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Host – Dan Keller

Hello, and welcome to Episode Ninety of Multiple Sclerosis Discovery, the podcast of the MS Discovery Forum. I’m Dan Keller.

 

Welcome to the weird world of the U.S. pharmaceutical market. A few outrageous cases of drug price gouging have made the headlines, but in multiple sclerosis, a more serious concern is the steady annual rise in cost of all disease-modifying therapies, or DMTs. So says Dr. Daniel Hartung, a researcher at the Oregon State University/Oregon Health and Science University College of Pharmacy. In a recent study, he found that MS drug prices over time outpaced both inflation and similar biologics. It’s not just the new drugs. As each more expensive DMT comes to market, the prices of older drugs also race to catch up. It’s affecting the drugs available to patients and causing other concerns.

 

Interviewer – Carol Morton

Can you tell me what questions you were asking and why?

 

Interviewee – Daniel Hartung

Sure. So the study that we did had its origin after having some conversations with some neurologists at OHSU about increasing frequency of seeing their patients facing larger and larger, not only cost sharing and copays from the insurance companies for drugs for MS, but also increasing restrictions, typically from insurance companies in kind of what medications they were supposed to take first prior to perhaps failing one, then going to another medication for MS. And so this is all kind of happening in the context of what they were seeing as just higher prices for some of these medications.

 

And so what we decided to do is…no one's really done this…is look at in a systematic way the trajectory of pricing for MS drugs, essentially since their approval until we went through the end of 2013. And to look at what the just general trend was, try to figure out if there were certain specific factors that were associated with higher prices over time, like the approval of newer agents, things like that. That was kind of the general objective of the study.

 

MSDF

And then how did you go about conducting this study? Is it hard to find that data?

 

Dr. Hartung

It can be. So I'm fortunate to have access to some data set that has longitudinal pricing data for pharmaceuticals for the past 30 years or so. And so from my perspective, it wasn't difficult. But essentially we used this data set that collected average wholesale price, as well as wholesale acquisition cost, so kind of the two usual, most common (I'll call them) sticker prices for drugs. And so this data set for all medications, it kind of tracked pricing of medications over time. And so that was the core data set for our analysis.

 

MSDF

And so you pulled the multiple sclerosis disease-modifying therapies out of that. How many did you look at?

 

Dr. Hartung

So in our study we looked at 11 medications for MS. They included the three what are typically called platform therapies that have been on the market for about 20 years now. Those include Avonex, Copaxone, and Betaseron, and just followed them through time, through the approval of several other new agents, like Tysabri. And then there's in the last five to six or seven years, the FDA has approved several agents that can be taken orally, Gilenya, Aubagio, and Tecfidera now. And there was a couple other kind of miscellaneous agents that were kind of variants of the interferons and things like that.

 

MSDF

And then what did you find?

 

Dr. Hartung

Well, there are several interesting things, but I think one of the most striking things is that the prices for the platform therapies, Avonex, Betaseron, and Copaxone, were pretty stable for at least 10 years from their approval in early to mid-90s. And then, essentially what we observed is that new agents that came on the market, starting with Rebif in about 2001, came out, and they were usually priced about 20% to 30% higher than the existing therapies. And what we observed is that when these new agents came out or approved, that these higher prices, the cost or the price of kind of the platform therapies quickly escalated to almost match the price of the newer agents that were approved. And this pattern kind of repeated itself and actually became more intense when the newer oral agents came on the market in the last five or six years.

 

So the cumulative effect of that is in the early 2000s, Copaxone, Betaseron, and Avonex were priced about $10,000 to $15,000 a year. And at the end of our study, all of the agents that are currently approved were priced between $50,000 and $60,000 per year. And so we tried to quantify kind of the rate of increase and compare that with other kind of benchmarks: inflation, prescription drug inflation. What we found is that the price increase for those agents was well above what you'd expect for not only just general inflation, but also prescription drug inflation.

 

MSDF

MS drugs, the cost of all of them, not just the new ones, are increasing at a rate higher than any other drug category?

 

Dr. Hartung

In addition to looking at kind of standard metrics of inflation, we compared the price increases for the platform therapies to what we considered kind of comparable biologics. So we looked at a class of medications called tumor necrosis factor inhibitors, which are used for immunologic conditions like rheumatoid arthritis. And what we found is that the price increases for the platform therapies for MS increased substantially and significantly above price increases for those medications for the tumor necrosis factor inhibitor. So from our study, from our perspective, prices increased higher than they did for these TNF inhibitors.

 

We haven't really compared them across other classes of drugs, but there are some new publications that have looked at price increases for other agents, such as in other classes like insulin, drugs for diabetes, and cancer agents as well. The numbers are slightly different, but the trajectories look pretty similar. So in the last, you know, 10 years, there's been almost it seems like a logarithmic increase in the price of many of these agents and classes.

 

MSDF

So is this a case of a system that has incentives that maybe aren't as well matched to patient needs as they should? What's going on here?

 

Dr. Hartung

I mean, that's a good question. Definitely there's a system. The market-based system for pharmaceuticals in the United States is incredibly dysfunctional in that it's very dissimilar from any other kind of consumer market for technology, phones, cars, things like that, where you typically see prices go down after a while. And you don't see that in health care or in drugs. You see just prices increase. And so there's a dysfunction that just kind of is core to the economics of health care.

 

And then I think there is an element of pharmaceutical industries pricing these agents essentially what the market will bear. Now my opinion is that a lot of the aggressive increases in price were initially seen with some of the cancer agents. And so I think that in that field there is a kind of pushing of the envelope for many anti-cancer drugs that's now has proliferated to other classes of drugs, including MS agents.

 

The other element that's kind of unclear and adds to the murkiness to this is that, you know, our study and other studies that have looked at what I'm calling pricing of the agents use average wholesale or WAC and with some sort of adjustments for rebates or discounts. So typically third party payers or pharmaceutical benefits managers will negotiate with pharmaceutical industry to lower the cost of the agent for the payer. But all that information is typically proprietary, and so it's really difficult to know what the actual cost of the medication is, unless you're paying cash. If you're paying cash, then the cost is going to be pretty close to the price that's set. So people who don't have insurance are paying the most, and the people with insurance, Medicaid, any sort of governmental insurance, they're paying typically AWP minus a certain proportion or WAC plus a proportion percentage essentially based on the rebate that they get.

 

So that adds a little bit of kind of uncertainty. Pharmaceutical industry may come back to say that, you know, we're giving pretty good discounts on certain medications in certain payers, but from the data we have and the pricing data, there's just been this aggressive increasing in prices. And we don't know if it's being mitigated by increasing rebates and discounts over time. So it's complicated.

 

MSDF

What do you hope people will do with this information? It does sound like a complicated system that's almost unapproachable for the individual patient or individual doctor. What can people start doing now? Where does the responsibility or responsibilities lie?

 

Dr. Hartung

You know, I think that the data we generated in our study has been useful for some of the advocacy groups in the multiple sclerosis community. So the National Multiple Sclerosis Society has been using it to try to, you know, advocate or perhaps political reforms or some other meaningful reforms in kind of how these things are reimbursed, things like that. Drug prices has been in the news quite a bit over the last several years, and now even more with the election season in full tilt. And so I think a lot of the candidates are talking about potential solutions to the issue.

 

From the patient's perspective, they're in a real quandary in a sense that even a sharp move with the Affordable Care Act to a lot of high deductible, high