Spotlight – Multiple sclerosis drugs not alone with double-digit price hikes

Multiple sclerosis drug makers like Biogen are the villains of the moment, the rising price of their products being the current target of members of the US Congress. The price increases cited by politicians are extreme when measured by almost any sector of the economy – even pharmaceuticals broadly if generics are included – but in the realm of branded drugs they do not seem out of the ordinary.

The point being made by Democrats on the House of Representatives Oversight and Reform Committee is that market competition has not led to price moderation in MS. Competition does not always yield the same outcomes in health care as it does in other sectors of the economy, however, and while the criticism of double-digit annual price rises might be justified, it may be a bit unfair to single these products out (see tables below).

Dear drugmaker

Based on a 2015 analysis of MS drug prices published in the journal Neurology, Representatives Elijah Cummings and Peter Welch have sought information on pricing, profits and distribution channels from Bayer, Biogen, Merck KGaA, Novartis, Sanofi and Teva.

Avonex seems to be an extreme case – the interferon beta introduced in 1996 costs in 2017 nearly 10 times its launch cost, the representatives point out. While that might be shocking, it is a little less so when broken down to annual growth rate, which comes to a more modest-looking 12% a year.

This is well above growth in the US consumer price index (CPI) and indeed, even the CPI for prescription drugs – over the same period, annual prescription drug inflation has run an average of 4% a year – but by now the world knows it is not abnormal in the world of branded pharma.

The glaring cases of Turing Pharmaceuticals with Daraprim and Mylan with the EpiPen have brought this to light, and shamed some biopharma chief executives into pledging price caps. Allergan’s Brent Saunders is one, promising “single-digit” annual increases, although it should be pointed out that at a 9.9% annual increase a 30-pill bottle of the irritable bowel syndrome drug Linzess will more than double from its current price to $795 before it loses patent protection in 2026.

Not alone

An analysis of Medicaid prices since 2008 – which, while often lower than commercial rates, broadly track them because of best-price guarantees – confirms that prices of most MS drugs are growing at a double-digit rate or very nearly so. The increases look less extreme over this shorter time span, versus what the Democratic members of Congress portrayed.

Annual Medicaid cost of MS drugs ($)
Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Annual growth rate
Betaseron Bayer 55,519 63,497 72,468 77,813 12%
Copaxone 20mg Teva 25,954 31,647 37,738 42,971 51,097 55,999 62,333 73,217 76,356 14%
Avonex (pen) Biogen 49,156 55,507 62,093 65,731 68,777 9%
Rebif Merck KGaA 28,210 31,080 34,286 40,602 47,457 56,999 63,313 70,675 76,210 13%
Tysabri Biogen 44,539 51,276 59,227 66,432 14%
Gilenya Novartis 52,347 51,236 58,845 61,068 64,830 68,808 85,865 9%
Aubagio Sanofi 46,305 52,062 62,762 70,836 76,673 13%
Tecfidera Biogen 55,751 62,592 70,932 77,016 11%
Lemtrada Sanofi 59,132* -
Copaxone 40mg Teva 60,267 65,270 69,183 7%
Plegridy Biogen 62,127 69,818 75,910 11%
Glatopa Novartis 65,502 59,919 -9%
Ordered by oldest to newest products, some historical data incomplete; *$148,553 first year  Source: EvaluatePharma

This analysis annualises the Medicaid cost based on the pack price, the labelled dosing and the fourth quarter reported Medicaid cost in the given years.

But this growth rate is not unusual for chronic diseases. Rheumatoid arthritis, which is also treated with a mix of novel biologicals and small molecule agents, shows Medicaid price increases of a similar magnitude.

Annual Medicaid cost of rheumatoid arthritis drugs ($)
Q4 2008 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Annual growth rate
Enbrel Amgen 22,298 24,106 25,157 28,018 29,678 33,338 38,149 46,909 55,052 12%
Humira Abbvie 22,481 23,792 24,769 26,688 29,891 33,685 39,421 48,997 60,119 13%
Cimzia UCB 22,249 21,783 22,083 23,720 26,626 28,277 30,851 32,469 33,725 5%
Simponi Johnson & Johnson 21,290 22,208 25,044 27,533 30,869 36,653 42,732 46,555 12%
Xeljanz Pfizer 17,106 24,652 28,466 39,708 41,889 25%
Ordered by oldest to newest products; Remicade omitted as dosing schedule complicates pricing comparisons  Source: EvaluatePharma.

Some caveats are in order, of course. For example, it is surprising that with four interferon beta drugs being used to treat MS – Betaseron, Rebif, Avonex and Plegridy – competition has not led to price moderation, especially since the intellectual property on Rebif and Betaseron has long expired. This has prompted the representatives to allege "shadow pricing" practices in which one company raises prices and the others match.

The durability of interferon price rises may speak as much to the difficulties in launching biosimilar agents in the US as it does to Merck KGaA and Bayer’s pricing strategies. In addition, the later entrants Avonex and Plegridy have differentiated themselves with longer dosing intervals.

Even if biosimilars enter – in rheumatoid arthritis, Remicade is already subject to US competition from Inflectra – the takeup is restricted by physicians’ and patients’ willingness to switch if disease is stable, as well as clever pricing strategies by the owners of innovative products. Inflectra’s forecasts have shrunk as Johnson & Johnson has struck deals to keep insurers paying for Remicade.

Likewise, it is surprising that there is not a little more price moderation in rheumatoid arthritis given that Humira, Enbrel, Simponi, Remicade and Cimzia are all TNF alpha blockers. As more biosimilars enter, it will be interesting to see if rheumatoid arthritis drugs show the same sustainability as MS agents.

That is not to say that aggressive payer action is fruitless, as Novo Nordisk has found in the realm of diabetes care and especially insulin – although even in the case of insulins, double-digit annual unit price increases have been the norm since 2008 for Medicaid. Prescription drug inflation at closer to 6% in 2016 shows that these double-digit increases are not broadly seen when genericised drug classes are taken into account.

Yet there are enough instances of these 10% or greater annual increases to raise concerns. The specific attack on MS may be a case of being able to manage what you measure – or at least criticise what has been measured. Double-digit annual increases are difficult to justify, but they are so common in pharma that to focus only on MS misses some other deserving targets.

To contact the writer of this story email Jonathan Gardner in Virginia at jonathang-us@epvantage.com or follow @ByJonGardner on Twitter

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