The disease doesn’t have a cure, the chance of disability is near certainty, and the cost of vital drugs continues to ratchet upward. That’s the sort of clinical and financial vise that grips the hundreds of thousands of Americans living with multiple sclerosis and, to some extent, insurance companies and employers that pick up the tab.
Despite numerous drug options for MS—more than a dozen have been approved to treat the most common form—competition hasn’t kept a lid on prices. Quite the contrary, according to a much-cited pricing analysis published in 2015 in the journal Neurology.
Since the first wave of MS drugs was introduced in the 1990s at a price of $8,292 to $11,532 annually, their costs have skyrocketed by as much as 36% year after year, according to the Neurology study. (During that same stretch, overall prescription drug inflation ran 3% to 5% annually.) And newer drugs have kept pace. Nearly all of MS drugs today cost from roughly $63,000 to nearly $104,000 annually, according to an analysis published last year by the Institute for Clinical and Economic Review (ICER).
The price hikes have undermined the cost-effectiveness case for these drugs, which are designed to treat a debilitating central nervous system disease with an inherently unpredictable course. At these prices, paying for the drugs year after year far exceeds the cost of caring for a patient following a relapse, say researchers and prescription benefit managers. Existing prices would have to be slashed by 37% to 98% to meet a cost-effectiveness benchmark of spending $100,000 to $150,000 for each additional quality-adjusted life year (QALY), according to the ICER analysis.
Payers continue to foot the bill for ethical, legal, and contractual reasons, but “it’s really hard to mount an economic argument,” says Gary Owens, MD, a biotechnology consultant in Ocean View, Del., who has written extensively about MS cost trends. “For the individual patient, the ability to remain functional and to be able to drive, to be a parent, to go to work—all of that is a cost benefit to the individual. Payers don’t reap any of that benefit however.”
“When the drug costs $5,000 or $6,000 a month, 30% is a substantial amount to pay out of pocket that patients face,” says Daniel Hartung of Oregon State University.
Meanwhile, patients covered by insurance policies that have high deductibles or require patients to pick up a percentage of a drug’s cost are increasingly vulnerable to being priced out of affording the medication at all, says Daniel Hartung, lead author of the 2015 Neurology pricing study and an associate professor of pharmacy at Oregon State University College of Pharmacy in Corvallis.
“Patients are seeing higher and higher co-insurance, 28% to 30% co-insurance,” Hartung says. “When the drug costs $5,000 or $6,000 a month, 30% is a substantial amount out of pocket that patients face.”
Cost angst
The hue and cry against high drug prices is now part of the soundtrack about what ails American health care. But the agita over MS drug costs illuminates some of the challenges specific to autoimmune diseases.
The stakes are not immediately life and death, as they can be for patients with cancer. But once patients are diagnosed with multiple sclerosis, rheumatoid arthritis, Crohn’s disease, and many other autoimmune diseases, they must figure out how to pay for treatment that’s likely lifelong, with few options beyond taking drugs. One study published in 2013 found that drugs comprised two thirds of medical care costs for MS patients. A more recent analysis from Prime Therapeutics, the PBM, reported that the drug bill was nearly 81% of total medical costs.
The MS drugs in question are labeled as disease-modifying therapies (DMTs) because they’re designed to decrease or shorten relapses. Relapses occur when inflammation in the central nervous system damages the protective coating on the nerve fibers, causing symptoms such as weakness in the legs or vision loss. Other, less expensive drugs, such as steroids, might help to ease symptoms during a relapse.
Nearly all of the DMTs have been approved for the relapsing-remitting form of MS, which affects more than 80% of MS patients and is characterized by relapses followed by periods of recovery. Last year, the FDA approved Ocrevus (ocrelizumab), which was launched with a price tag of about $65,000 annually. The infused drug, which can be prescribed for relapsing-remitting MS, is also the first approved to treat another category of MS, primary progressive disease, which develops in 15% of patients. MS patients with primary progressive disease experience worsening symptoms often without any breaks or remissions.
