Celebrating a New Schizophrenia Drug ... and Hoping The Value It Delivers Is Recognized

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The FDA approved BMS’ Cobenfy schizophrenia drug. It’s from a new class, and it doesn’t appear to carry with it the metabolic side effects -- especially weight gain -- that plague other schizophrenia treatments. 

That has the potential to make this a game-changer, and this is absolutely an approval to cheer. 

A couple of additional, value/pricing points. 

First, the value delivered by delivering a medicine that doesn’t have the same side effect profile as the previous generation of antipsychotics is huge. But that value probably isn’t fully captured in a lot of the usual metrics used when looking at the economics of drugs. 

I hope hope hope that payers don’t play games with this one. Medicaid will pay for it, thank goodness, (more on that below) but there’s always reason to worry about commercial payers. 

Second, a quick note on the pricing math here. BMS said the drug will carry a list price of $22,500. That is, as several outlets have noted, a tick outside of the ICER benchmark, which ranges from $16,000 to $20,000. 

But: 70% of patients with schizophrenia are enrolled in Medicaid, and Medicaid gets the “best price” for the drug, or a rebate of 23.1%, whichever is lower. So that puts the net price of Cobenfy at around $17,000, which is well within ICER’s cost-effectiveness range.

What’s the deal with Bernie Sanders and PBMs?

That’s not intended to be a provocative introduction to a grand theory. I don’t have a good answer. It’s just that, after this week, I’m even more puzzled about why the nation’s highest-profile crusader for low drug prices has not only let PBMs off the hook but instead allied with them.

In his hearing this week on obesity meds, Bernie held up PBMs as champions of access, even as they provided answers that seemed to be contradictory to their past practices, practices at the center of an FTC lawsuit.

That’s odd, right? Like, these companies are the very definition of Big Business. Bernie has made a career out of sticking it to Big Business. Yet, in this case, he’s so committed to taking out pharma companies that he’s going to just credulously amplify PBM statements that seem at odds with the incentives in the system and contrary to past behavior?

I know I’m not the only one asking this question. I received lots of interesting reader mail on Wednesday – mostly from non-pharma types – flagging frustration with Bernie’s blind spot.

Open to hypotheses here. What’s going on?

Sometimes, I despair that the PBM industry is just too convoluted and I will never understand it. And then I look at hospitals, and PBMs start seeming simple by comparison. 

Hospitals are an industry with a customer base that has never been more able to pay (i.e. insurance rates are at historic highs); they’re getting tens of billions of dollars in 340B revenue, which is increasing at ~20% a year; and they enjoy -- per a great JAMA study yesterday -- nearly $40 billion in tax breaks. 

And yet the messaging from hospitals always distills down to two somewhat contradictory arguments: 1) they’re forever on the brink, and 2) they don’t want the status quo to change. 

Anyway: this digression was supposed to be a brief item highlighting the JAMA study (study author Ge Bai goes deeper in a related Forbes.com that is also worth the read), but I can’t help but wonder what would happen if we blew up the whole system and reallocated the $100 billion in tax breaks, 340B dollars, and other handouts to hospitals in a way that was more tightly aligned to system sustainability. 

I know that’s not remotely in the ballpark of “reasonable” or “possible,” but I feel like a little blue-sky thinking wouldn’t hurt here. 

Elsewhere: 

• The mammoth final rule on “misclassification” in the Medicaid Drug Rebate Program dropped last Friday, but the document touched so many seemingly unrelated items that it’s taken everyone a week to digest things. STAT has a look at one of the pieces not to make the final rule: a survey that would have demanded oodles of data about selected high-priced drugs. Such a survey would have required a lot more information than Medicaid needed to actually do its job, raising industry hackles, and CMS apparently agreed, in the end. BIO.News covered some of the other pieces of the rule with implications for industry.

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