Pfizer warns Biden price controls could hurt cancer drugs development

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Pfizer’s oncology chief has warned that the Biden administration’s drug price reforms could hurt the development of cancer treatments targeted at children or patients suffering from rarer forms of the disease.

In August, the US government unveiled $7.5bn of cost savings for taxpayers from the first 10 drugs eligible for price negotiations with Medicare, the state-backed healthcare programme for over-65s, as part of the sweeping changes introduced by the Inflation Reduction Act.

Chris Boshoff, Pfizer’s chief oncology officer, who was an advocate for Pfizer’s $43bn acquisition of cancer-focused biotech Seagen last year, said the threat of price negotiations for cancer medicines changed the economics of studying the drugs for paediatric cancers or rarer forms of the disease.

“There may be less incentives to develop a rare indication or paediatric indication because especially as you close into the IRA date, why would you then start a large phase-three programme or large complex programme for a small indication when the return on the investment . . . would be single digits?” said Boshoff.

But Boshoff said Pfizer had not deprioritised certain programmes because of the IRA drug-pricing changes, which makes small-molecule drugs eligible for negotiations after nine years and more complex biologic medicines eligible after 13 years.

Pfizer was only hit with price controls on one of its drugs — Eliquis — in the first round of negotiations. However, during the next round of negotiations up to three Pfizer drugs may be targeted, according to analysts.

Moreover, Pfizer’s new cancer drugs acquired through its Seagen acquisition — eight of which are expected to achieve blockbuster status of $1bn in sales by 2030 — will not be affected for several years.

Boshoff’s comments come as Pfizer’s multibillion-dollar bet on oncology with the takeover of Seagen, a specialist in antibody drug conjugates, a new targeted form of chemotherapy, begins to pay off.

At the European Society for Medical Oncology this weekend, Pfizer revealed data that showed Padcev, one of Seagen’s approved products, “significantly improved” progression-free survival in patients with the most aggressive form of bladder cancer.

Pfizer also showed that a combination of targeted therapies developed in-house — Braftovi and Mektovi — boosted the median progression-free survival of non-small cell lung cancer patients to just over 30 months in mid-stage trials.

Boshoff said next year would be “critical” for Pfizer’s push into cancer as it launches late-stage trials in lung and breast cancers.

Making a success of the Seagen acquisition is important as the company seeks to bounce back from a post-pandemic slump in which its share price has dropped 50 per cent since a 2021 peak.