Is the Price Right? Pricing Evaluation of VYXEOS™ versus component liposomal Daunorubicin and Cytarabine

On August 3, 2017 the Food and Drug Administration approved a liposome-encapsulated combination of daunorubicin and cytarabine (VYXEOS™, Jazz Pharmaceuticals, Inc.) for the treatment of adults with newly-diagnosed therapy-related acute myeloid leukemia (t-AML) or AML with myelodysplasia-related changes (AML-MRC), which are two types of AML having a poor prognosis. VYXEOS is the first agent that has been approved under the orphan designation for the treatment of t-AML and AML-MRC.

VYXEOS is a combination of two older chemotherapy products, which served as a comparison group in the pivotal study in the drug’s approval. Cytarabine is available as both a liposomal formulation (DepoCyt, Sigma-Tau) and non-liposomal formulation (available generically through multiple manufacturers). Daunorubicin was available as a liposomal formulation (DaunoXome®, Galen) until April 2016, when it was withdrawn from the market in the United States due to manufacturing issues.1

Within the VYXEOS’s study which demonstrated that it was superior to a regimen that consisted of daunorubicin and cytarabine given separately, it was not specified whether the comparator products were the standard or liposomal formulations. It can be assumed that based on the dosing regimen that the comparator group utilized the non-liposomal formulations (cytarabine administered for days 1 through 7 and daunorubicin on days 1, 2, and 3), as this dosing regimen is in alignment with non-liposomal dosing recommendations.2,3

Due to the increasing scrutiny around drug pricing, the approval of VYXEOS and the historical availability of both constituent products as liposomal formulations, we evaluated the potential price difference between Vyxeos and the individual liposomal components, if both were still available.

Prior to comparing the price differences, we projected the potential price for DaunoXome had it remained on the market. Utilizing our historical pricing data and comprehensive NDC crosswalk, we pulled wholesale acquisition cost (WAC) for both DaunoXome and DepoCyt utilizing the product’s HCPCS code (table 1). Based on our data the WAC per HCPCS unit for DepoCyt as of February 2017, was $592.80 (figure 1), and the total WAC per vial was $2,964.00. DaunoXome’s last pricing update occurred in May of 2014 at $230.00. Utilizing a linear model and historical pricing, we calculated a project WAC price per HCPCS units in 2017 of $231.34 (figure 2), which translated to $1,156.72 per vial.

Table 1 – Daunorubicin and cytarabine liposomal HCPCS code and definitions

Drug NameHCPCS CodeHCPCS Descriptor
DaunoXomeJ9151Injection, daunorubicin citrate, liposomal formulation, 10 mg
DepoCytJ9098Injection, cytarabine liposome, 10 mg


Figure 1- liposomal cytarabine historical pricing based on RJ Health Systems dataFigure 1- liposomal cytarabine historical pricing based on RJ Health Systems data

Figure 2- liposomal daunorubicin historical pricing based on RJ Health Systems dataFigure 2- liposomal daunorubicin historical pricing based on RJ Health Systems data

For VYXEOS we utilized a preliminary WAC price that was published by the manufacturer on August 3, 2017 at $7,750 per vial.4

Utilizing this pricing we were then able to calculate the potential price for the treatment of AML.  Per VYXEOS’s package insert the dosing is dependent on individual patient responses to treatment.  As such there are five potential regimens (table 2). Calculating the price per cycle for VYXEOS and the individual liposomal products required an assumption that dosing would be consistent across the products and an average body surface area reported by the manufacturer for the clinical trials of 1.9 m2 was consistent across the population with this diagnosis.4 With these assumptions, the next step was to calculate the resulting doses for each of the five potential treatment cycle combinations, converting the doses to vials of the respective products and determining costs.  VYXEOS is available as a single dose vial and as such we assumed that physicians would bill in full vial increments. Table 3 shows the five potential dosing regimens based on number of induction and consolidation cycles, resulting price, and difference in estimated costs.

