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Tesaro ovarian cancer drug to cost $60,000 – $177,000 a year

April 20, 2017

After disclosing the price of a new ovarian cancer drug at a dose level that patients wouldn’t even be starting at, biopharmaceutical company Tesaro Inc. immediately faced ridicule.

The company TSRO, -4.06%  said its Zejula would cost $9,833-a-month at a 200 mg daily dose, but then said that patients would start at 300 mg a day. That would translate to a higher price tag at that starting dose, or $14,750-a-month.

That means Zejula could cost as much as $177,000-a-year — a “sticker shock” — but it’s likely to be closer to $119,000-a-year, said Janney analyst Debjit Chattopadhyay. Zejula is intended for maintenance treatment in women who have already undergone chemotherapy. The length of treatment varies, but it can last an extended period of time.

Here’s why: Zejula’s price varies by dosage, and dosage could vary quite a bit. Patients who have a bad reaction, such as low blood platelet count or anemia, are supposed to have their dose reduced, from 300 mg to 200 mg, and the dose could go as low as 100 mg.

 

The share of patients who need a dose reduction could be quite high, since in clinical trials 69% of patients got a dose reduction or interruption, being brought down to 200 mg daily, a $9,833-a-month cost, or 100 mg daily, a $4,917-a-month cost.

That means about 30% of patients would face a $14,750-a-month cost, with the decision about dose reduction usually happening in the first couple months of treatment, Tesaro spokesperson Jennifer Davis said. Average pricing for Zejula will come in at about $10,350 a month, Leerink analyst Seamus Fernandez said.

There’s a catch though: there’s no guarantee those rates will translate into real world patients.

 

“Because clinical trials are conducted under widely varying conditions, adverse reaction rates observed…may not reflect the rates observed in practice,” according to the Food and Drug Administration’s Zejula prescribing information.

For its part, Tesaro said it put out the $9,833-a-month price because it “is the dose we anticipate most patients will receive,” Davis said. “The details around dose titration and patient management have been presented and published several times previously, and are included in the prescribing information.”

But critics questioned the company’s intentions. The Street’s Adam Feuerstein described it as “PR razzle dazzle to make the price…look cheaper than it really is.”

Zejula’s price is about 7% more than Clovis Oncology CLVS, +3.31%  Inc.’s rival drug Rubraca, also part of a class of cancer drugs called PARP inhibitors, said Leerink’s Fernandez. Another rival drug, AstraZeneca’s AZN, +0.60%  Lynparza, is priced slightly lower, at $12,600 a month.

Tesaro shares slumped 0.7% in premarket trade Thursday. Company shares rose 0.7% over the last three months, compared with a 2.9% rise in the S&P 500SPX, +0.34%

http://on.mktw.net/2pVWbNL

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