The cost of multiple sclerosis drugs in the US and the pharmaceutical industry

Objective: To examine the pricing trajectories in the United States of disease-modifying therapies (DMT) for multiple sclerosis (MS) over the last 20 years and assess the influences on rising prices. Methods: We estimated the trend in annual drug costs for 9 DMTs using published drug pricing data from 1993 to 2013. We compared changes in DMT costs to general and prescription drug inflation during the same period. We also compared the cost trajectories for first-generation MS DMTs interferon (IFN)–b-1b, IFN-b-1a IM, and glatiramer acetate with contemporaneously approved biologic tumor necrosis factor (TNF) inhibitors. Results: First-generation DMTs, originally costing $8,000 to $11,000, now cost about $60,000 per year. Costs for these agents have increased annually at rates 5 to 7 times higher than prescription drug inflation. Newer DMTs commonly entered the market with a cost 25%–60% higher than existing DMTs. Significant increases in the cost trajectory of the first-generation DMTs occurred following the Food and Drug Administration approvals of IFN-b-1a SC (2002) and natalizumab (reintroduced 2006) and remained high following introduction of fingolimod (2010). Similar changes did not occur with TNF inhibitor biologics during these time intervals. DMT costs in the United States currently are 2 to 3 times higher than in other comparable countries. Conclusions: MS DMT costs have accelerated at rates well beyond inflation and substantially above rates observed for drugs in a similar biologic class. There is an urgent need for clinicians, payers, and manufacturers in the United States to confront the soaring costs of DMTs. Neurology® 2015;84:1–8 GLOSSARY AWP5 average wholesale price; DMT 5 disease-modifying therapy; FDA5 Food and Drug Administration; IFN5 interferon; MS 5 multiple sclerosis; QALY 5 quality-adjusted life-year; TNF 5 tumor necrosis factor; VA 5 Veterans Affairs; WAC 5 wholesale acquisition cost. The landscape of multiple sclerosis (MS) treatment has changed dramatically over the last decade. As of November 2014, 12 disease-modifying therapies (DMTs) for MS have been approved by the US Food and Drug Administration (FDA). Despite the availability of more treatment options, costs for all MS DMTs have increased sharply. Between 2008 and 2012, US DMTs sales doubled from $4 billion to nearly $9 billion annually. In 2004, the average annual DMT cost per person was $16,050, accounting for half of all direct medical costs for patients with MS. Currently, the average annual cost for interferon (IFN)–b-1b (Betaseron; Bayer HealthCare Pharmaceuticals, Whippany, NJ) is over $60,000. Although high drug costs are a hallmark of specialty pharmaceutical classes, such as DMTs, the unexplained escalation in costs for older, first-generation MS therapies such as IFN-b-1b, IFN-b-1a IM (Avonex; Biogen Idec, Cambridge, MA), and glatiramer acetate (Copaxone; Teva Pharmaceuticals, North Wales, PA) has caused concern in the neurology community. The objectives of this study were to (1) investigate our impression that costs for all MS DMTs have increased dramatically since 2002, (2) explore the relationship between the release of newer DMTs and the trend in costs for older DMTs, and (3) compare DMT costs in the United States From the College of Pharmacy (D.M.H., S.M.A.), Oregon State University/Oregon Health & Science University; and the Department of Neurology (D.N.B., R.H.W.), Oregon Health & Science University, Multiple Sclerosis Center of Excellence West, Veterans Affairs Medical Center, Portland. Go to Neurology.org for full disclosures. Funding information and disclosures deemed relevant by the authors, if any, are provided at the end of the article. The Article Processing Charge was paid by OHSU Department of Neurology. This is an open access article distributed under the terms of the Creative Commons Attribution-Noncommercial No Derivative 3.0 License, which permits downloading and sharing the work provided it is properly cited. The work cannot be changed in any way or used commercially. © 2015 American Academy of Neurology 1 a 2015 American Academy of Neurology. Unauthorized reproduction of this article is prohibited. to those in other countries. This study suggests the need for the neurology community to advocate for changes in the pricing of MS treatments. METHODS Although the FDA had approved 12 DMTs for MS as of November 2014, we did not include 3 in our analysis. Cost data were not available at the time of our analysis for the 2 most recently approved DMTs: peginterferon-b-1a (Plegridy; Biogen Idec) and alemtuzumab (Lemtrada; Genzyme, Cambridge, MA). Mitoxantrone (generic, multiple manufacturers), approved in 2000 for MS, was excluded because it is much less commonly used to treat MS due to safety concerns. For the remaining 9 FDA-approved drugs, we computed the average annual acquisition costs for each month from July 1993 (approval date for IFN-b-1b) through December 