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Demand for 1st cannabis-based drug meets distribution, insurance hurdles

Patients are demanding GW Pharmaceuticals PLC's Epidiolex for hard-to-treat epileptic conditions, but for some, the first cannabis-based medication approved by U.S. Food and Drug Administration has been hard to get.

When the cannabidiol therapy received a drug scheduling decision and hit the shelves four months after the FDA's approval, physician surveys and social media chatter reported difficulty accessing the medicine.

In November and December, filling a prescription took four to six weeks — an "unacceptable" figure, GW Pharma's vice president of investor relations Stephen Schultz said in an interview. Sales for that period were $4.7 million.

U.K.-based GW Pharma has said repeatedly that access is the issue, rather than supply. At the J.P. Morgan Healthcare Conference in January, CEO Justin Gover said the company had enough supply to fulfill patient demand and continue its Epidiolex trials for other indications.

Epidiolex is approved for seizures associated with Lennox-Gestaut syndrome, or LGS, and Dravet syndrome, conditions that primarily affect children. Dravet is an inherited condition that begins in infancy. Both conditions are potentially life-threatening as patients generally experience frequent seizures.

Stifel analyst Paul Matteis wrote in a Dec. 2 note that physicians said patients and their families were often asking for Epidiolex. During GW's fourth-quarter earnings call, J.P. Morgan analyst Cory Kasimov commented that "recent noise on various social media platforms" reported difficulty obtaining Epidiolex.

"Access [is] the major variable that will dictate whether or not the Epidiolex launch is a success," Stifel's Matteis said. He estimates $129 million in Epidiolex sales in 2019.

Obtaining Epidiolex

On average, Epidiolex costs an estimated $32,500 a year, Schultz confirmed, and each 100-milliliter bottle costs $1,235. According to Schultz, patients insured by the government's Medicaid program for low-income Americans would pay $5 to $10 a month out-of-pocket, while commercial patients will pay no more than $25 a month.

As Epidiolex is only a few months into its launch, Schultz said, most of the dosing will be on the low end of that window, and initial prescriptions are "titration doses."

"Physicians will slowly bring patients up to their target dose [which is 10 milligrams per kilogram a day] and then observe their patients," Schultz said. "Because it's a scheduled medicine, pharmacies are required to dispense only exactly the amount prescribed."

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Specialty pharmacies are better equipped to handle this prescription process, Schultz noted.

But epileptic conditions have primarily had generic options prior to Epidiolex, so physicians may be taken off guard by Epidiolex's more complicated specialty pharmacy hub, Schultz said.

That hub has now expanded to 130 pharmacies; however, at launch, the distribution system had been "overwhelmed" by high demand, Leerink analyst Marc Goodman said.

From December 2018 to January 2019, prescriptions dispensed have increased 150%, according to GW Pharma's fourth-quarter earnings call.

During the Feb. 26 call, GW Pharma's president of North America Julian Gangolli said the company had reduced the time-to-fill to an unspecified rate, citing the specialty pharmacy expansion and new payer coverage determinations. Matteis estimated a rate closer to two weeks.

Schultz said the goal is a week to 10 days from the time the patient has a prescription written to when the medicine is ready.

Insurance coverage

Epidiolex, categorized as the lowest level of risk on the federal drug schedule, can require prior authorization from some insurers, adding another layer of complication for patients.

Currently, approximately 80% of commercial lives, or about 145 million people, have a coverage determination for Epidiolex. Of those, 60% are covered with either no prior authorization or a more lenient prior authorization akin to prescribing according to the label, which means adhering to the FDA-approved indications, Schultz said.

Prior authorization can be as light as a requirement for the prescription to be written by a neurologist, or as comprehensive as a list of criteria for the patient's condition and prior treatment regimen, such as failing two previous anti-epileptic drugs.

For example, Cigna Corp.'s Express Scripts, which covers about 60 million lives, added Epidiolex to its preferred coverage list in November, and for 22 million of its covered lives, opted for the lighter prior authorization of a prescription being written by a neurologist, according to Schultz.

Aetna Inc., on the other hand, laid out a number of precertification criteria for Epidiolex's initial and continued prescription, including documentation of seizures per week, documentation of serum transaminases and total bilirubin levels, and proven inability to use at least one previous anti-epileptic drug, according to information on Aetna's website.

Schultz said coverage determinations may be stricter now than where they ultimately will end up, "and that's not unusual for a new-to-market drug." For example, new cholesterol-lowering therapies from Amgen Inc. and Sanofi and Regeneron Pharmaceuticals Inc. have also faced restrictions from payers shortly after hitting the market.

Some payers have yet to determine Epidiolex coverage. UnitedHealth Group Inc. is still undergoing an internal review process for the drug, according to a company spokesperson. UnitedHealth Group is the largest health insurer in the U.S.

Schultz said payer coverage conversations have generally been positive, though, and that insurers are "reticent" to stand in the way of physician specialists accustomed to figuring out a custom therapeutic mix for their patients.

He added that payers are aware of the history of significant unmet need for epilepsy patients, a third of which do not adequately respond to treatment.

"Seizures do damage to patients long-term," Schultz said. "The risks and costs associated with uncontrolled seizures are very high … and unfortunately, a pretty high percentage [of hospitalized cases] end in death due to epilepsy."

In measuring Epidiolex's success, Matteis said patient demand may not be a question, but rather how GW Pharma secures reimbursement from insurers.