The immuno-oncology market prepares for the inevitable question: 'What's next?'

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Few therapeutic categories have seen more change and reinvention in recent years than oncology, led by Merck's Keytruda and Bristol-Myers Squibb's Opdivo, which are battling for market share indication by indication.

At least 68 new drugs spanning 22 indications have been approved to treat cancer in the past six years alone, according to the QuintilesIMS Institute. And within the immunotherapy class (in which the first drug was approved in 2011), there are now an estimated 1,000 clinical trials underway involving the major I-O players: Merck, AstraZeneca, Bristol-Myers Squibb, and Roche, according to Evercore ISI analyst Umer Raffat.  

Despite the attention and excitement around the potential of immuno-oncology therapies, there is uncertainty around the cost-effectiveness of certain therapies, whether all PD1/PD-L1 inhibitors are created equal in terms of how successfully they treat patients, and which of the nearly innumerable pairs of combination drugs being investigated will ultimately lead the market.  

See also: As immuno-oncology therapies evolve, so will the marketing

The oncology field “is trying to figure out what sort of combination therapy makes sense in immuno-oncology,” said Marc Engelsgjerd, a senior principal at inThought Research.

Among the most closely watched potential combinations right now is Merck's Keytruda with Incyte's IDO inhibitor epacadostat. That experimental combination has shown impressive overall response rates in non-small cell lung cancer and is currently in Phase-III trials to study its effects in bladder, kidney,and head and neck cancers, among others.

New data is expected to be presented at the American Society of Clinical Oncology's upcoming annual meeting, held June 2 to June 6 in Chicago, looking at how patients with non-small cell lung, renal, breast, and ovarian cancers fared when treated with a combination of Keytruda and epacadostat. Much of the data to be released at the meeting is expected to focus on immuno-oncology drugs.

See also: Merck's Keytruda combo could edge out the competition

While combination therapies may represent the current thinking on how to maximize the effectiveness of PD-1 inhibitors, it's difficult for drugmakers and researchers to know which strategy is the most likely to lead to success at this stage of development, Engelsgjerd said.

Even as pharma companies test out immuno-oncology combinations, clinical questions about the effectiveness of these therapies remains a concern. PD-1 and PD-L1 inhibitors both work to block the interaction of the PD-L1 protein with the PD-1 receptor, and there's reason to believe both PD-1 and PD-L1 inhibitors would be similarly effective compared to each other.

If you remember, in August of last year, Bristol-Myers Squibb said that Opdivo failed in a monotherapy trial treating lung-cancer patients in the first-line setting. That setback became Merck's advantage when data released later that year showed Keytruda had a clear benefit in this indication. Keytruda eventually became the first I-O drug to receive FDA approval in the first-line setting.

See also: Merck kicks off lung-cancer campaign

While BMS executives chalked up the failure to an overly ambitious trial design, some analysts questioned whether there are subtle differences between the drugs that are yet to be understood.

The recent failure of Roche's bladder cancer drug Tecentriq compounded those doubts. In May, more than a month after the FDA granted Tecentriq accelerated approval, the company reported that a Phase-III trial failed to show a survival benefit. Keytruda, on the other hand, did show an overall survival benefit in a similar trial.

“It's more puzzling than anything,” Engelsgjerd said. “There is a potential for differences in clinical-trial design to translate into differences in outcomes, but it's too early to make blanket statements about the difference in one antibody and another.”

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What is clear, however, is that there will be a debate on how the U.S. health system should pay for combination medicines that will likely have lofty price tags if approved. A recent study published in the Journal of Managed Care concluded that an Opdivo and Yervoy combination therapy was not “the cost-effective choice” to treat melanoma patients, compared to using Opdivo on its own.

Furthermore, QuintilesIMS said in a new report that it expects spending for cancer drugs to rise in the years ahead, forecasting that the costs of oncology drugs will grow by between 6% and 9% annually through 2021, and that overall costs will eventually exceed $147 billion by 2021. The same report found that cancer drugs launched in the last five years accounted for more than 20% of global oncology spending in 2016, noting that “these gains have been driven particularly by the newest generation of immuno-oncology drugs.”

A recent report from Express Scripts, too, suggests that the costs of cancer drugs is becoming more of a burden for employer health plans. The pharmacy benefit manager said cancer was the third costliest therapy class for employers in 2016, with spending on cancer drugs increasing nearly 22% last year. It also found that list prices of oral oncology drugs doubled between 2011 and 2016.

See also: The 2017 pipeline report: What to know about next year's launches

Speaking as to how the cost debate could affect combination therapies, Engelsgjerd pointed out that companies will likely have to price these drugs in a way “that reflects the reality of using them in combination. Other pharmaceutical markets are already taking a very critical look at cost-effectiveness. NICE and the UK haven't always been supportive of some of the monotherapy checkpoint inhibitors, when you start to contemplate two antibodies or even three, the effectiveness and safety profile has to be unambiguously positive.”

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