• by Thom Forbes  @tforbes, March 29, 2017

The FDA yesterday approved the use of Dupixent, a twice-a-month injectable treatment for moderate-to-severe eczema — a chronic, itchy skin rash — made by Regeneron and Sanofi, which in turn announced that they had agreed to set the price at $37,000 per year following gives-and-takes with pharmacy benefit managers.

“In an effort to head off another public battle over the soaring cost of some prescriptions, the drug makers … took the unusual step of directly negotiating with insurers over the price and other details ahead of time. What consumers pay for drugs has come under heightened scrutiny in the last few years, most recently by President Trump, who has promised several times to take drug companies to task over their costly products,” reports Katie Thomas for the New York Times.

That $37,000 figure is itself fluid, according to a release from Regeneron. “Actual costs to patients, payers and health systems are anticipated to be lower as [Wholesale Acquisition Cost] pricing does not reflect discounts, rebates or patient assistance programs.”

Tarrytown, N.Y.-based Regeneron and Paris, France-based Sanofi “are still reeling from the disappointing launch of their anti-cholesterol drug Praluent last year. Many analysts say the drug flopped in part because of insurers’ concerns that the $14,600 a year list price would be too costly, which led them to restrict coverage. A similar drug from Amgen Inc. that also carried a high price tag also had disappointing sales,” reports Joseph Walker for the Wall Street Journal.

Regeneron CEO Dr. Leonard Schleifer “said the companies learned from that experience and took extra steps while setting the price for Dupixent. ‘I wanted to demonstrate that adults in the room can be responsible on both sides,’” Schleifer tells Walker.

“‘This is really a great example of how it should work,’ [said] Steve Miller, the chief medical officer of Express Scripts, the pharmacy benefit manager, and one of the loudest critics of high drug prices. ‘Our plans would obviously like a lower price. [Regeneron's] shareholders would like a higher price. I think the fact we disappointed everyone probably means this came in where it should have,’” reports Matthew Herper for Forbes.

But Peter Maybarduk, director of the Access to Medicines program at Public Citizen “noted that negotiations still took place out of the public eye and within the context of a system that is inherently unfair,” points out the NYT’s Thomas. “‘It’s the arrangement that corporations found beneficial in a system that provides monopolies and rewards secrecy, and we should ask for considerably more as the standard,’ Maybarduk said.”

The FDA approval for Dupixent is actually for “atopic dermatitis,” which it says is the most common of the many types of eczema. “Onset typically begins in childhood and can last through adulthood,” according to its release. 

“The cause of atopic dermatitis is a combination of genetic, immune and environmental factors. In atopic dermatitis, the skin develops red, scaly and crusted bumps, which are extremely itchy. Scratching leads to swelling, cracking, weeping clear fluid, and finally, coarsening and thickening of the skin,” the FDA continues.

“According to a 2015 report from business research firm GlobalData, the global eczema market is slated to grow to $7.3 billion by 2024, with a compound annual growth rate of 7.5%. And the National Eczema Association estimates about 17.8 million people in the U.S. have moderate to severe eczema or atopic dermatitis,” according to Jacob Bell for BioPharma Dive.

“There are many treatments out there now, from simple skin lotions to steroid creams and immune suppressant drugs like tacrolimus. But none of these works for everybody, and the immune suppressant drugs can raise the risk of cancers such as lymphoma,” Maggie Fox reports for NBC News. “Dupixent is for the hard-core cases that aren't helped by anything else.”

The Boston Business Journal’s Max Stendahl points out one potential pitfall for Regeneron and Sanofi Genzyme, the specialty care global business unit of Sanofi that is based in Cambridge, Mass. and employs about 5,000 people in the state. The two firms “recently filed a lawsuit in Boston federal court that seeks to preempt a possible patent challenge by rival Amgen. The complaint asks a judge to rule that Dupixent does not infringe a patent held by the California-based company on a failed asthma treatment,” he writes.

“The patent at issue in the lawsuit was issued to Amgen in the 2000s, when it was attempting to develop an asthma treatment. Amgen abandoned development of the drug following disappointing results, the lawsuit said,” Reuters’ Nate Raymond reported on March 21. “The complaint said that in recent days lawyers for Sanofi and Regeneron learned Amgen had hired lawyers to pursue patent infringement litigation related to Amgen's work on that treatment.”