After an approval last fall, Incyte has been offering big discounts on its newly launched atopic dermatitis cream Opzelura to stimulate patient access. Although still far from an ambitious year-end pricing goal, the company believes improvements in reimbursement deals will lift the average price it can charge for the new treatment.
As of the third quarter, Incyte was selling Opzelura at an average discount of 70.8%, company CFO Christiana Stamoulis told investors during a conference call Tuesday.
That marked an improvement from the 81.3% average discount recorded in the second quarter and the 85.8% at the beginning of the year. But it’s still far from the 40% to 50% goal that the company hopes to reach by the year’s end.
Still, Incyte is standing behind its year-end pricing target, citing payer coverage improvement.
As the company points out, a large portion of the steep discounts came from a free drug program Incyte started before commercial coverage kicked in. As of Oct. 22, Opzelura has reimbursement contracts covering about 84% of patients in the U.S., Incyte’s North America chief Barry Flannelly said on the call. Of those, nearly 70% of the claims are going through and being reimbursed, he said.
For patients who are denied coverage, Incyte offers a bridging program which provides Opzelura at cost, thereby lowering average prices, Flannelly noted.
Looking forward, Incyte believes the number of reimbursement deals with payers will continue to increase. It’s working to sign more agreements to cover more patients while aiming to improve formulary placement to lower patient copays.
“Those things will affect that gross-and-net and bring it down to the targeted range that we’re looking for,” Flannelly said.
Opzelura’s high discounts also reflect the fierce competition in atopic dermatitis. As Flannelly noted on the call, most patients must first go through one to two prior therapies before they can try Opzelura.
Despite the competition, Opzelura has become the most prescribed branded agent for new atopic dermatitis patients among U.S. dermatologists, with a new-to-brand market share of 17% among specialists, according to Flannelly.
After a slowdown in the second quarter, Opzelura sales have re-accelerated with a 130% sequential growth to $38 million in the third quarter. Altogether 62,600 units of the topical drug were shipped during the third quarter, up 32% from the second quarter.
Opzelura’s growth also has a new FDA approval in vitiligo to thank. In July, Opzelura became the first FDA-approved treatment for repigmentation in vitiligo, and Incyte launched in that indication in August.
Elsewhere at Incyte, Jakafi—which has the same ruxolitinib ingredient as Opzelura—racked up $620 million in sales in the third quarter, a 13% increase year over year. Incyte expects the drug to deliver sales between $2.38 billion and $2.4 billion for the full year. The company is also seeking FDA approval for a once-daily extended-release formulation of the drug with a target decision date of March 23, 2023. Jakafi is currently typically given twice a day.
All told, Incyte’s third-quarter net product revenues grew 20% year over year to $713 million. Total royalty revenues dropped 40% to $110 million.