NASH New Drug Launch Imminent, Payers May Be the Biggest Obstacle

Liver specialists across the United States are noticing a shift in their clinic populations. From Rochester, New York, to Plano, Texas, more patients are arriving with a disease they have never heard of. "I keep hearing the story: 'I don't drink, why is this happening to me?'" said Brent Tetri, a liver specialist in St. Louis.

These patients have NASH, or nonalcoholic steatohepatitis, a liver disease caused by fat buildup rather than viruses or heavy drinking. No NASH drugs are on the market yet, but the first ones could arrive within the next few years.

Based on Wall Street forecasts and clinical data disclosed so far, the earliest drugs may have limited effectiveness and could cost $10,000 or more per year. This has raised concerns among payers, and healthcare providers expect that most of the estimated 10 million to 30 million NASH patients in the U.S. will face barriers to drug coverage.

"Payers will hesitate and try to strictly screen who we can prescribe to," Tetri told BioPharma Dive.

Covering only the sickest patients

Doctors, analysts, and industry executives expect that in the emerging NASH market, patients with the most severe liver fibrosis will be most likely to receive insurance coverage and reimbursement. Research shows that only a minority of NASH patients progress to advanced fibrosis, and payers could save significant costs through this strategy.

For example, a 2015meta-analysisincluded studies of adults with NASH or the more general fatty liver disease. Among 411 patients, the analysis determined that 15% were in the two highest stages of fibrosis, while nearly 70% were in the two lowest stages.

Data on the NASH population is far from definitive, because the best way to define liver inflammation and scarring remainsliver biopsy. The procedure is invasive and relatively expensive, and there are not enough liver specialists to perform them—a tricky combination for patients who want or could benefit from drug treatment.

"If insurers want to create barriers to accessing these drugs, they will require a biopsy," said Manal Abdelmalek, a professor of medicine at Duke University.

Liver biopsy is just one barrier payers could set up. Another is that diet and exercise are actually quite effective at slowing or even reversing fibrosis. "If someone can lose 10% of their excess body weight, that has a huge impact on the liver," said Kymberly Watt, a gastroenterologist at the Mayo Clinic in Rochester.

The effectiveness of lifestyle changes gives payers another reason not to cover expensive NASH drugs unless patients are at high risk of developing cirrhosis and needing a liver transplant. This is especially true when drugs show questionable or mixed efficacy in clinical trials, as is the case with all the most advanced candidates in the field.

"When a treatment is comparable or worse than diet and exercise, it will be extremely challenging to get payers to cover it. It's a hard sell," Abdelmalek said.

Intercept Pharmaceuticals is the only drugmaker to have achieved positive results in late-stage NASH trials, but even that study found that after 18 months of treatment with its drug obeticholic acid, 75% of patients did not show significant fibrosis improvement without NASH worsening.

Obeticholic acid is actually already on the market, sold under the brand name Ocaliva for another liver disease called primary biliary cirrhosis. In that indication, Ocaliva's list price is nearly $70,000.

At least two investment banks expect Intercept to significantly lower the drug's pricing in NASH—Steven Seedhouse of Raymond James models a gross list price of around $10,000, while Credit Suisse analysts expect a higher $18,000. Still, compared to diet and exercise, such costs may be unattractive to payers.

However, lifestyle changes are not always easy for people to maintain. Abdullah Mubarak, a gastroenterologist at the Texas Liver Center, said only about one in ten of his NASH patients can lose weight and keep it off for more than a year or two. According to other doctors interviewed by BioPharma Dive, that rate is fairly common.

Where patients live and their income levels also greatly affect their access to gyms or nutritious food. Payers typically do not help cover such costs.

"Insurance severely limits patients' access to dietitians, gym memberships, and personal trainers," said Zachary Henry, a liver specialist at the University of Virginia Health System. "So for patients, taking a pill may ultimately be cheaper than doing the things that could be better for them in the long run."

Another hepatitis C market?

Taken together, coverage and reimbursement decisions will likely come down to price.

Even three years ago, the drug cost watchdog Institute for Clinical and Economic Review (ICER) hadexpressed concerns about the potential budget impact of Ocaliva if approved for NASH. At the drug's annual list price of $69,350 and assuming an "unmanaged" adoption rate, ICER predicted that if just 10% of diagnosed patients received treatment, it would create a substantial budget impact.

ICER's analysis supports the view that if NASH drugs are expensive, they would need high efficacy and tolerable side effects to justify the additional cost.

Conversely, if NASH drugs are cheap, they could gain payer approval as long as they have marginal health benefits. But even then, manufacturers may still have trouble easing price concerns.

Pasha Sarraf, an analyst at SVB Leerink, said payers worry that the NASH drug market will evolve in a way similar to hepatitis C.

In hepatitis C, doctors had delayed prescribing older, less effective therapies while waiting for Gilead's Sovaldi to be approved. That drug was essentially curative, which was reflected in its high price. After its approval in December 2012, prescriptions surged—and payer costs rose rapidly.

A few years later, a new class of drugs for millions of patients with high cholesterol received a very different reception. That class, called PCSK9 inhibitors, saw two treatments reach the U.S. market, but both faced strong pushback from payers over their price tags.

"In the subsequent PCSK9 experience, payers were ready, prepared, and absolutely hostile to drugmakers pushing those drugs to a broad population," Sarraf said.

At least one major payer has already shown wariness toward NASH drugs.

"To date, reported clinical results have been either mixed, modest in efficacy, or have failed to meet trial endpoints," CVS Health said in an emailed statement to BioPharma Dive. "Additionally, some investigational compounds have shown tolerability issues and other side effects that could limit treatment."

CVS Health did note that NASH drugs with a favorable risk-benefit profile "would make an important contribution to improving patient care." However, the company said it is premature to discuss the potential impact of pricing due to the lack of FDA-approved therapies.

As NASH drugs head to market, pricing pressure from payers and rival drugmakers is sure to emerge. The dozens of candidates in mid- and late-stage trials suggest that competition will intensify quickly after the first few drugs are approved.

"Prices won't stay expensive for long because there are so many competitors now basically at the same level," said Watt of the Mayo Clinic.