Optum Ventures is among companies investing $25 million, betting on the company’s ability to show for which patients Humira doesn’t work.

Healthcare Finance News
Susan Morse, Managing Editor

Humira is the top-selling prescription drug by revenue.

The biologic drug is the first line of treatment on many formularies for treating rheumatoid arthritis, Crohn’s disease and other autoimmune diseases. It’s used to relieve pain and reduce inflammation.

But it does not work for everyone, and, with the average monthly price without insurance being $1,800 to $2,400 and its efficacy given a six-month chance, billions of dollars are being wasted, according to Alif Saleh, CEO of Scipher Medicine.

It adds up to about $32 billion a year for the insurance industry and consumers, Saleh said.

“And prices have gone up over 80% in the last few years,” he said.

While biosimilars are being developed, the drug is hard to replicate.

Humira is manufactured using protein antibodies from a living organism. It is a TNF inhibitor, a drug that suppresses the physiologic response to the tumor necrosis factor, or TNF, which is part of the inflammatory response. Unlike medication that is synthetically manufactured, biologics are almost impossible to replicate, which means a lot of time goes into creating Humira.

Scipher in Waltham, Massachusetts, has spent years coming up with a test to determine for which patients these TNF inhibitor drugs won’t work. It is about to release that first test.

Scipher was set up as an academic institution about 10 years ago by four area blockbuster institutions: Brigham and Women’s Hospital, Harvard, the Dana-Farber Cancer Institute and Northeastern University. It got its start in 2003, when founders Drs. Joseph Loscalzo and Laszlo Barabasi, building on the work of the Human Genome Project two years earlier, began constructing a map of how proteins influence human disease. Proteins make up the biology of the human cell. Scipher built a molecular map of all protein interactions that identified genomic signatures and linked to disease and predictive treatment outcomes. 

“It’s almost like the Manhattan Project in human biology,” Saleh said. “We learned through that project how little we know.”

What Saleh and others on his team didn’t understand was the commercial market for their research.

“We knew we had this scientific ability,” said Saleh, who has a background in molecular biology. “We didn’t understand the commercial application.”

The first thing they did was to visit eight of the largest payers in the country and ask them what they would want if the sky were the limit.

“It was like pouring gasoline on the fire,” Saleh said. “We got incredibly emotional responses. But the remarkable thing was, almost every payer said, ‘I need a test to predict the response to Humira.'”

During the third quarter, the precision medicine company expects to release PrismRA, a blood test that can predict non-responses to anti-TNFs such as Humira, Enbrel, Cimzia, Remicade, Simponi, Simponi Aria and Inflectra in patients with rheumatoid arthritis. 

The product will be made available to all payers including Medicare.

Saleh said he expects a gradual marketing production.

“I think 2020 for us is about making the test available for everyone,” he said.

But the company is already looking to determine which drugs will work, and that test is currently in development.

WHY THIS MATTERS

Money is always a concern for insurers, especially when it comes to wasted reimbursement.

“Expense, reimbursement is key, which is why payers are keen to our strategy,” Saleh said. “They’re targeting $32 billion a year.”

In the world of molecular diagnostic tests, the scientific community has to have payers onboard agreeing to reimburse for the test to have rheumatologists onboard to order that test for the patient.

“We’ve been working with payers for almost two years,” Saleh said. “When this test hits the market, it is being reimbursed.”

Series B financing has included investments of $25 million from Optum Ventures and other companies.

However, Saleh insists that the insurance industry’s interest is more than about saving money.

“We’re seeing across healthcare more value-based contracting,” he said. “It’s not only about cost, it’s about outcomes.”

THE LARGER TREND

Complicating the issue of getting the right drug to consumers is the current formulary system. Other drugs have been approved to treat what Humira treats, but they don’t sell as well because of the formulary system called “cycling.”

Cycling starts with the first line therapy and then moves down the list of drugs. It’s hard for the smaller guys to move up in the formulary because they can’t afford the rebates the big guys can pay, according to Saleh.

These are rebates paid to pharmacy benefit managers, which are passed on to insurers, which use them to lower the cost of premiums for all beneficiaries.

“Payers sort of created this problem for themselves,” Saleh said.

In the cycle of drugs on a formulary, the first-line drug Humira is tried, and if that fails to work, then likely it would be Enbrel. If the patient still doesn’t respond, the next drug might be Remicade.

“There’s a lot of data that shows if they don’t respond to one, they won’t respond to the other,” Saleh said.

Patients can cycle through these TNF drugs for years without responding. Then two years or more later, they may finally get the opportunity to go on a drug in a different drug class.

“What’s terrible for patients is, if they go on the wrong drug, rheumatoid arthritis attacks the bone and there’s bone erosion, and you can’t undo that,” he said. “Many are on opioids to manage the pain, it just accelerates.”