Price Of CF Drug Kalydeco Could Drop In Canada And Australia Under New Public Health Care Deals

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by Charles Moore |

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Kalydeco resubmission

Kalydeco resubmissionCanada’s CTV News reported late last week that the province of Alberta’s health minister has successfully negotiated a tentative deal that will allow Canadian provinces to cover the cost to their provincial pharmacare plans of the multiple sclerosis (MS) drug Kalydeco, used for treatment of cystic fibrosis (CF) in patients aged six years and older who have one of the following mutations in their CF gene: G551D, G1244E, G1349D, G178R, G551S, S1251N, S1255P, S549N, or S549R. Cost per year per patient for Kalydeco therapy in Canada is currently estimated at approximately Can$350,000 (about $320,000 US)

Cystic Fibrosis (CF), a devastating genetic disease most common in individuals of European descent, and the most common fatal genetic disease affecting North American children and young adults, affects approximately 75,000 people in North America, Europe and Australia, about 50,000 of whom are in the U.S. Currently, the median predicted age of survival for a person with CF is between 34 and 47 years, although the median age of death remains in the mid-20s. There is currently no cure.

According to the Website Cancer Treatment Meds, Kalydeco’s price according to Vertex Pharmaceuticals, is US$512.06 per pill, and that the main reason for this high cost is because Kalydeco is exclusively indicated to treat only the relatively small sub-minority of cystic fibrosis cases positive for one of the noted mutations. Cystic fibrosis is a hereditary disease that is not common, and its prevalence rate in general in the most vulnerable ethnic group, Caucasians, is just one in every 2,500 births. Consequently, since the prevalence of cystic fibrosis cases positive for the G551D mutation in the CFTR gene is very low, with only few cystic fibrosis patients eligible to use Kalydeco. The upshot is that because it is indicated only for treatment of an exclusive and small group of patients, the economies of scale associated with sales of more widely prescribed drugs don’t obtain with Kalydeco, making it expensive. Cancer Treatment Meds notes that another consequence of Kalydeco’s high price is that only few pharmacies are willing to have stocks of the medication, even in countries where it is approved for use.

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CF is caused by a defective or missing transmembrane conductane regulator (CFTR) proteins resulting from mutations in the CFTR gene. Children must inherit two defective CFTR genes — one from each parent — to develop CF. There are more than 1,900 known mutations in the CFTR gene. Some of these mutations, which can be determined by a genetic, or genotyping test, lead to CF by creating non-working or too few CFTR proteins at the cell surface. The defective function or absence of CFTR proteins in people with CF results in poor flow of salt and water into and out of the cell in a number of organs, including the lungs. This leads to the buildup of abnormally thick, sticky mucus that can cause chronic lung infections and progressive lung damage.

A combination of a CFTR corrector (VX-661) and Kalydeco further enhanced CFTR function in human bronchial epithelial (HBE) cells heterozygous for the F508del and G551D mutations. The company says the clinical results announced May 1 demonstrate potential for a combination of VX-661 and Kalydeco to further enhance the benefit of treatment with Kalydeco alone in people with the F508D mutation and a mutation known to respond to Kalydeco. If approved for marketing, VX-661 would be the second drug from Vertex that works by targeting the underlying genetic cause of cystic fibrosis.

In people with the G551D mutation of CF ages six and older, Kalydeco helps improve lung function and lower sweat chloride levels and helps patients gain weight — all key indicators that the drug is working. In people with this mutation, the defective protein moves to the right place at the surface of the cell but does not function correctly. Instead, it acts like a locked gate, preventing the proper flow of salt and fluids in and out of the cell. Kalydeco helps unlock that gate and restore the CFTR protein’s function. This allows for a proper flow of salt and fluids on the surface of the lungs, which helps to thin the thick, sticky mucus caused by CF that builds up in the lungs.

According to the advocacy organization Cystic Fibrosis Canada (CFC), one of the world’s top three charitable organizations committed to finding a cure for cystic fibrosis and an internationally-recognized leader in funding CF research, innovation, and clinical care, CF is the most common fatal genetic disease among Canadian children and young adults, affecting some 4,000 individuals directly. It is estimated that about 100 CF patients in Canada carry the specific G551D mutation of the CFTR gene that makes CF treatable with Kalydeco, according to the Canadian CF Registry. When taken twice a day with fat-containing food, Kalydeco helps the protein made by the CFTR gene function better, improving lung function and weight gain. As about 118 Canadians would be eligible for Kalydeco treatment if it was covered by provincial health insurance plans. Both the governments and the manufacturer want patients to have access to Kalydeco.

Kalydeco has been available to patients in the United States through private insurance or state Medicaid plans since 2012, and In 2013, England, Scotland, Ireland and Northern Ireland started funding Kalydeco for use by their patients. Kalydeco was approved by the European Medicines Agency in July 2012, by Health Canada in November 2012 and by the Therapeutic Goods Administration in Australia in July 2013 for use in people with CF ages 6 and older who have at least one copy of the G551D mutation in the CFTR gene. Kalydeco is also currently available in France, Germany, the Netherlands, Austria, Denmark, Sweden, Norway, Greece and Italy.

