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Letter on PCSK9 Value-Based Contracts Asks: When Are Discounts Applied?


Cardiologists were thrilled with results of the FOURIER trial, but payers were less moved. Given the drug's $14,000 a year price, some wanted to know if they would see more than the 30% to 35% discounts they had been offered.

In March, Amgen offered to repay the cost of its cholesterol-lowering drug, evolocumab, if a patient taking it had a heart attack or stroke. The offer came as researchers presented results of the FOURIER trial at the American College of Cardiology (ACC), which showed the drug reduced heart attacks by 27% and strokes by 21%, but did not cause a drop in cardiovascular (CV) death.

Now, a University of Pittsburgh researcher, Inmaculada Hernandez, PharmD, PhD, has calculated what Amgen’s offer is actually worth, based on what’s publicly known about discounts, as well as the number of patients taking evolocumab who can be expected to have an CV event.

In a research letter published last week in JAMA Internal Medicine, Hernandez writes that if the outcomes-based offer were applied to a population similar to the one in the FOURIER trial, payers would be refunded an amount equal to a 2.15% price cut across all patients. That would cut the price of the drug somewhat, but not to levels sought by a watchdog group.

At ACC, cardiologists were thrilled with the FOURIER results, but payers were less moved. More precisely, given the drug’s $14,000 list price, payers said they needed more than the 30% to 35% standard discount they were getting.

Evolocumab is 1 of 2 approved drugs called proprotein convertase subtilisin/kexin type 9 (PCKS9) inhibitors; these drugs work by blocking a key protein that prevents the removal of low-density lipoprotein (LDL) cholesterol particles. Trials showed PCSK9 inhibitors can reduce cholesterol by up to 60%, and blockbuster sales were predicted before their approval in 2015.

But payers and pharmacy benefit managers (PBMs) set up strict protocols for who could get the drugs while they waited for CV outcomes trials (only results for evolocumab have been reported). Physicians have complained that payer and PBM barriers are unfair and inconsistent.

Hernandez calculates that the 2.15% price cut translates into a final annual per-patient cost of $8904 based on “lifetime” treatment, which she defines as taking the drug for 15 years under an outcomes-based contract. A more likely scenario, she writes, is a refund based on 3 years of treatment, which would put the annual cost at $9061.

The letter points out realities of commercial coverage that offers few incentives to invest in expensive therapies when the savings will be realized long after the patient has moved on to another employer or Medicare. In an episode of care for a knee replacement, by contrast, there is a clear start and endpoint, so the savings are easier to define. As Hernandez notes, people frequently change health plans, so that it can be hard for the payer to realize the benefits of an outcomes-based contract if the person subsequently leaves their care. Conversely, if the person takes a PCSK9 inhibitor but switches payers and then has a heart attack, it is unlikely that a drug manufacturer’s outcome-based contract would capture the period before the insurer covered that patient.

There have been some outcomes-based contracts for PCSK9 inhibitors, notably between Amgen and Harvard-Pilgrim. In an interview, Hernandez said because details of value-based contracts are typically confidential, it’s not known precisely how large discounts are or when refunds kick in—but these details are key. “Some of these things are secrets of the trade,” she said.

In her paper, she writes, “For outcomes-based contracts to replace current discounts, manufacturers will have to bear an amount of risk that is at least financially comparable to current discounts.”

Estimating the cost-effectiveness of evolocumab is a tall order; Hernandez writes that some attempts do not square with the actual results in FOURIER. Those problems aside, Hernandez notes her calculation is still twice the annual price of 2 separate calculations that came in the range of $4250 to $4500. In 2015, the Institute of Clinical and Economic Review sparred with Amgen and the maker of a rival PCSK9 inhibitor when it said the drugs should cost between $3615 and $4811. More recently, ICER has said that the FOURIER results would cause their calculations to be revisited.

So far, Hernandez said, she has not heard negative feedback from any drug manufacturers about her calculation.


Hernandez I. Revisiting outcomes-based pricing propositions or the PCKS9 inhibitor evolocumab [published online August 7, 2017]. JAMA Intern Med. doi:10.1001/jamainternmed.2017.3143.

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