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Biotechnol Healthc. 2010 Winter; 7(4): 26–27.
PMCID: PMC3008386

Oral Multiple Sclerosis Agents Look To Gain Market Share

JOHN CARROLL, Senior Correspondent

When Novartis rolled out its pricing plan for its new oral multiple sclerosis drug fingolimod (Gilenya), long-time U.S. Food and Drug Administration analyst Ira Loss was forced to do a double take.

Styled as a direct competitor to Avonex, an injectable drug marketed by Biogen Idec and one of two interferon beta-1a drugs now on the market, Novartis put a $4,000-a-month price tag on the oral therapy. That’s actually about 20 percent more than the average cost of Avonex. But it could still turn out to be much cheaper for MS patients, because Novartis also said it would cover up to $800 a month of a patient’s out-of-pocket expenses, eliminating the 20 percent coinsurance that typically applies to the most expensive therapies on the market.

And that’s not all. Novartis is assigning “nurse navigators” to patients who can sign up independently or through their doctors for its payment program. There’s $600 to cover a patient’s costs for needed tests and monitoring. And the company also is providing the treatment free to anyone without insurance who is living on income up to 500 percent of the federal poverty level.

“This could well be precedent setting,” says Loss, who keeps a trained eye on the FDA regulatory process. “At the drug’s advisory committee meeting, doctors and clinicians who treat these patients said they have many patients with such fear of needles that they choose not to get any therapy whatsoever rather than have to endure regular injections. I found that to be eye opening in a way. There’s an untapped demand out there that Novartis obviously knows about.”

The new oral drugs in biopharma’s late-stage pipeline have some big advantages over the injectable and infused drugs they intend to replace. There’s a claim of easier administration, often replacing a trip to the doctor’s office. And, as Loss noted, patients who fear the needle often spurn even self-injectables.

But with fingolimod’s rollout, some payers are being placed in the

“The key issue is whether a patient feels better and makes less of a demand on the healthcare system at large. Those are the things we’re seeing payers and providers think about.”

— Todd Evans, PricewaterhouseCoopers

position of re-evaluating whether the new oral biologics will come with a price advantage that extends past consumers and straight to their own budgets. If those drugs prove to be more effective than some of the biologics now available and come with an improved set of risk factors, some of those new oral drugs may wind up costing payers significantly more, even as they swiftly command a significant amount of market share.

Making a bet

Earlier this year, the fingolimod team at Novartis was engaged in one of the hottest late-stage development races in the biopharma industry. At one point, they were widely considered to be lagging behind Merck KGaA, a German company that had high hopes for cladribine, another oral MS drug that worked to treat the disease through a separate mechanism of action. Together, they represented the first new oral drugs for MS — major competition for the injectables and infused therapies that dominate the field.

Jeffrey A. Cohen, MD, director of experimental therapeutics at the Mellen Center for Multiple Sclerosis at the Cleveland Clinic and a lead investigator on the program, tested two different doses of fingolimod on more than 1,000 patients, with one arm taking Avonex. The new drug reduced the relapse rate anywhere from 38 to 52 percent compared with the Avonex arm.

While fingolimod went on to an approval, cladribine has been significantly delayed, giving Novartis a clear shot at consolidating its position in the marketplace before the German Merck can catch up.

But increasingly, says Todd Evans, an expert on pharma sales and marketing strategies at Pricewaterhouse-Coopers, market dominance in the drug industry isn’t decided by a single factor. Instead, he says, drug choices are being shaped by a more nuanced blend of three key issues: Clinical outcomes for patients, the economic argument on the overall cost of treatment, and the impact a therapy has on the patient’s quality of life.

“The big advantage the oral has is that it requires less oversight,” says Evans. “The concept of treating a patient in the lowest-cost venue is not going away — orals facilitate that far better than infused or injectable drugs, so long as the side effects are manageable. If the oral’s side effects are worse, then its advantage is highly debatable.”

