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(Reuters) — CVS Health on Monday warned that costs of a potent new class of cholesterol treatments and other specialty drugs in development could eclipse those of expensive new medicines and overwhelm the health care system “if rigid cost control mechanisms are not put in place.”
CVS, the second largest U.S. pharmacy benefit manager which negotiates drug prices for 65 million people through contracts with employers and health plans, noted that two of the new injectable cholesterol fighters — called PCSK9 inhibitors — could be approved by mid-2015 and likely each cost $7,000 to $12,000 a year.
All told, PCSK9 inhibitors could eventually cost the healthcare system as much as $150 billion a year and become the highest-selling class of drugs in history, CVS said.
“The resilience and ability of our health care system to absorb such high costs will be tested if rigid cost control mechanisms are not put in place,” William Shrank, chief scientific officer for CVS, said in a statement.
The company added that the sky-high prices of the new cholesterol drugs could pave the way for other very costly specialty drugs.
CVS' call for cost controls follows sharp criticism from insurers, other payers and politicians of the high costs of recently approved oral treatments for hepatitis C, especially two brands from Gilead Science Inc. that have retail prices of up to $94,500.
Those drugs wipe out the liver virus in more than 90% of patients and don't need to be used beyond 12 weeks for most patients. By contrast, CVS warned that the new cholesterol drugs might be needed “for the duration of patients' lives” and eventually be deemed appropriate for as many as 15 million Americans.
Amgen Inc. and a partnership of Sanofi and Regeneron Pharmaceuticals Inc. are awaiting U.S. approval of their rival PCSK9 inhibitors. They are expected to be approved for patients who are genetically prone to high levels of cholesterol — a population that CVS pegs at 620,000 Americans. They also are likely to be used for those who cannot tolerate standard statin treatments, like Pfizer Inc.'s Lipitor.
The experimental treatments, in combination with statins, knocked down their levels of “bad” LDL cholesterol by as much as 60% more than statins alone.
Gilead's Harvoni, which combines Sovaldi with another of its anti-viral medicines into a daily pill, won U.S. approval late last year and has a retail price of $94,500. By itself, Sovaldi's list price is $84,000 per treatment.
Gilead has acknowledged negotiating price discounts with payers of more than 40% for the two hepatitis C brands, as it vies for market share with a newer rival therapy from AbbVie called Viekira Pak.
Shares of Amgen were up 0.8% on Tuesday on the Nasdaq, while Regeneron's stock gained 2.2%. Sanofi's shares slipped 0.3% in trading in Paris.
Employers will likely see a modest reduction in premium costs trend rates for most group health care benefit plans in 2015, but should also expect a sharp increase in prescription drug coverage costs, according to a report by benefits consulting firm Segal Group Inc.