[Editor’s View] The key to Xofluza pricing negotiation

A novel breakthrough influenza treatment Xofluza (baloxavir) by Roche is in a deadlock.

 

Due to COVID-19 pandemic and conditional non-reimbursement status, the flu drug is struggling with the sales dip and marketing.

 

Even before the launch, the drug was expected to easily take over Tamiflu’s market with significantly improved administration convenience, but it only generated maximum 100 million won last year.

 

IQVIA projects the drug’s quarterly sales marked 360,000 won, 1.4 million won, 29 million won and 50 million won in last first quarter through the fourth.

 

The market experts point out the sales were disappointing last year, presumably because the influenza patient size plummeted last year due to the strict mask-wearing order given amid COVID-19 pandemic.

 

The argument is supported by a household name Type A influenza treatment Tamiflu (oseltamivir) barely making 3.5 billion won last year.

 

Moreover, Roche’s strategy to launch the new flu drug without the healthcare coverage in last March also seems to have backfired on the limited patient access.

 

The non-reimbursed Xofluza cost ranges from 70,000 won to 75,000 won.

 

Pushing aside the unexpected COVID-19 pandemic factor, the product launch without the reimbursement greatly hindered the drug from absorbing the market share.

 

The drug sales plateaued already from the point of receiving the coverage with evidence development from the first reimbursement listing threshold, the Health Insurance Review and Assessment Service (HIRA) Drug Reimbursement Evaluation Committee (DREC).

 

The coverage with evidence development means the applicant company may start the projected claim amount negotiation with the National Health Insurance Service (NHIS) after accepting the pricing lower than HIRA’s evaluated pricing.

 

However, Roche stated it would not accept the pricing suggested by the government agency.

 

The industry suspects HIRA suggested a reimbursed pricing of around 20,000 won to 30,000 won for Xofluza, whereas the company offered a range of 45,000 won to 60,000 won.

 

In other countries, where the drug is approved, it is priced at USD 90 (99,152 won) in the U.S.

 

for both 20 mg and 40 mg, and also at JPY 1,535.4 (16,349 won) and 2,348.8 yen (25,961 won) for 10 mg and 20 mg, respectively in Japan.

 

Based on the global pricing and weighted average pricing, Roche would highly unlikely to accept the pricing below 50,000 won for the healthcare reimbursement.

 

Even if the company takes the pricing under 50,000 won, it would cause confusion among the A7 and other countries complain.

 

The key to Xofluza’s pricing negotiation is in the pharmacoeconomic evaluation.

 

In other words, Roche would have to convince and make HIRA understand how much of economic efficiency Xofluza can achieve compared to Tamiflu.

 

75 mg of Tamiflu is priced at 1,662 won in South Korea with the healthcare coverage.

 

It would cost 16,620 won when taking two capsules daily for five days.

 

Meanwhile, 40 mg of Xofluza could alleviate the symptoms of influenza with a single dose.

 

Basically, one capsule of Xofluza can replace 10 capsules of Tamiflu.

 

The key outcomes of CAPSTONE-1 with healthy adult and adolescent patients aged 12 to 64 years found Xofluza’s median time to symptom alleviation was 26.5 hours faster than the placebo.

 

Also, Xofluza showed faster virus shredding than placebo.

 

In about 24.0 hours, Xofluza halved the viral shedding, which was significantly shorter than placebo (96.0 hours) and Tamiflu (72.0 hours).

 

During the CAPSTONE-2 study with high-risk influenza patient groups including senior and chronic disease patients, the high-risk patient group treated with Xofluza demonstrated median symptom alleviation time of 73.2 hours, which was about 29 hours faster than the placebo group (102.3 hours).

 

In the same study, Xofluza halved the viral shedding in 48.0 hours, improved by approximately 50 percent than the placebo (96.0 hours) and oseltamivir (96.0 hours).

 

In short, Xofluza can treat and alleviate the influenza symptoms about one to two days faster than Tamiflu.

 

Also the vastly improved administration convenience to replace 10 capsules for five days with one single dose is great news for those who have dysdipsia.

 

Now for the pricing negotiation, it is up to Roche to persuade and HIRA to acknowledge how much of economic value a 24-hour-faster recovery can make for a working person making 100,000 to 300,000 won a day.