Opdivo Faces 23.8% Price Cut as Slew of Reduction Rules Apply; Nexium Down 16.1% on Huge Seller Slash

Ono Pharmaceutical’s PD-1 inhibitor Opdivo (nivolumab) will see its price axed by 23.8% in April as it faces a series of price reduction rules including a new post-launch foreign price adjustment and a cut under an ongoing pilot program for a Japanese version of cost-effective assessments (CEAs).

Announcing new NHI prices from April 2018, the Ministry of Health, Labor and Welfare (MHLW) on March 5 also revealed the rate of price reductions for a previously announced list of drugs that will be subject to special re-pricing rules - that is, “market expansion” re-pricing, “special expansion” re-pricing, and “dosage and administration change” re-pricing (see List).

Opdivo, which was among the roster unveiled on January 17, will face the “dosage/administration change” re-pricing rule as its dosage was changed when it added a lung cancer indication in 2015 to its initial use in melanoma.

Although the immuno-oncology med went through an emergency price slash of a staggering 50% in February last year, its re-pricing was carried out by using its initial price - or a price before the 50% cut - as the baseline. Before the application of this dosage/administration change re-pricing rule, a regular market price-based revision was conducted on the drug, which then earned a post-launch premium for adding an orphan indication (relapsed/refractory classical Hodgkin’s lymphoma). Then, the dosage/administration change rule was applied so that Opdivo would have the same daily NHI price before and after the dosing change. After this re-pricing, the drug then became subject to a downward adjustment based on the average of corresponding prices in other major countries, and then its price was further pulled down through an adjustment under a pilot CEA scheme, which covers seven drugs and six medical devices including Opdivo. As a result, compared to the current NHI prices (the price after the 50% emergency slash), the prices of Opdivo’s 20 mg and 100 mg versions were pared by 23.8%.

Meanwhile, MSD’s PD-1 inhibitor Keytruda (pembrolizumab) and Merck Serono/Pfizer’s PD-L1 inhibitor Bavencio (avelumab), which were initially priced by referring to the Opdivo price, were also caught by the dosage/administration change rule as they have similar pharmacological profiles. However, they were only subject to the market price-based price revision and this re-pricing rule, without foreign price- and CEA-based adjustments. The prices of Keytruda’s 20 mg and 100 mg versions will be cut 11.1% and 11.2%, while Bavencio 200 mg will see an 11.9% reduction.

Meanwhile, AstraZeneca’s acid reflux drug Nexium (esomeprazole) will be slapped with a price slash of 16.1% under the “special expansion” re-pricing rule, also dubbed “huge-seller” re-pricing.

The huge-seller re-pricing pares NHI prices by up to 25% if products post annual sales of 100-150 billion yen that are at least 1.5 times their sales projections, and up to 50% if they record annual sales exceeding 150 billion yen and at least 1.3 times their sales outlooks.

Nexium became subject to the re-pricing rule because it fell under the 100-150 billion yen/1.5-fold condition. Its rival Takecab (vonoprazan) by Takeda Pharmaceutical will also face a 16.1% reduction under the rule as it has a similar pharmacological profile, with its initial listing price set by referring to the AZ drug as one of its comparator products.

Rituxan Price Down 26.2%

In the meantime, nine brands (19 products) will face price cuts under the market expansion re-pricing. The price reduction rate under this rule is up to 25% for products priced by the cost calculation method for their initial listing, and up to 15% for products priced by the comparator method. Of the nine brands, Shionogi’s Cymbalta (duloxetine) and Sumitomo Dainippon Pharma’s Trerief (zonisamide) were priced by the comparator method, and the other seven by the cost calculation method.

For Zenyaku Kogyo/Chugai Pharmaceutical’s Rituxan (rituximab), the rate of re-pricing was eased thanks to a correction premium of 5% for its addition of an orphan indication (the prevention of antibody-mediated rejection of ABO-incompatible kidney and liver transplants). On top of the market expansion re-pricing, however, Rituxan is also subject to a one-time payback of its previously granted price maintenance premium (PMP) due to a biosimilar launch, bringing down its price by 26.2%. Sandoz/Kyowa Kirin’s Rituxan biosimilar, which was launched on January 18, was also taken along to fall victim to the re-pricing rule, but the reduction rate will be softer with no reduction tied to the PMP payback applied.

Elsewhere, Novartis Pharma’s Afinitor (everolimus) and Nippon Shinyaku’s Vidaza (azacitidine) will face reductions of 23.2% and 18.4%, while GlaxoSmithKline’s Botox (botulinum toxin type A), MSD’s Bridion (sugammadex), and Mylan EPD’s Amitiza (lubiprostone) will see their prices shaved by 17.7%, 13.3%, and 23.6%, respectively.

The re-pricing rate of Novartis’ Revolade (eltrombopag) was softened to 7.1% thanks to a correction premium for its orphan indication addition (aplastic anemia).

As to Cymbalta and Trerief, which were priced by the comparator method for initial listing, they will face a reduction of 14.4% and 15%, respectively.