Table 2- VYXEOS package insert recommended dosing5

CycleDosingNotes
First Induction daunorubicin 44 mg/m2 and cytarabine 100 mg/m2 liposome days 1, 3 and 5
Second Inductiondaunorubicin 44 mg/m2 and cytarabine 100 mg/m2 liposome days 1 and 3 Only administered if patient fails to achieve response after first induction cycle
Consolidation daunorubicin 29 mg/m2 and cytarabine 65 mg/m2 liposome days 1 and 3 A second consolidation cycle is administered in patients who do not show disease progression or unacceptable toxicity to VYXEOS

Table 3 – Treatment cost for VYXEOS and DaunoXome/DepoCyt treatment cycles and cost difference

Regimen NumberNumber of Induction CyclesNumber of Consolidation CyclesCost for VYXEOSCost for DaunoXome and DepoCytCost Difference
110$46,500$42,508$3,992
211$69,750$60,798$8,952
321$100,750$89,137$11,613
412$93,000$79,088$13,911
522$124,000$107,427$16,573

To finalize our analysis, we further wanted to understand what this difference in price could potentially mean to a health plan with a certain cohort of patients who would be treated for t-AML or AML-MRC. Utilizing published data from the manufacturer, the National Cancer Institute, and United States Census Bureau the estimated percentage of the population that are candidates for treatment was determined (table 4).
Table 4 – Estimated treatment candidate population

  Percent of US Population
Total US population (August 15, 2017)325,664,790
Total Patients diagnosed with AML21,3800.0066%
AML patients treated, who are not in clinical trials8,5000.0026%

Based on this data we estimated the potential number of patients per 1 million covered lives that would be candidates and the cost impact. Our analysis estimated that a plan could expect up to 26 members to be treated for AML with an associated spend range of $0.01 to $0.04 PMPM (table 5). This estimate does not account for patients receiving other therapies for AML, but is more of a worst-case scenario, assuming the plan does not adversely select for those diagnosed with AML.

Regimen NumberTotal Spend for VYXEOS Per 1 million covered livesTotal Spend for DaunoXome and DepoCyt Per 1 million covered livesSpend DifferencePMPM Spend
1$1,209,000$1,105,216$103,784$0.01
2$1,813,500$1,580,759$232,741$0.02
3$2,619,500$2,317,570$301,930$0.03
4$2,418,000$2,056,303$361,697$0.03
5$3,224,000$2,793,114$430,886$0.04

The result of our price comparison shows a modestly higher cost between VYXEOS and the component liposomal formulations. At face value, the product appears to be priced comparatively to the component products. A small premium is recognized which can be justified by both the orphan designation of the product, the lack of availability of DaunoXome on the market, and the potential reduction in administration costs due to the combined formulation. Finally, it is unknown whether the combined liposomal formulation affords a therapeutic advantage to VYXEOS over the individual liposomal components.

 


References:
1. Shales, Andrew D. (General Manager, Galen US Inc). Letter to: DaunoXome® Customer. 2016 Mar 17. Available at: http://www.galen.co.uk/uploads/documents/2016/06/2016-06-02_15-30-48-daunoxome-letter-1.pdf
2. Cytarabine Injection [package insert]. New York, NY: Pfizer Inc; 2011. Available at: http://www.pfizer.com/files/products/uspi_cytarabine_1000mg.pdf
3. Daunorubicin Hydrochloride Injection [package insert]. Bedford, OH: Bedford Laboratories; 2013: Available to: http://docs.boehringer-ingelheim.com/Prescribing%20Information/PIs/Ben%20Venue_Bedford%20Labs/55390-108-01%20DNOP_AQ%2020mg/5539010801
4. VYXEOS™ daunorubicin and cytarabine liposome for injection Investor Reference Materials [PowerPoint presentation]. Palo Alto, CA: Jazz Pharmaceuticals, Inc; 2017 Aug 03. Available at: http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzg0ODUwfENoaWxkSUQ9LTF8VHlwZT0z&t=1&cb=636372311663113419
5. VYXEOS™ (daunorubicin and cytarabine) liposome for injection [package insert]. Palo Alto, CA: Jazz Pharmaceuticals, Inc; 2017. Available at: https://www.accessdata.fda.gov/drugsatfda_docs/label/2017/209401s000lbl.pdf