Max Nisen is a Bloomberg Gadfly columnist covering biotech, pharma and health care. He previously wrote about management and corporate strategy for Quartz and Business Insider.

The February news that Amgen Inc.'s cholesterol-lowering drug Repatha helped prevent heart attacks was one of the most exciting biotech events of the year, renewing faith in the drug's blockbuster potential. 

But the full trial results behind that headline, which Amgen released on Friday, disappointed investors, sinking the company's shares more than 6 percent. 

Repatha's sales have been stymied by pharmacy benefit managers (PBMs), middlemen who negotiate drug prices on behalf of insurers and employers. Stronger trial data might have helped Amgen force PBMs to accept the reality of Repatha's high price. Now, the company will have to be more flexible. If it does, then PBMs might do well to meet it halfway. 

In the Details
News of a successful clinical trial boosted Amgen shares in February, but the details of that trial erased much of that gain
Source: Bloomberg

On one hand, Repatha reduced the likelihood of heart attacks, strokes and cardiovascular death by 20 percent in a huge Phase 3 trial. In a vacuum, that's an extraordinary result, and the data improved in the second year patients were treated. 

But Repatha only reduced the risk of an all-encompassing measure of cardiac events by 15 percent, below the level investors wanted. And the drug did not reduce the overall number of patient deaths relative to a placebo in the trial, another hoped-for result. 

Any perceived ambiguity makes things trickier for Amgen and leaves payers in the driver's seat. The drug's $14,000 annual list price means questions over its value will keep hurting sales. 

Payers have slowed the launch of Repatha, a drug expected to have multi-billion-dollar sales, to a crawl
Source: Bloomberg

Amgen says it is willing to give a refund to a patient who suffers a cardiac event, an ambitious offer the company hopes will convince more payers to ease restrictions that make it difficult to obtain the drug. But less than 6 percent of patients on Repatha in the two-year trial suffered such an event. The vast majority of patients will likely take the drug for years without any refund going to their health plan provider.   

To really help Repatha overcome PBM resistance, Amgen must be generous not only with refunds, but also with pricing and other offers to payers, such as annual spending caps. Otherwise, something like the status quo -- where most Repatha prescriptions don't make it to patients -- may continue.  

Amgen already offers payers big discounts on the drug's list price -- more than 30 percent, according to a Bloomberg Intelligence analysis. It may need to go further than to expand access.

According to a Bloomberg Intelligence analysis, Amgen is giving a big chunk of Repatha's gross sales back to payers
Source: Bloomberg Intelligence

That will cost the company. But the value of accessing more patients, making things easier for doctors, and generating real-world data is more than worth it. All drugs have a price-volume tradeoff, and Amgen should favor volume here. 

It won't be easy. PBMs have a lot of incentives to keep barriers up and spending down.

But there are a number of reasons PBMs and insurers should reconsider, if Amgen is willing to offer serious concessions. If the cost of Repatha comes down, then its use could be more cost-effective. A drug is cheaper than emergency treatment of a stroke, heart attack, and paying for the potential lifelong consequences of those events.

This could also give PBMs a chance to soften intense criticism from both drugmakers and politicians, who claim they profit excessively from the opaque drug-rebate system, where they use restrictions and leverage to force down the price of drugs. 

In the Crosshairs
Shares of Express Scripts, the biggest pure-play pharmacy benefit manager, have come under pressure from criticism of its business model
Source: Bloomberg

It will take more concessions than both drugmakers and PBMs are used to making, but there's a path where both can benefit.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

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Max Nisen in New York at

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Mark Gongloff at