Roche plans to address cost of Avastin in Europe

LONDON, April 18 (Reuters) - Swiss drugmaker Roche Holding AG ROG.VX is investigating ways to limit the cost of its Avastin drug in Europe, particularly as a treatment for breast cancer, the group's head of pharmaceuticals said on Wednesday.

William Burns said the move followed a successful price capping programme by its majority-owned partner Genentech Inc. DNA.N, which markets the medicine in the United States.

Avastin was originally developed as a treatment for colorectal cancer, but it is now being used in other tumour types, including breast cancer, where a higher dosage is recommended, which pushes up the cost.

“We’ve shown a certain flexibility through the Genentech organisation in coming up with a creative approach for capping in the U.S,” Burns told analysts in a post-results conference call.

“We’ve a number of ideas that we are sharing at the moment with the individual countries in Europe. This is not something that you can launch or have a uniform answer for across Europe, but we do have some creative ideas.”

Burns declined to give further details but said any pricing mechanism in Europe would not derail expected strong sales growth for Avastin, which some analysts believe will become Roche’s biggest seller in the years ahead.

“I think what we will see here is good usage and there will be some trade-off between volume or penetration depending on high or low dosage but you will still end up with a very good revenue number,” Burns said.

He noted a number of European countries were already expecting a degree of price reduction when cancer drugs were approved for new indications, and this had been seen with older cancer treatments Herceptin and MabThera.

Genentech said last year that it would impose a cap of $55,000 a year for Avastin in the case of U.S. patients, regardless of insurance or income.

The high price of modern targeted therapies like Avastin has been criticised by patient groups and payers, prompting talk of a backlash, similar to the controversy over AIDS drug prices in the 1990s.

Roche, the world’s largest maker of cancer drugs, argues that newer treatments are highly cost-effective, but it is sensitive to concerns about pricing. Industry analysts, meanwhile, are concerned that any significant reduction in prices could undermine future earnings.

Recent scientific advances in fighting cancer have made oncology a fast growing and highly profitable section of the pharmaceuticals market, tempting many more companies into the field.