Combination Treatment Could Heighten Pricing Pressures On Johnson & Johnson (NYSE:JNJ)?

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Johnson & Johnson (NYSE:JNJ), AbbVie Inc (NYSE:ABBV) and Bristol-Myers Squibb Co (NYSE:BMY) already have many individual cancer treatments. But it has been established that a regimen that combines drugs from these companies can be more effective in combating cancers than administering their individual drugs separately.

Researchers combined Johnson & Johnson’s cancer drug called Darzalex with two other drugs that were already being offered as combination therapy. What they found was that the combination of the three drugs turned significantly positive results in patients afflicted by multiple myeloma compared to the two-drug combination or Darzalex alone.

Exploring multiple drug combinations

Besides Johnson & Johnson’s Darzalex, several other new drugs are being tried in combination with other older drugs to see if they the combined treatment can be more beneficial to patients. Keytruda from Merck & Co., Inc. (NYSE:MRK) is being tested as a combined treatment with over 50 other drugs. Bristol Myers’ Opdivo is also being tested with more than 40 other drugs for a combined regimen.

Roche Holding Ltd. (OTCMKTS:RHHBY) is also in the process of testing its Tecentriq drug as a combined treatment of two or more other cancer drugs. AbbVie in the process of testing the benefit of providing Venclexta and Imbruvica as a combined treatment for a form of leukemia.

Backlash over pricing

Bristol Myers’ Opdivo and Yervoy became the first immunotherapy combination treatment to gain FDA approval. But the combined treatment costs of over $250,000 per patient for the first year of treatment is where the problem lay in relation to multiple drug combination movement. There are questions about whether insurers, hospitals and patients will agree to potentially higher costs of combination regimens.

Johnson & Johnson’s Darzalex costs $134,550 per patient for the first year and subsequent treatments cost $76,050 each year. When combined with the two older drugs, the multi-combination regimen could cost an average patient more than $180,000 for the first year of treatment.

AbbVie’s Imbruvica and Venclexta, which are being explored as potential combined treatments, cost $116,000 and $109,500, respectively, for the first year.

Although Johnson & Johnson said it couldn’t speculate on the pricing of a treatment combination that has not yet been approved, there are compelling reasons the company would be supportive of a multiple drug regimen. But the combination treatments that turn up expensive could trigger more pricing backlash from payers and regulators alike.

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