Cystic Fibrosis Canada’s Vice President for Advocacy, Research and Healthcare Ken Chan reported May 30 that Kalydeco was a line item on the agenda at a meeting of senior Canadian provincial health officials last week, and CFC has learned that significant progress on Kalydeco pricing was made through the pan Canadian pricing alliance process.

The Pan-Canadian Pricing Alliance (PCPA), established in August 2010, is part of work underway by the Canadian Council of the Federation’s Health Care Innovation Working Group (HCIWG).

Currently led by the provinces of Ontario and Nova Scotia, the PCPA conducts joint provincial/territorial negotiations for brand name drugs in Canada in order to achieve greater value for publicly funded drug programs and patients. All brand name drugs coming forward for funding through the national review processes Common Drug Review (CDR) or Pan-Canadian Oncology Drug Review (pCODR) are now considered for negotiation through the PCPA.

By capitalizing on the combined “buying power” of drug plans across multiple provinces and territories, the PCPA aims to achieve lower drug costs and consistent pricing, increase access to drug treatment options, and improve consistency of coverage criteria across Canada. As a result of the completed joint negotiations on nine initial drug products, there has been an estimated $50 million in drug expenditures avoided annually, and in July 2013, the HCIWG gave direction to further develop work on obtaining better value and pricing for brand name drug products.

In 2013, Ontario, on behalf of all participating provinces and territories, retained IBM Canada Ltd through a competitive process to provide independent advice on the development of a governance model to support pan-Canadian negotiations. This advice will be used to help form a national strategy informed by a global environmental scan and broad stakeholder consultations including patient groups, pharmaceutical manufacturers and participating provinces and territories, for both brand and generic drugs and to inform future pan-Canadian drug project activities.

Mr. Chan says that in coming weeks, CFC expects the provinces pursuant to negotiations between Vertex Pharmaceuticals — the company that produces Kalydeco — and Alberta Health acting as the lead for negotiations on behalf of provinces participating in the PCPA, to finalize an agreement with Vertex in writing, and says that until then, the organization continues to remain optimistic that a deal between the parties is within reach. In terms of next steps, he says that each province will be making its own decision on how and when to fund Kalydeco once a price agreement is in place.

The Canadian public broadcaster CBC News also reports that the province of Nova Scotia says it has reached a tentative agreement with Vertex.

The Australian public broadcasting service ABC’s Sophie Scott and Alison Branley reported on April 28 that the country’s Pharmaceutical Benefits Advisory Committee (PBAC) — an independent expert body of doctors, health professionals, health economists and consumer representatives appointed by the Australian Government whose primary role is to recommend new medicines for listing on the Pharmaceutical Benefits Scheme (PBS) — an Australian Government program that provides subsidized prescription drugs to residents of Australia, had handed down recommendations on two controversial drugs, one being Kalydeco. No new medicine can be listed on the PBS unless the committee makes a positive recommendation.

When recommending a medicine for listing, the PBAC takes into account the medical conditions for which the medicine was registered for use in Australia, its clinical effectiveness, safety and cost-effectiveness (‘value for money’) compared with other treatments. Drug companies can be forced to give the Federal Government full refunds in cases where their medicines do not work. Under the pay-for-performance model, patients will be taken off expensive medications if they are not seen to be responding to the treatment under criteria set by the PBAC to monitor and evaluate effectiveness — a departure from the usual policy of paying for prescription medicines regardless of outcomes, that has only been invoked once before. People who are very sick would be excluded from treatment, and patients showing only mild improvement or a slight improvement in quality of life would be discontinued.

The ABC report notes that under the PBAC recommendations, drug makers will not be allowed to charge the government more than original estimates and must undertake continuous clinical research. These proposed new provisions iOS be expected to roughly halve the number of Australians eligible for treatment. Ms. Scott and Ms. Branley report that Kalydeco, which costs some $300,000 per year per patient, could help about 200 Australians with CF, and that conditions of the PBAC recommendation UK’s prevent patients who could benefit from Kalydeco from being able to get the drug,and patient advocacy groups are urging the Australian government to reject the PBAC’s recommendation.

Kalydeco was developed by Vertex Pharmaceuticals Inc. with significant scientific, clinical and financial support including a $75 million investment from the Bethesda, Md. based Cystic Fibrosis Foundation, a nonprofit donor-supported organization dedicated to attacking cystic fibrosis from every angle. The CF Foundation’s focus is to support development of new drugs to fight the disease, improve the quality of life for those with CF, and ultimately to find a cure. It is the world’s leader in the search for a cure for cystic fibrosis, and funds more CF research than any other organization.

Vertex initiated its CF research program in 1998 as part of a collaboration with Cystic Fibrosis Foundation Therapeutics, Inc. (CFFT) — the nonprofit drug discovery and development affiliate of the Cystic Fibrosis Foundation. This collaboration was expanded to support the accelerated discovery and development of Vertex’s CFTR modulators. The CF Foundation is a donor-supported nonprofit organization. For more information, visit:

Vertex Pharmaceuticals Inc.
Cystic Fibrosis Canada
Cystic Fibrosis Foundation
Canadian CF Registry
The Pan-Canadian Pricing Alliance
Cancer Treatment Meds
CTV News
CBC News
ABC (Australia)
Pharmaceutical Benefits Advisory Committee (Australia)
Pharmaceutical Benefits Scheme (Australia)