Study Outlines Alarming Inflation Of MS Drug Costs Over Past Two Decades

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cost of MS drugs

Researchers at Oregon Health & Science University (OHSU) College of Pharmacy and Oregon State University (OSU) at Corvallis, and Veterans Affairs Medical Center in Portland, Oregon, have documented an “alarming rise” over the last 20 years in the costs of drugs used to slow the progression of multiple sclerosis (MS) or reduce frequency of attacks, in some instances by more than 700 percent. This price escalation has continued to soar even as newer drugs have come to the market — a factor that normally could have ben expected to stabilize or reduce the cost of at least older MS medications.

However, in this case a substantial increase in the number of MS drugs available in the marketplace over the past two decades has emphatically not resulted in lower or stabilized costs for patients who use those drugs, and the OHSU/OSU researchers paradoxically discovered that the costs of all drugs used to treat MS including first-generation therapies have continued to skyrocket.

Their findings were published online before print in an Open Access article in the May 26, 2015, issue of the American Academy’s medical journal Neurology.

The Neurology study, entitled The cost of multiple sclerosis drugs in the US and the pharmaceutical industry – Too big to fail? (April 24, 2015, Neurology, doi: 10.1212/WNL.0000000000001608), is coauthored by Daniel M. Hartung, PharmD, MPH, Dennis N. Bourdette, MD, Sharia M. Ahmed, MPH and Ruth H. Whitham, MD

The researchers’ objective, in response to mounting concerns about the affordability of drugs used to treat MS, was to examine the pricing trajectories in the United States of disease-modifying therapies (DMT) for multiple sclerosis over the last 20 years and assess the influences on rising prices.

The researchers found that there are no multiple sclerosis drugs now available in the United States with a list price below $50,000 a year, which is two to three times greater than the price of the same or similar drugs in Canada, Australia or the United Kingdom. The cost of the group of drugs available to treat MS has risen in price at rates five to seven times greater than the normal rate of drug inflation in the U.S.

The coauthors say their findings in this study also point to a systemic dysfunction in the U.S. pharmaceutical industry that is affecting more than just drugs for multiple sclerosis, noting that enormous, uncontrolled and rapidly increasing prices for some types of drugs may be linked to non-transparent drug pricing policies, a dysfunctional market and lack of a national healthcare system to negotiate prices more aggressively and directly with pharmaceutical companies. The end result, they conclude in the report, may be another industry “too big to fail.”

The researchers examined 20 years of drug pricing data for nine MS drug treatments beginning with the initially approved injectable medications, up through the approval of the newest oral drugs, estimating annual drug cost trends for the 9 DMTs using published drug pricing data from 1993 to 2013. They then compared changes in DMT costs to general and prescription drug inflation during the same period. They also compared cost trajectories for first-generation MS DMTs interferon (IFN)-1b, IFN–1a IM, and glatiramer acetate with contemporaneously approved biologic tumor necrosis factor (TNF) inhibitors.

They determined through this research that first-generation DMTs, originally costing $8,000 to $11,000 annually, now cost approximately $60,000 per year, the price of these agents having increased at annual rates five to seven times higher than general prescription drug inflation. Newer DMTs commonly enter the market costing 25 percent to 60 percent more than existing DMTs. The coauthors note that significant increases in first-generation DMTs’ cost trajectory occurred following Food and Drug Administration approvals of IFN–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, and DMT costs in the United States currently are 2 to 3 times higher than in other comparable industrialized countries with similar cultures and standards of living where MS drug costs were often more than 70 percent lower than U.S. costs. However, one major distinction is that Canada, Australia or the United Kingdom all have national single-payer health care systems.

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The researchers also examined costs paid by the U.S. Department of Veterans Affairs (VA) because of its ability to negotiate discounts directly with manufacturers. Their analysis shows that on average costs for the VA were 36 percent less than those paid by Medicaid, including a nearly 80 percent discount for Betaseron. This cost disparity suggests the sharp rise in U.S. prices is not the result of increases in manufacturing costs. The lack of transparency within pharmaceutical pricing and purchasing, and the absence of a national health care system within the U.S. to negotiate prices directly with the pharmaceutical industry may have contributed to the soaring costs of these drugs, the investigators suggest.

“The simplest explanation is that pharmaceutical companies raise prices of new and old MS disease modifying therapies in the United States to increase profits, and our healthcare system puts no limits on these increases,” the researchers write in their report. “The U.S. Medicare program, the largest single-payer healthcare system in the U.S., is legally prohibited from negotiating drug prices directly with the pharmaceutical industry.”

bourdetteD“This study confirms what many of us treating patients with MS had suspected: The pricing trajectories of MS drugs are unsustainable for our health care system and need to be addressed,” says Dennis N. Bourdette, M.D., F.A.N.A., F.A.A.N. , co-author of the study and chair of the Department of Neurology in the OHSU School of Medicine and executive director of the Multiple Sclerosis Center at OHSU.

The researchers conclude that MS DMT costs have accelerated at rates well beyond inflation and substantially above rates observed for drugs in a similar biologic class, and contend that there is urgent need for clinicians, payers, and manufacturers in the United States to confront the soaring cost of DMTs.

