GSK offers UK rebate if Pfizer cancer drug better

* NICE scheme sets 12.5 pct discount plus potential rebate

* Rebate kicks in if Votrient inferior to Sutent in study

* Unusual deal chimes with UK move to value-based pricing

* Consensus sees $314 mln global Votrient sales in 2014

By Ben Hirschler

LONDON, Dec 24 (BestGrowthStock) – Britain’s state-run health
service will get a partial rebate from GlaxoSmithKline (GSK.L: )
if the company’s new kidney cancer drug Votrient does not match
up to a rival medicine in a head-to-head clinical trial.

The unusual deal, the first of its kind, hints at the type
of complex arrangements that could become commonplace as Britain
moves to a system of value-based drug pricing from the end of
2013.

Draft guidance from cost-effectiveness watchdog the National
Institute for Health and Clinical Excellence (NICE) on Friday
recommends Votrient for use on the National Health Service
(NHS), as long as GSK offers the special price scheme.

The deal provides for a straight 12.5 percent discount to
bring the cost of Votrient to the NHS into line with that of
Pfizer’s (PFE.N: ) Sutent, and also guarantees a financial rebate
if Votrient proves inferior to Sutent in the clinical trial.

The results of the study will not be known until mid-2012.

“If we fail to confirm that they are comparable in efficacy
— which we do not expect — then we provide a rebate back to
the NHS as a result,” GSK’s head of British operations, Simon
Jose, told Reuters.

“We are moving in the direction where price is driven by
value and value is driven by evidence, and therefore we can
start to construct different sorts of arrangements where we can
balance this off.”

The exact scale of the potential rebate has not been
disclosed. The monthly cost of Votrient and Sutent — both of
which are tablets — is just under 2,000 pounds ($3,085) per
patient.

Carole Longson, NICE’s health technology evaluation centre
director, said the rebate scheme made Votrient a cost-effective
proposition. The drug offers patients an additional option and,
for some, a more favourable side effect profile, she said.

NICE expects to issue final guidance on Votrient in February
2011.

MODEST SELLER

Votrient, also known by its chemical name pazopanib, is seen
as a modest seller for GSK in the next few years, with global
sales expected to reach $314 million in 2014, according to
consensus forecasts from Thomson Reuters Pharma.

Both Votrient and Sutent are so-called protein kinase
inhibitors, a relatively new class of targeted cancer treatment.
Other new drugs for kidney cancer have been rejected by NICE and
GSK has previously failed to persuade NICE to endorse its Tyverb
drug for breast cancer.

Jose said it was often difficult to demonstrate the full
value of new cancer medicines initially and the idea of linking
prices to longer-term scientific evidence could be a model for
future negotiations between government and industry.

The British government outlined plans last week for a
radical shake-up of medicines policy from the end of 2013, after
which it will introduce a system of “value-based” pricing.
[ID:nLDE6BF15G]

The new scheme would allow companies to make drugs available
at a “contingent” price that could be revised later in the light
of further evidence about a drug’s effectiveness.
(Editing by David Cowell)

($1 = 0.6483 pound)

GSK offers UK rebate if Pfizer cancer drug better