NASH, or non-alcoholic steatohepatitis, is a disease that a typical patient probably hasn't heard much about. But if you're in the pharmaceutical industry, you probably consider it the next great health threat.
The disease is characterized by a buildup of fat in the liver and results in severe scarring to the organ; eventually the scarring leads to the need for a liver transplant, and can greatly increase the chances of developing liver cancer.
In fact, NASH has become the second most common indication for liver transplants in the U.S. after chronic hepatitis C, according to a 2017 paper in the journal Nature. Between one-fifth and one-quarter of adults in the developed world have fatty liver disease, the precursor to NASH, and a majority of those patients have NASH, suggests a 2015 meta analysis.
With 195 treatments in the pipeline, it's clear that pharmaceutical companies realize the lucrative potential of bringing a drug to the market for this space. Reports estimate the market for NASH drugs could be worth upwards of $20 billion by 2025.
But there are no treatments on the market just yet and most are still two to three years away from approval.
Due to the silent nature of the disease, lack of treatments and rapidly changing pricing dynamics in the U.S., drugmakers will face several challenges when these medications are finally ready for commercialization.
Even though NASH and non-alcoholic fatty liver disease (NAFLD) can ultimately be fatal, it's the sort of chronic disease that can take decades to have ill effects. Oftentimes, patients don't show outward symptoms until the scarring in their liver becomes bad enough to progress to full-blown cirrhosis. At that time, the only treatment option left is a liver transplant.
Further complicating diagnosis is the range of co-morbidities patients often have. NASH generally goes hand-in-hand with obesity, but so do plenty of other diseases like diabetes, heart disease and high cholesterol.
"There will be some clinicians who will think this patient is more likely to die of a heart attack than of liver failure, and will wonder: 'So do I really need to treat this right now?'" said Greg Rotz, principal in PwC's Advisory business and lead on the firm's work on commercial issues in pharmaceuticals.
"The commercial strategy for these drugs will need to provide a clear case for why to treat those patients now, especially with all of their other co-morbidities like diabetes and heart disease — those are the things clinicians are trained to worry about first."
Physicians are likely to be further deterred from diagnosing the liver disease due to the highly invasive nature of diagnosis. The only way to definitively determine if someone has NASH, and which of the five stages of fibrosis they currently are in, is to take a liver biopsy. Physicians are unlikely to order such an invasive test unless it's absolutely necessary.
So if pharmaceutical companies want the market to succeed, it likely means developing less invasive means of diagnosis, and bringing diagnostics to market that can help physicians clearly see the extent of the disease without the need for biopsies.
Closely tied to diagnosis is the idea of education — educating both physicians and the wider public about the dangers of obesity and how it can impact the health of the liver.
Pharmaceutical companies are not only going to have to show that NASH is worth treating, but at what point in the disease doctors need to start having conversations with patients.
Rotz notes that NASH is far from the first space to face these challenges, pointing to the development of the statin market as an example of a market that didn't develop overnight.
"What level of LDL is high risk and thus treatable with a prescription? Should we use this pill just on our smoker population or everyone? Today we know 'lower is better' when it comes to LDL, but that's not how it all started," Rotz added to BioPharma Dive in an interview.
"There are countless other examples of where a real need existed, but much work was required to build a real prescription category. There will need to be careful investments made to develop this market too."
The statin example turned out to be a positive one for pharmaceutical companies — Pfizer's Lipitor (atorvastatin) became one of the best-selling drugs in the world and had sales of more than $13 billion annually at one point. Still, there have been other markets that weren't as successful.
Take obesity. Several years ago, three competing obesity pills entered the market, with many industry insiders expecting them to be immediate blockbusters. Due to a number of factors, including poor education on the part of the companies, all three drugs flopped and were subsequently abandoned. One of the companies even filed for bankruptcy. Something that the obesity companies failed to do was demonstrate a transformative impact, said Rotz.
Being able to clearly articulate what the unmet need is and how a drug could significantly improve patient lives will be one of the core challenges for NASH drugmakers.
Intercept Pharmaceuticals' Ocaliva (obeticholic acid) has long been seen as likely to be one of the first drugs to enter the NASH marketplace. The drug has already been approved for the rare liver condition primary biliary cirrhosis (PBC), and is currently in Phase 3 testing for the much larger therapeutic condition.
But Ocaliva highlights one of the major challenges that faces drugmakers — pricing. The drug is already on the market for nearly $70,000 per year per patient for PBC. Since the disease only affects a small patient population, the drug isn't a heavy burden on the healthcare system. But a price tag of $70,000 would certainly break the system given the millions of people in the U.S. alone that have the disease.
Drugmakers would be wise to take a history lesson from another liver disease, hepatitis C. Gilead Sciences faced worldwide pushback from payers and lawmakers after pricing its hepatitis C drug Sovaldi (sofosbuvir) at $84,000 for a course of treatment. Gilead, at least, could claim its treatment is essentially curative, while NASH drugmakers are unlikely to have the same level of efficacy for the first medicines entering the market.
In the years since the nation first got sticker shock from the hepatitis C drugs, payers and lawmakers have been actively trying to bring down drug prices. This includes more rapid approval from the Food and Drug Administration to increase competition in the marketplace, as well as payers testing out new payment models. One option, in the case of Ocaliva, could be indication-based pricing; patients with NASH would be charged less than those with the rare disease.
Considering the current pricing environment, the unmet medical need, and the symptomless nature of the disease, it will be tricky for pharma to find that sweet spot when it comes to setting a price.