Amgen Cuts Cholesterol Drug’s Price 60% After Weak Sales

(Bloomberg) -- Amgen Inc. plans to cut the cost of its marquee cholesterol fighter after many patients struggled to afford it, and as drugmakers face increased scrutiny of their pricing practices.

The Thousand Oaks, California-based biotechnology giant said on Wednesday that it will lower the U.S. list price of the drug, called Repatha, from more than $14,000 a year to $5,850, a reduction of roughly 60 percent. Amgen said its primary goal is to expand use by reducing out-of-pocket costs for Medicare patients.

Repatha is part of a class of injectable medications intended to reduce complications of high cholesterol including heart attack and stroke. The drugs, called PCSK-9 inhibitors, are meant to be taken indefinitely. The steep price has resulted in far slower adoption than expected for what once thought to be a sure-fire blockbuster.

“Up to 75 percent of Medicare patients who are given a prescription for a PCSK-9 inhibitor are leaving the pharmacy without a prescription,” said David Reese, Amgen’s newly appointed head of research and development. Reese said patients often abandon their prescriptions when they get to the pharmacy and are confronted by high costs.

The move follows a series of steps by the Trump administration designed to rein in rising prescription-drug prices. The White House wants to increase transparency around how much drugs cost and lower the financial burdens faced by patients. President Donald Trump is scheduled to appear on Thursday at the Department of Health and Human Services with Secretary Alex Azar, who has been his point person in the effort to lower prices.

Amgen shares fell 1 percent to $186 in late trading in New York, after dropping 4.9 percent during regular trading as broader markets sold off.

Rivals’ Steps

The cut in Repatha’s prices follows a cost decrease earlier this year for the drug’s main competitor, Praluent. In May, Regeneron Pharmaceuticals Inc. and Sanofi lowered the price of its drug to spur use.

In studies, both medications failed to reduce heart complications associated with cholesterol as dramatically as was anticipated. In one study last year, Repatha reduced a combined measure of cardiac ailments by 15 percent, though analysts had estimated it might take as much as double that rate of improvement for insurers to embrace the drug more broadly. At the time, analysts suggested the company may need to lower the drug’s price.

Amgen is scheduled to report its third-quarter financial results next week. In the second quarter, revenue from Repatha was $148 million, beating estimates, but falling short of the blockbuster annual pace analysts once predicted.

Reducing the list price of the drug will likely have the largest impact on patients on Medicare, who often pay a direct percentage of the drug price. Medicare patients accounted for more than 40 percent of Repatha prescriptions in 2017 and so far in 2018, according to data compiled by Bloomberg Intelligence.

“The impact we’re trying to have is on high-risk patients, and about 65 percent of those are on a Medicare plan,” said Murdo Gordon, Amgen’s new executive vice president of global commercial operations.

The company said the most popular form of the newly priced Repatha will be available tomorrow under a new product code.

“Cardiovascular disease remains our number one public-health problem,” said Reese.
“Our goal is to get transformative medicines into the hands of patients that need them.”

--With assistance from Robert Langreth.

To contact the reporter on this story: Kristen V. Brown in San Francisco at kbrown340@bloomberg.net

To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, Timothy Annett

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