Cost just adds to the challenge of keeping patients on DMTs, along with the side effects and efficacy questions, says Bari Talente of the National Multiple Sclerosis Society.
The drugs should be started as soon as possible following diagnosis to have the best chance of forestalling relapses, the American Academy of Neurology (AAN) emphasized in its latest guidelines, published earlier this year. But keeping patients on these drugs—already a challenge because of side effects and uncertainty about whether they’re working—is made even more difficult by the budgetary hit, says Bari Talente, executive vice president of advocacy at the National Multiple Sclerosis Society. In a 2015 survey of nearly 8,800 MS patients conducted by the not-for-profit patient advocacy group, 17% reported skipping doses or stopping treatment the prior year because of the cost.
PBMs are under fire these days for lack of transparency about manufacturer rebates and other discounts. But they are trying out measures to at least partially shield payers from steep MS prices.
Starting this year, Express Scripts has implemented a program that reimburses payers for up to half of the amount they’ve already spent on a DMT if the patient stops taking it within the first three months. The MS program, which requires the drugs to be filled through Express Scripts’ specialty pharmacy, will also provide support for patients through those initial months, including education about potential side effects.
Roughly a fourth of patients stop the medication in that initial stretch, according to the PBM. “If 25% of new patients are discontinuing therapy, that’s a lot of waste that plan sponsors are paying for where we know patients won’t benefit,” says Harold Carter, senior director of clinical solutions at Express Scripts.
This summer, CVS Health announced a program that would allow any of its payer clients to exclude a newly launched drug—outside of “breakthrough” drugs—with a cost that, using ICER analysis, exceeded $100,000 per QALY.
Owens was dubious that the CVS Health move would provide much relief for payers, given that nearly all existing MS drugs far exceed that QALY benchmark. “I don’t think any payer on record or any employer is going to say, ‘Well, these drugs are not cost effective, so we’re not going to pay for treatment of MS patients.’”
Adherence economics
ICER’s analysis also highlighted some gaps in what’s understood about DMTs—starting with the limited time frame of the clinical trials, typically one to two years. While that study duration is not uncommon, it makes it particularly difficult to gauge a drug’s benefits and harms for a disease that unfolds over decades, says Dan Ollendorf, chief scientific officer for ICER.
Another significant knowledge gap that Ollendorf cites: Little research has delved into the optimal sequencing for these drugs. For instance, he says, “to understand whether patients do better if they start on an interferon first and then go to something more targeted, or vice versa.”
In guidelines released earlier this year, AAN leaders by and large didn’t recommend certain drugs over others for relapsing-remitting MS. (One exception: They suggested a short list of drugs—Lemtrada [alemtuzumab], Gilenya [fingolimod], and Tysabri [natalizumab]—for patients with signs of highly active MS.) Instead, the professional group provided a consumer-friendly summary of medications sorted by alphabetical order, with details about their side effects, method of administration, and strength of evidence in preventing relapse.
By contrast, ICER took a shot at ranking the drugs by their clinical effectiveness. Lemtrada, Tysabri, and Ocrevus were identified as most likely to reduce relapses, followed by other drugs based on their relative effectiveness. But will this ICER drug guidance influence payer choices? At this point, because all of the drugs cost roughly the same and there are no standout options, payers will be more influenced by discounts and rebates in sorting out their preferred drug options, says Hartung, the author of the Neurology pricing study.
Manufacturers try to make the case that payers will reduce other MS-related expenses by spending money on medications, Owens says. But the reality is that the worsening of the disease, even as disability becomes more advanced, is not terribly costly from a payer perspective, he says. A patient might be briefly hospitalized in the event of a severe relapse. Other spending includes low-cost drugs like steroids and the purchase of a wheelchair or other medical equipment.
Patients can still relapse even when they’re faithfully adherent to DMTs, and that can be very costly, says Patrick Gleason of Prime Therapeutics.
