New data from a report on US Medicaid program spending suggests that spending on disease-modifying therapies has more than doubled over a recent 7-year stretch, with no expected help from generic competition coming soon.
Daniel M. Hartung, PharmD, MPH
The findings of a report from Daniel M. Hartung, PharmD, MPH, and colleagues has revealed that the spending in the US Medicaid program on disease-modifying therapies (DMTs) for the treatment of multiple sclerosis (MS) more than doubled from 2011 to 2017.
All told, the gross annual expenditures on DMTs increased from $453 million in 2011 to $1.32 billion in 2017. “[This occurred] primarily as a function of higher costs per prescription. Introduction of a generic glatiramer acetate product in 2015 had nominal effects on overall price trajectories and utilization within the class,” Hartung, an associate professor of pharmacy at Oregon State University, and colleagues wrote.
Mid-2015, the introduction of a generic formulation of glatiramer acetate was found to be linked to an immediate increase of $441 in cost per prescription of the branded formulation (95% CI, 184—697; P <.001), which was followed by a period amounting to a $52 reduction per prescription (95% CI, −86 to −18). Despite the decrease of generic glatiramer acetate cost over time, its introduction seems to have failed to affect the overall trend in costs.
This “generic paradox” has been observed with other drugs, as noted by Hartung et al, possibly signifying efforts by Teva "to both retain revenue and further push market share to the 40 mg version.”
Previous work from 2015 by Hartung and colleagues detailed a rapid and coordinated price escalation for every DMT occurring in the middle 1990s until 2013, with zero evidence of market expansion resulting in cost reduction—it resulted in the opposite.2 That data revealed increases from $11,000 annually to $60,000 for first-generation DMTs, rates of increase that are 5 to 7 times higher than prescription drug inflation. Likewise, newer DMTs entered the market with a cost ranging from 25% to 60% higher than the average.
Notably, DMT costs in the US are 2 to 3 times higher than in comparable countries.
“In the current study, we extend follow-up through 2017 and find that the DMT cost trajectory, with a few exceptions, has not abated, even despite the introduction of the first generic DMT: Sandoz’s glatiramer acetate,” Hartung et al wrote. They added that despite some of the increases in spending and gross expenditures can be attributed to the expansion of Medicare in 2014, the main factor appears to be rising DMT costs—cost per prescription doubled over the study period.
The analysis also shows notable important market dynamics before and after generic glatiramer acetate entered the market. Teva converted from a 20-mg to 40-mg formulation in a successful attempt to slow the impact of competition. As well, “the continued use of branded glatiramer acetate may also reflect reticence for conversion to a generic by patients and clinicians for clinical reasons,” they detailed.
The group predicted that the loss of patent protection for small molecule oral DMTs will most likely be the next major market change to affect growth in DMT expenditures. Novartis’ fingolimod and Biogen’s dimethyl fumarate both may experience generic competition soon, and generic manufacturers of teriflunomide (Sanofi) will enter the US market in 2023. Although, Biologic DMTs such as interferon are not expected to have this competition until at least 2026.
“Thus, pricing relief through additional generic DMT approvals or biosimilars is not imminent,” Hartung et al. concluded.
"After our study was completed, the company that introduced the second generic drug dropped its costs significantly, making it the lowest cost disease-modifying drug for MS on the market," Hartung said in a statement. "Despite this, there is an urgent need for more robust competition from generics within these MS drugs."3
Another recent study from 2019 corroborates these data, suggesting that the price of DMTs for MS patients has persistently risen over a 10-year period, with the introduction of additional therapies failing to contain out-of-control costs. Additional research suggests that clinical and financial considerations have already blurred, given out-of-pocket costs rank higher in priority for patient decision-making around DMTs than efficacy or safety.4,5 Ultimately, using Medicare Part D claims data, the 2019 study concluded that annual costs associated with self-administered DMTs for MS increased dramatically from 2006 to 2016, from a mean of $18,660 to $75,847, a mean increase rate of 12.8% yearly. This has resulted in a roughly 7-fold increase in out-of-pocket costs.
1. Hartung DM. Johnston KA, Geddes J, Bourdette DN. Effect of generic glatiramer acetate on spending and use of drugs for multiple sclerosis. Neurology. 2020;00:1-8. doi:10.1212/WNL.0000000000008936.
2. Hartung DM, Bourdette DN, Ahmed SM, Whitham RH. The cost of multiple sclerosis drugs in the US and the pharmaceutical industry: too big to fail? Neurology. 2015;84(21):2185—2192. doi: 10.1212/WNL.0000000000001608.
3. Study: MS drug costs nearly triple over 7 years, even with introduction of generic [press release]. Minneapolis, MN: AAN; Published January 15, 2020. eurekalert.org/pub_releases/2020-01/aaon-smd011020.php. Accessed January 15, 2020.
4. San-Juan-Rodriguez A, Good CB, Heyman RA, Parekh N, Shrank WH, Hernandez I. Trends in prices, market share, and spending on self-administered disease-modifying therapies for multiple sclerosis in Medicare Part D. JAMA Neurol. Published online August 26, 2019. doi:10.1001/jamaneurol.2019.2711.
5. Hincapie AL, Penm J, Burns CF. Factors associated with patient preferences for disease-modifying therapies in multiple sclerosis. J Manag Care Spec Pharm. 2017;23(8): 822-830.