Sarepta stock takes hit after Anthem says it won’t cover Duchenne drug
Anthem Inc. said Friday it would not cover the cost of the first drug approved to treat Duchenne muscular dystrophy, a surprising move by one the nation’s biggest insurers that pushed down the stock of Sarepta Therapeutics Inc., the Cambridge company that makes the treatment.
The Indianapolis-based insurer, which has about 40 million members, questioned the effectiveness of the new medicine, citing a Food and Drug Administration statement saying that “a clinical benefit has not been established.” The FDA approved the drug, called Exondys 51, last month despite an internal dispute over its benefits.
Anthem’s decision contrasts with those of United Healthcare Services Inc. and Cigna Corp., two other big insurers, which said they are covering the treatment. Sarepta is charging an average price of $300,000 per patient annually for Exondys 51, a price it says is in line with those of other therapies for rare genetic disorders.
The company has estimated there are only about 1,000 patients who could be treated with its drug, a subset of boys with Duchenne who have a gene mutation that makes them unable to produce a protein known as dystrophin that helps keep muscle cells intact.
Health insurers have sometimes declined to pay for new medicines. But those are usually high-priced drugs aimed at diseases that already have other treatments, said Jon Kingsdale, associate professor at Boston University’s School of Public Health and managing director in the Boston office of health care consultants Wakely Consulting Group. There are no other drugs on the market for Duchenne.
“This is pretty rare,” Kingsdale said. “It’s not the typical reaction when there’s a new medicine... We’re in a circumstance where the drug companies are getting bolder in their pricing and the health plans are under pressure by employers and by premium payers to resist it.”
Top officials of the FDA overruled their staff and advisers in approving Sarepta’s drug. While medical experts agreed it produced dystrophin, they differed on whether it produced enough of the protein to demonstrate a measurable benefit to patients.
Executives at Sarepta, which has staked its future on building a portfolio of Duchenne therapies, said the company was aware of Anthem’s decision.
“We can not comment on ongoing reimbursement discussions but we do have a robust team that is actively educating payers on the safety and efficacy of Exondys 51,” Sarepta said in a statement. “We are grateful to the many insurance carriers that have quickly decided to reimburse Exondys 51 and accelerate getting this medicine to patients as soon as possible.”
It wasn’t immediately clear if health insurers other than United and Cigna are reimbursing for the drug or if any payer other than Anthem is refusing to cover it. Aetna Inc. said it was reviewing Exondys 51. The three largest Massachusetts health plans -- Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Care, and Tufts Health Plan -- also said they are evaluating it.
Sarepta’s stock fell 6.2 percent to $57.89 on Friday.
Anthem, which runs Blue Cross Blue Shield plans in 14 states, issued a statement saying it recognized the severity of Duchenne and empathized with patients and their families. But it said “we rely on scientific evidence” when reviewing new drug treatments seeking coverage.
In reviewing the medical literature, the statement said, an Anthem medical policy assessment panel made up mostly of outside doctors “determined that Exondys 51 failed to show it improves health outcomes, and therefore it is not a covered benefit for our members.”
Anthem said it would be monitoring a follow-on Sarepta study required by the FDA to confirm if its treatment can improve motor function in Duchenne patients losing the ability to stand and walk.
Three earlier Duchenne drug candidates, developed by other companies, were rejected by the FDA over the past year before the agency approved Exondys 51.