goals from previous guidelines) the price tag would be somewhere between $50 and $100 billion. And this leaves aside what is likely the eventual target for the manufacturers, primary prevention.

As this is chronic therapy, PCSK9 sales could be expected to persist and grow over time, and will likely be the highest selling class of medications in history. Plus, as a biologic agent, there will not be a simple pathway to cheaper generics in a 10-15 year timeframe. Even in a system that costs $4 trillion per year, a single therapy adding $100-200 billion in costs annually is extraordinary.

Managed pharmacy care, indeed the health care system, has never seen a challenge like this to our resilience in absorbing costs. Payors, the employers, and health insurers, will first be shocked, then expect action. Action will take the form of compliance with clinical guidelines, and careful managed care oversight.

But in addition, perhaps the costs of PCSK9 inhibitors will push us to develop some consensus about the pricing of new specialty medications, as part of a more thoughtful discussion about the use of scarce resources on behalf of patients.