Besides, patients can still relapse even while faithfully taking one of the DMTs, according to a cost-effectiveness analysis by Prime Therapeutics, which looked at relapses in 991 patients. During the three-year period Prime analyzed, 18.2% of adherent patients had relapsed versus 24.9% among those who weren’t adherent. The medical bill for a relapse was nearly $9,000, according to an abstract presented at a meeting earlier this year.
The bottom line: Drug adherence would have to be improved for 15 patients over three years—at a cost of about $3 million—to prevent a single $9,000 relapse. These findings align with ICER’s recent cost-effectiveness MS analysis, notes Patrick Gleason, senior director of health outcomes at Prime Therapeutics. “Our findings in a sense concur with that—the value is hard to see,” he says.
Payers have responded to rising prices by limiting the number of MS drugs on their preferred list, with only a few options that often include an interferon and an oral medication, Owens says. Otherwise, patients and their doctors must navigate prior authorizations and other plan designs, such as a step-therapy approach that requires patients to “fail” on a preferred drug first before trying another.
Dan Ford blames preauthorization hurdles with spurring further and potentially avoidable deterioration of his disease. When the military veteran was diagnosed with MS three years at age 49, his Kansas neurologist recommended that he start on the infusion drug Tysabri immediately because of the apparent severity of his disease as indicated by his having symptoms and two lesions already detectable on his brain.
But it took nearly three months—and a series of physician appeals—before Ford’s insurer approved coverage of the drug. By then, Ford was quite ill and weak and needed to be hospitalized for several days. MRI scans showed that two more lesions had appeared on his spinal cord. He’s been largely reliant on a wheelchair since then. No additional lesions have appeared, he says.
“How I look at it is that those second two lesions cost me my legs,” Ford says. “And put a price tag on that?”
A generic option has entered the MS market in recent years. Two manufacturers—Mylan and Sandoz—are marketing generic versions of Copaxone (glatiramer acetate). They are priced 20% lower than Copaxone, says Hartung. That helps but it’s not a huge, dent-making difference. Typically it takes four to six manufacturers before competition starts to drive down costs significantly, notes Hartung.
As they proliferate, though, generics could be influential. In their 2015 Neurology pricing analysis, Hartung and his colleagues speculate that the prices for TNF inhibitors haven’t followed the same arms race price trajectory as MS drugs, perhaps in part because those drugs compete with methotrexate and other generic medications.
Has Ocrevus set a good example?
Negotiating clout also can make a difference. At the Veterans Health Administration, which can negotiate prices, DMTs cost about a third less than what Medicaid pays, according to the 2015 Neurology analysis. In a campaign targeting high drug prices, launched in 2016, the MS society recommended that Medicare be given that same negotiating clout. Some of its other proposals target payers and insurance design, among them spreading out patients’ out-of-pocket drug costs more evenly over the year and not placing all drugs on the same specialty tier.
“When you have all of the available products on a specialty tier that typically comes with co-insurance, you have no alternative,” says Talente at the MS society. “You need your medication.”
Talente was among those interviewed who pointed to Ocrevus—introduced in 2017 at a wholesale acquisition cost that is nearly 20% less than the market average for DMT drugs—as perhaps a bit of a break in the pricing fever. “It was hugely encouraging—it shows that it can be done,” she says.
The drug could have been introduced at a “premium price,” Owens agrees. The infused medication has a lot of clinical strengths to promote, including that it’s the first approved for primary progressive MS and that it’s been shown to be more effective than one interferon.
Perhaps Genentech’s pricing reflected a well-thought-out positioning strategy to try to grab a hefty market share right out of the gate, Owens says. Or it might indicate, at least in part, a manufacturer’s sensitivity to the current pricing environment, he says.
“This nuclear arms race in continuously escalating MS costs is leading us to a position that’s very difficult for the patient, the employer, the payer, and even the manufacturer to justify,” Owens says. “One would like to think that they listened.”
