Amgen's pending oncologic panitumumab will be priced between Genentech's Avastin and Bristol-Myers Squibb/ImClone's Erbitux , Exec VP-Commercial Operations George Morrow said.

"We don't know how we will price panitumumab yet - we don't have enough clinical data - but I can tell you that the bookends are really the Avastin price, which is $4,400 a month, and the Erbitux price, which is $10,000 a month," Morrow said during Amgen's annual business review Jan. 26.

Amgen gained full rights to panitumumab in December via its acquisition of development partner Abgenix; the company initiated a rolling BLA for the epidermal growth factor receptor inhibitor in third-line treatment of colorectal cancer soon after (¹ Also see "Amgen’s Busy Week: Firm Acquires Panitumumab Partner Abgenix, Starts BLA" - Pink Sheet, 19 December, 2005., p. 24).

Morrow said the "key issue" in establishing panitumumab's price is determining "the elasticity between $4,400 and $10,000 and what the elasticity is with regard to patient access and copays."

Oncologic pricing has come under scrutiny in recent years; the high prices of Erbitux and Avastin prompted calls from oncologists for price controls (² Also see "Colorectal Cancer Drug Costs May Force Rationing – ASCO Presentation" - Pink Sheet, 14 June, 2004., p. 5).

GlaxoSmithKline has maintained that targeted oncologics will be able to sustain high prices so long as they clearly demonstrate benefit (³ Also see "Targeted Oncologics Will Sustain High Prices With Clear Benefits, GSK Says" - Pink Sheet, 5 December, 2005., p. 8).

Amgen plans to conduct "rigorous" discussions with oncologists and payers concerning pricing, Morrow said. The company will try to determine what utilization constraints payers would put on the product at $10,000 versus $4,400 and whether different pricing schemes will create more or less goodwill among oncologists, he said.

Morrow noted that the change in Medicare Part B's reimbursement methodology to average sales price plus 6% has also made oncologic pricing more difficult.

Under the previous average wholesale price-based reimbursement methodology, manufacturers had leeway to increase provider reimbursement without increasing pricing; however, with the new 106% of ASP methodology, the only way for firms to increase physician reimbursement is by increasing pricing (⁴ Also see "Average Sales Price Final Rule Includes PhRMA’s Estimation Method" - Pink Sheet, 20 September, 2004., p. 14).

"ASP is sort of a Catch-22," he explained, "the higher the price, the higher the plus six." Under ASP, the question is "will cost recovery or cost to the patient in the system be the determining factor?" he said.

The strength of Amgen's clinical data for panitumumab will also be a major factor in determining pricing, Morrow said.

"If we think we are going to be front-line therapy in a lot of tumors, that may cause us to price this product quite differently than if we are really going to be salvage-type therapy," he said.

Upon announcing the Abgenix acquisition, Amgen forecasted peak-year sales of panitumumab of $2 bil. During the Jan. 26 meeting, Morrow characterized the $2 bil. estimate as "conservative," noting that the firm included a relatively modest price in the model.

The model's assumption that panitumumab would achieve no greater than a 50% share in any market was also conservative, he said. Based on discussions with physicians and pharmacists, "I would be very surprised and disappointed if we didn't exceed 50% market share based on the way they reacted to our profile," Morrow added.

The physicians and pharmacists identified the potential for panitumumab to be active in both EGFR-positive and -negative patients and the agent's biweekly dosing regimen as key advantages, Morrow said.

"The fact that it looks like we work in EGFR-positive and -negative [patients] is a big deal, particularly if we can avoid getting that in the label," he said. "Right now a lot of payers will use EGFR testing to prevent patients from getting onto the product," he added.

Labeling for Genentech/OSI's anti-EGFR agent Tarceva (erlotinib) states that EGFR patients were associated with a survival advantage in clinical trials (⁵ [A#00660480002], p. 4).

Morrow said that oncologists were also attracted to panitumumab's dosing schedule because it corresponds with the administration schedule of common chemotherapy regimens such as FOLFOX and FOLFIRI.

The ability "to dose panitumumab in synchrony with chemo is a big deal because otherwise those patients...if they are on Erbitux, have to come back every week and that is just a miserable situation for patients who would rather spend that time at home," Morrow said.

"It is a big advantage, bigger than we had thought," he added. "Bottom line is when we talk to physicians and pharmacists, they are very excited about this compound, and they are excited about potentially using it," he concluded.

Amgen's development strategy calls for getting panitumumab on the market as early as possible via the third-line metastatic colorectal cancer filing and then adding claims in earlier colorectal cancer and refractory head and neck cancer.

The company's goal is for panitumumab to be the first anti-EGFR agent approved for first-line treatment of colorectal cancer, Morrow said.

"The reason we want to get there as rapidly as possible is once there is an EGFR receptor antagonist established in that area, the second- and third-line tend to dry up" because oncologists "are probably not, if there is failure or progression, going to keep a patient on an EGFR," he explained.

The firm hopes to use the 1,000-patient, randomized PACCE (panitumumab advanced colorectal cancer evaluation) trial comparing a chemotherapy plus Avastin with a chemotherapy, Avastin and panitumumab regimen to "leapfrog" panitumumab into the first-line setting.

Perlmutter characterized PACCE as "an unusual study because in many ways it has Phase IV kind of characteristics in the absence of Phase III data." The trial reflects the firm's R&D strategy of developing real-world data pre-approval (see ⁶ Also see "Amgen Head-To-Head R&D Strategy Speaks To Growing Importance Of Payers" - Pink Sheet, 6 February, 2006.).

Data from PACCE trial, which was initiated in April 2005, could be released in the fall, around the same time as panitumumab's user fee date for the third-line colorectal cancer claim. The rolling BLA for panitumumab is expected to be completed by the end of March and the oncologic is likely to get a six-month review.

During the Jan. 26 meeting, Amgen CEO Kevin Sharer assured investors that the firm was prepared to meet any potential surge in demand accompanying the release of PACCE results at the time of approval.

Panitumumab Pricing “Bookends” Will Be Avastin, Erbitux, Amgen Says

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