Medicare Rules, Higher Cost-sharing Load Increase Out-of-pocket Spending for MS Therapies, Study Reports

Restrictive access policies by Medicare and a rising cost-sharing burden lead to an increased price of disease-modifying therapies (DMTs) for multiple sclerosis (MS) patients, according to new research.

The findings also revealed that Medicare beneficiaries without a low-income subsidy may spend on average $6,894 for their MS treatments in 2019, with generic versions of Copaxone (glatiramer acetate) representing the highest burden.

The research, “Trends In Coverage For Disease-Modifying Therapies For Multiple Sclerosis In Medicare Part D,” was published in the journal Health Affairs.

Approximately 25-30% of patients with MS are covered by Medicare through disability. In 2013, MS Medicare beneficiaries with MS and without low-income subsidies averaged $4,389 a year in out-of-pocket expenses, second only to hepatitis.

Despite a greater number and diversity of DMTs for MS treatment, their price has increased substantially over the past two decades. In fact, expenses related to DMTs for MS are among the highest by class in the Medicare market.

“It’s a dysfunctional market that lacks the typical incentives for most other consumer prices,” Daniel Hartung, the study’s lead author, said in an Oregon Health & Science University (OHSU) press release written by Erik Robinson.

“Aside from the public optics, there are few incentives for companies not to raise prices. Most intermediaries in the drug distribution channel, including drug companies, benefit from higher prices,” Hartung said.

These high prices may lead to reduced access, as insurance companies can restrict coverage or manage use through prior authorization or step-therapy policies, and high deductibles or cost-sharing components in health plans that increase the financial burden for patients.

Now, a team at OHSU and the Oregon State University College of Pharmacy used prescription drug plan formulary files to analyze changes in coverage policies from 2007 to 2016, and to estimate out-of-pocket spending for DMTs for MS within Medicare Part D program, through which outpatient prescriptions are financed.

Eleven DMTs available during the study period were analyzed. Tysabri (natalizumab, by Biogen) and Lemtrada (alemtuzumab, by Sanofi Genzyme) were not part of the analysis because they are delivered via intravenous infusion in the clinic setting, and are typically covered through Medicare Part B.

Results revealed that the price for Betaseron (interferon beta-1b, by Bayer), Copaxone 20 mg (glatiramer acetate, by Teva), Rebif (interferon beta-1a, by EMD Serono), and Avonex (interferon beta-1a, by Biogen) — the four therapies available in 2007 — quadrupled over the 10-year study period.

Except for Copaxone 40 mg and its 20 mg generic formulation (Glatopa, by Sandoz), prices for the other DMTs introduced after 2007 increased by 9–13% per year. These include Novartis’ Extavia (interferon beta-1b) and Gilenya (fingolimod), Biogen’s Plegridy (peginterferon beta-1a) and Tecfidera (dimethyl fumarate), and Sanofi Genzyme’s Aubagio (teriflunomide).

In 2007, 99-100% of plans covered the four available medications, with the exceptions being Rebif (88%). These percentages fell to 54-89% in 2016. Coverage of the other DMTs varied between 21% (Extavia) to 92% for Copaxone 40 mg. In turn, coverage for the three oral options — Gilenya, Aubagio and Tecfidera — generally increased or was maintained over time, ranging from 46% for Aubagio to 83% for Gilenya.

The use of prior authorization increased from 61-66% in 2007, to 84-90% in 2016. Also, the share of plans with at least one DMT available without limitations declined from 39% to 17%. The average projected out-of-pocket spending for 2019 across DMTs was $6,894.

The highest projected out-of-pocket expenses ($8,219) are associated with generic glatiramer acetate, both Glatopa and Mylan’s 20 mg/mL and 40 mg/mL generic formulations, approved by the U.S. Food and Drug Administration in 2017. This is more than with any of Copaxone’s formulations.

According to the team, this is the result of a higher coinsurance payment (37% vs. 25%) expected for generic medications compared to brand-name options, as well as the fact that manufacturers of generics do not provide discounts toward a beneficiary’s total out-of-pocket spending, unlike what is mandated by the Affordable Care Act for brand-name therapies.

“This is a pernicious effect of the release of a generic and an unfortunate effect of Medicare rules,” Dennis Bourdette, MD, one of the study’s co-authors, said.

A proposal by U.S. President Donald Trump’s administration addresses this by eliminating manufacturer discounts from the calculation to determine a patient’s total out-of-pocket spending. Such strategy would reduce the disparity between brand-name and generic therapies, the researchers said.

“In this study we found that Medicare beneficiaries with MS who require a [DMT] face considerable policy-related access restrictions and high out-of-pocket spending,” the researchers wrote. “There is an urgent need for policies that slow the growth of drug prices, improve access, and shield patients from excessively high out-of-pocket spending,” they concluded.