2013. We estimated acquisition costs using average wholesale price (AWP) published by First DataBank. Although most third-party payers have moved away from AWP-based reimbursement formulas, it was the prevailing methodology for most of the study period and provides a consistent measure of price for comparisons of change over the past 20 years. AWP reporting was phased out in 2011 and acquisition costs were then estimated using wholesale acquisition cost (WAC) with the conversion AWP 5 1.2 3 WAC. We applied a 12% discount to AWP, the median discount that state Medicaid programs reimburse pharmacies, to estimate the amount paid to pharmacies by third-party payers. We then computed the effective percentage increase in annual costs and compared this to changes in the consumer price index for prescription drugs and all consumer goods and services (general inflation) over the same period using data from the US Bureau of Labor Statistics. Next, we compared the median annual cost trends for firstgeneration MS DMTs IFN-b-1b, IFN-b-1a IM, and glatiramer acetate to the contemporaneously approved biologic tumor necrosis factor (TNF) inhibitors etanercept (Enbrel; Amgen, Thousand Oaks, CA) and adalimumab (Humira; AbbVie, North Chicago, IL) using segmented regression analyses. We computed annual costs for TNF inhibitors using the same approach described for the MS drugs based on FDA-approved doses for rheumatoid arthritis. Annual costs were estimated quarterly beginning the fourth quarter of 1998 (the quarter etanercept was approved) until the fourth quarter of 2013 (61 total quarters). Four major periods of change were examined: (1) a baseline period preceding the approval of IFN-b-1a SC (Rebif; EMD Serono, Rockland, MA) (fourth quarter 1998 to first quarter 2002); (2) a period from the approval of IFN-b-1a SC to the re-introduction of natalizumab (Tysabri; Biogen Idec) (second quarter 2002 to second quarter 2006); (3) a period from the re-introduction of natalizumab to the approval of fingolimod (Gilenya; Novartis Pharmaceuticals, East Hanover, NJ) (third quarter 2006 to third quarter 2010); and (4) a period following the approval of fingolimod (fourth quarter 2010 to fourth quarter 2013). We selected the re-introduction date for natalizumab (June 2006–second quarter 2006) because it was only available for 2 months before marketing was suspended in 2005 to evaluate the risks of progressive multifocal leukoencephalopathy. The general form of the segmented regression model (without interaction parameterization) was log(Yt)5 b0 1 b1 3 Timet 1 b23 Rebift1 b33 Time Rebift1 b43 Tysabrit1 b53 Time Tysabrit 1 b6 3 Gilenyat 1 b7 3 Time Gilenyat 1 b8 3 DrugType 1 et. We log-transformed the dependent variable annual cost because initial plots of quarterly data were nonlinear. Because of this, the estimated b-coefficients are interpreted as a percent change. For each period, we report the quarterly percentage change (trend) in median costs for DMTs and TNF inhibitors individually and relative to each other. Statistical analyses were performed using PROC AUTOREG in SAS version 9.2 (SAS Institute, Cary, NC). Finally, we compared the most recent annual cost of therapy for each DMT to US dollar-adjusted costs from the United Kingdom, Canada, and Australia, a convenience sample of developed countries with accessible cost data. The following conversion rates (as of April 2, 2014) for cost data were applied: Canada (0.91), United Kingdom (1.66), Australia (0.92). In the United Kingdom, the National Health Service publishes net prices in the British National Formulary. Canadian drug costs were estimated using drug benefit prices published through Ontario’s Exceptional Access Program, although costs can vary by province. Drug costs in Australia are listed in an online compendium of the Australian Pharmaceutical Benefit Scheme and represent agreed-upon prices paid by the Commonwealth of Australia. We also examined costs paid by the US Department of Veterans Affairs (VA) because of their ability to negotiate discounts directly with manufacturers. VA costs were estimated using Big Four pricing (or Federal Supply Schedule price if no Big Four price was listed) available through the online VA National Formulary. For comparative purposes, we further adjusted US costs to account for federally mandated rebates paid to the Medicaid program. Appendix e-1 on the Neurology® Web site at Neurology.org contains details of our cost and statistical modeling methods. RESULTS First-generation DMTs IFN-b-1b, IFNb-1a IM, and glatiramer acetate were introduced with annual acquisition costs between $8,292 and $11,532 (table 1). Over subsequent decades, costs for these DMTs rose on average 21%–36% annually. Costs of the most recently approved oral agents fingolimod, teriflunomide (Aubagio; Genzyme), and dimethyl fumarate (Tecfidera; Biogen Idec) have increased 8%–17% annually since their approval. In contrast, general and prescription drug inflation only increased 3%–5% per year during the same period.