“The key issue,” he adds, “is whether a patient feels better and makes less of a demand on the healthcare system at large. Those are the things we’re seeing payers and providers think about.”

Payers also are making great progress in controlling the cost of infused therapies, says Evans. The professional services fee charged by doctors for administering a biologic often has been bundled with the price of the therapy, allowing them to charge stiff premiums. However, payers are kicking back by uncoupling the two to prevent physicians from marking up the cost of the drug.

Against that backdrop, Evans sees a huge shift in the way providers are being reimbursed. Increasingly, the quality of care a patient gets is directly related to a provider’s reimbursement. Pay-for-performance programs are accelerating the process as health reform speeds the movement away from fee-for-service, which Evans dubs as “quality agnostic.” Instead of focusing on a particular service and attaching a payment to it, payers like Medicare as well as health plans want to see better quality and better outcomes, which lowers overall costs.

If an oral drug manufacturer can make the argument that the future consumption of overall healthcare dollars will be reduced and that their drug will deliver a clinically better result, as well as improve the patient’s quality of life, then their agent will be preferred over competing therapies in the market, Evans says. But seemingly small details can scramble the message. If, for example, an oral drug has to be taken twice a day, that’s going to be a harder argument to make than advocating an oral therapy that has to be taken just once a month.

In some cases, usually when all else fails, manufacturers are likely to turn to discounts to win market share.

The resistance to price competition

For autoimmune diseases, disease-modifying drugs are booming.

Decision Resources expects that disease-modifying agents that treat rheumatoid arthritis, which now account for about $5 billion in drug costs, will see overall sales jump to $7 billion in 2019. And there is a slate of new oral drugs in late-stage development angling for a piece of the growing pie.

“[The price of] these new oral drugs will come in at a slight decrease to tumor necrosis factor-α inhibitors” like adalimumab (Humira), certolizumab (Cimzia) and etanercept (Enbrel), predicts Decision Resources analyst Kyle Crowell. While the biologics cost $30 to $55 a day, an oral drug that delivers a 10-to-30 percent discount on the cost of chronic illnesses becomes extremely competitive. Because the disease is so expensive, to decrease the price even a little can be a huge benefit to a payer.

“For the most part,” he adds, “an oral drug would be preferred.”

But the argument about cost and convenience that Crowell expects to see isn’t as simple. An injectable drug that can be dosed once a week or once a month could be preferred to an oral drug taken twice a day. Physicians also are quite familiar with the injectables, both in the health benefits they offer patients and their side-effect profiles.

“There are two major issues in the phase 3 trials of oral therapies being developed for RA: The effect on structural damage to the joints and on safety — in particular safety regarding increases in cholesterol, serious infections, and hypertension,” as well as other key indicators like a spike in liver enzymes, says Crowell. “Those are the issues physicians and the FDA will really look at.”

But don’t expect to see biologics drop in price anytime soon.

“That may happen when bio-similars become available, not in response to the oral therapies,” says Irene Koulinska, Crowell’s fellow analyst at Decision Resources.

Just because the new oral drugs are beginning to compete with injectable and infused therapies doesn’t mean that the enthusiasm evident for some of the intravenous therapies now in late-stage development has been blunted. Even as fingolimod reaped headlines for its attention-grabbing approval by the FDA, Genzyme attracted considerable attention from the MS community with some startling signs of long-term efficacy for its late-stage drug alemtuzumab.

Infused in two or three annual cycles of not more than five days per cycle, nearly 90 percent of the patients taking the drug in a phase 2 study stretching over five years were free of sustained accumulation of disability with better disability scores and lower relapse rates than the trial’s Rebif arm (the other interferon beta-1a drug on the market).

For MS patients and others suffering from a painful chronic ailment, the next few years could see a significant shift in preference as patients gravitate to the best drug, with the lowest out-of-pocket expense that frees them from disabling symptoms for the longest periods — regardless of whether the drug is oral, injected, or infused.

Articles from Biotechnology Healthcare are provided here courtesy of MediMedia, USA