Every year, Express Scripts crunches the previous year's data to uncover payer spending trends. One of the most encouraging of those trends is the steep drop-off in spending on cholesterol-lowering drugs.
Last year, health care payers forked over 14% less for medications like statins that are designed to reduce bad cholesterol. That's a big decline given only spending on diabetes drugs eclipses spending on high blood cholesterol drugs.
However, before payers pop champagne corks, a new class of cholesterol fighting compounds are working their way through trials at Amgen (NASDAQ:AMGN), Regeneron (NASDAQ:REGN), and Pfizer (NYSE:PFE) that are likely to cause spending to spike in the future.
Generics make it cheaper, for now
The decline in spending on cholesterol busting compounds is thanks in part to the expiration of patent exclusivity for some of the nation's best-selling drugs. The biggest of these drugs, Lipitor, racked up more than $125 billion in total sales for Pfizer (peaking at over $10 billion per year) before it lost patent exclusivity in 2011.
The widespread availability of generic statins is cutting into sales of those branded statins remaining on the market, including Merck's (NYSE:MRK) Vytorin and AstraZeneca's $5.6 billion a year Crestor (which goes off patent in 2016).
As a result, the unit cost for cholesterol-lowering drugs fell more than 12% last year as the percentage of scripts filled by generics rather than branded alternatives improved to better than three out of every four prescriptions.
Will spending spike?
The spending slide may shift back to a spike if a new class of cholesterol-fighting drugs known as PCSK9 inhibitors makes its way to market.
Statins encourage the liver to remove LDL from the bloodstream by reducing the production of a cholesterol-creating enzyme. This new class of drugs works by limiting PCSK9's production of a key protein that reduces the number of LDL receptors on cells responsible for eliminating LDL from the bloodstream.
Since the two have differing mechanism of action, doctors could prescribe them as an alternative to, or alongside, statins.
That's because statins have long been known to be imperfect solutions to lowering LDL. Statins can cause neurologic side affects like memory loss and muscle weakness in some patients, and other patients are simply resistant to them. Additionally, statins can increase PCSK9 expression in some patients, counteracting their LDL lowering ability.
While the FDA has recently asked drug developers to start compiling data on neurological disorders that may be similar to those experienced by patients on statins, Amgen's AMG-145, or evolocumab, has posted solid results during trials. That has Amgen planning to file evolocumab for FDA approval later this year.
During phase 3 studies, more than 4,000 patients were treated with evolocumab, and on average, they saw their LDL drop significantly. In one study, evolocumab lowered LDL by 57% versus placebo. In another, matching up evolocumab with statin therapy lowered it by 75%.
Amgen is also studying the use of evolocumab alongside Merck's multi-billion dollar a year Zetia. Zetia is commonly dosed alongside statins to boast their effect, and Amgen has shown that using evolocumab with Zetia can have a dramatic LDL lowering effect versus using Zetia or evolocumab alone.
Regeneron and its development partner Sanofi (NASDAQ:SNY) are also working on their own PCSK9 drug, alirocumab. In studies, Regeneron and Sanofi report that alirocumab lowered LDL by 47% after 12 weeks.
Pfizer's RN316, or bococizumab, is another PCSK9 alternative that Pfizer thinks could prove very effective at tackling tough LDL, particularly in hard-to-treat patients. Bococizumab lowered LDL by 56% after 12 weeks during studies, and Pfizer kicked off a phase 3 trial last October.
Fool-worthy final thoughts
Last year, the American Heart Association recommended expanding the use of statins beyond those already showing signs of heart disease to those that may be at risk of developing heart disease based on factors like weight, age, and blood pressure. That is likely to signifciantly boost the patient population being prescribed LDL lowering drugs.
For now, the affect on spending by a bump in prescriptions won't be great, but if PCSK9 drugs become available, their ostensibly higher prices could blunt cost savings from the shift to generic statins, especially if the American Heart Associations' projection that roughly 40% of the population will suffer from some form of cardiovascular disease by 2030 prove correct.