The full text of the study is available in PDF format here:

HartungD“The inexplicable increase in the cost of MS drugs, particularly older, first-generation drugs, is at odds with how we think the marketplace should work. A growth in the number of MS drugs should lower costs for patients. What we see here is the opposite happened: costs have risen sharply, and at a pace that’s far greater than drugs in a similar biologic class,” says Daniel M. Hartung, Pharm.D., M.P.H., lead author of the study and an associate professor in the Oregon State University/Oregon Health & Science University College of Pharmacy in a release. “The issue of astronomical drug costs, especially for newer drugs or rare conditions, is more and more common,” Dr. Hartung continues. “There are often several drugs in a class available to treat a disease or condition, and ‘economics 101’ would suggest that competition should lower prices. In the pharmaceutical industry we often don’t see that. Many professionals now believe that it’s time to push back, to say enough is enough.”

The study coauthors note that escalating costs for specialty pharmaceuticals used to treat conditions such as multiple sclerosis, cancer, and hepatitis C have been a growing concern among many in the health care industry, raising skepticism about the ethics of the current system’s approach, exorbitant pricing and consequent increased burden placed on “our already stressed healthcare system.”

In the specific case of multiple sclerosis, the research looked at the cost of first-generation drugs such as Betaseron, Avonex and Copaxone, which became available in the 1990s at prices ranging from $8,000 to $10,000 a year, now cost approximately $60,000 annually — an average increase of 21 to 36 percent. For example, one drug that originally cost $8,700 now costs $62,400 a year. More competition from other drugs then entered the field. But instead of the price of the original drugs staying about the same or going down, as classic economic theory might dictate, their price soared corresponding with approval of newer agents like Gilenya, Aubagio, and Tecfidera, which have increased in price 8 to 17 percent annually since their approval. During that same period, general and prescription drug inflation only increased 3 to 5 percent per year.

The cause for escalation in the cost of these older drugs is unexplained and “alarming,” the researchers say. “Pricing in the pharmaceutical industry increasingly is a case of whatever the market will bear,” Dr. Hartung contends. “We used to think that any drug with $1 billion in sales was a blockbuster, but last year a drug for hepatitis C had 10 times that, or $10 billion in sales. This does not necessarily mean that drug research and innovation will be 10 times better.”

Dr. Hartung’s research focus involves evaluating population level use of prescription drugs using large automated datasets, studying the impact of drug policy on health outcomes, pharmacoepidemiology, and health economics. Areas of specific study include evaluating cost-sharing policies, drug prior authorization policies, and examining drug safety issues using observational epidemiological techniques. He also practices as drug policy analyst for the College’s Drug Use Research and Management group.

WhithamR“As a doctor, I’m deeply concerned about making sure these life-changing drugs are within reach for patients. The driving force behind this study was our experience that the high cost of MS drugs interferes with our ability to take good care of our patients,” says Ruth H. Whitham, M.D., F.A.A.N.. , co-author of the study, professor of neurology in the OHSU School of Medicine, and co-founder of the Multiple Sclerosis Center at OHSU. “We decided to shine a light on this growing problem so that those of us who care for patients with chronic illness can work together and advocate for changes to drug pricing mechanisms.”

There’s some evidence that generic drug growth might slow the rising drug costs in the U.S., the researchers say, but so far most multiple sclerosis drugs are not exposed to price competition from generics. For patients, soaring costs of these drugs threaten access to treatment, the study coauthors found, noting that initial denials of insurance coverage for multiple sclerosis drugs, for both new and established patients, occur much more often now than in the past,often requiring multiple approval steps for patients and their neurologists.

Dr. Hartung suggests that, absent other major changes in the health care system, public awareness and involvement may be an important first step toward remediation. “The court of public opinion is pretty powerful,” he observes. “We need to shed some light on this issue and do something about it.”

The Neurology study coauthors concluded that “it is time for neurologists to begin a national conversation about unsustainable and suffocating drug costs for people with MS – otherwise we are failing our patients and society.”

Oregon Health & Science University is a nationally prominent research university and Oregon’s only public academic health center. It serves patients throughout the region with a Level 1 trauma center and nationally recognized Doernbecher Children’s Hospital, and operates dental, medical, nursing and pharmacy schools that rank high both in research funding and in meeting the university’s social mission. The OSU/OHSU College of Pharmacy prepares students to be pharmacy practitioners and pharmaceutical sciences researchers able to advance societal health through leadership in pharmacy education, research, community engagement, and improved patient care.

The study can be found on the website of the journal Neurology.

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One comment

  1. To blame the rising costs of drugs primarily on the lack of a National Healthcare System in the U.S. is presumptive. Other countries that enjoy lower costs also have more restrictive tort laws keeping lawsuit costs lower. In the US, product liability lawsuits result in significant legal costs whether or not the lawsuits have merit. Contingency fees allow litigants to file lawsuits with impunity, and attorneys that file groundless suits rarely encounter punitive action. As a result, many lawsuits result in a cash settlement even when the allegations are groundless. It’s cheaper than defending the allegations.

    This isn’t the sole cause of the spiraling costs, but plays a significant role.

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