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New Supreme Court Case & the Complicated Accounting of MS Drugs

Shaw, Gina

doi: 10.1097/01.NT.0000450195.33885.84
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The Supreme Court has agreed to take on Teva's challenge to a lower court ruling that allowed for generic competition to its patent on the multiple sclerosis (MS) drug, glatiramer acetate. The case underscores the complicated pricing tactics for MS drugs and complex policies by health insurers, which dictate which drugs must be used and “failed” first before approving reimbursement for others.

The United States Supreme Court agreed on March 31 to hear a bid by Teva Pharmaceuticals to revive its patent on the multiple sclerosis (MS) drug glatiramer acetate, which is set to expire in September 2015.

Other Teva patents on glatiramer acetate (Copaxone), which accounted for $3.2 billion in US sales in 2013, expire in May, and generic competitors Mylan/Natco and Momenta/Sandoz are hoping to launch their own versions of the drug soon afterward — assuming they receive approval by the Food and Drug Administration (FDA), which at press time had not yet been granted to either.







The Supreme Court won't hear the case until their next term, which begins in October, so the Israeli-based pharmaceutical company, Teva — ironically, the world's largest manufacturer of generics itself — had asked them to intervene in the meantime and bar any generic competitors from entering the market while the case is pending. But on April 18, the Supreme Court denied that request.

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At the same time, Teva has introduced a new formulation of its glatiramer acetate that requires injection only three times a week, instead of daily. Approved by the FDA in late January, this new version — which costs about $400 a month less than the $5,000 price tag the company puts on the original drug — would not be subject to competition from generics.

Teva had been racing the clock to get as many of the approximately 85,000 Americans currently receiving “original” glatiramer acetate switched over to the three-times-a-week incarnation by May, in case the Supreme Court hadn't intervened in their favor.

Given the April decision of the Supreme Court, many of the patients still taking daily glatiramer acetate could automatically be switched to the generic version by their insurance company. But whether the generic MS drugs are all that different is a matter of debate among some experts. Much of the literature on generic versus brand-name neurology therapies has focused on antiepileptic drugs, but there is a dearth of head-to-head studies comparing brand-name MS drugs with their generic equivalents — or even older MS drugs with the newer drugs to enter the market.

According to the FDA, federal law requires that companies seeking approval for generic versions of approved drugs must demonstrate that their products are the same as the original brand name drug in terms of their active ingredients, strength, dosage form, route of administration, and label. In addition, the FDA states on its website, “the company must demonstrate that the generic form is absorbed and distributed to the part of the body at which it has its effect at acceptably similar levels to the brand name drug.”

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All of this maneuvering and debate about equivalency is particularly high-stakes because of the enormous price tags associated with MS drugs. MS is one of many chronic diseases with a high price tag that is being scrutinized for cost burden by payers. [Look for an upcoming series in Neurology Today on factors affecting the cost of therapies for other chronic neurologic diseases.]

According to a Healthline survey in the summer of 2013, cash prices for a one-month supply of each of the 10 disease-modifying drugs then on the market for MS ranged from a low of $4,757.19 for Genzyme's teriflunomide (Aubagio) to a high of $6,000.09 for glatiramer acetate, with most of the other eight somewhere between $5,000 and $6,000 a month.

“Each of these drugs is a class unto itself, with its own mechanism of action,” said Robert Lisak, MD, FAAN, the Parker Webber chair in neurology at Wayne State University School of Medicine. “So you wouldn't necessarily expect the price of the other drugs to go down when a new MS drug enters the market, because they're not direct competitors. And there is no question that the drug companies need to recover their research costs and make a decent profit. But there's no reason that older drugs should go up in price when a new drug is launched.”

But that's exactly what's happened. When fingolimod (Gilenya), the first-ever pill-based therapy for MS, came on the market in 2010, its price — then $4,000 per month, or about $48,000 a year — was at least one-third more than competing drugs. Price increases soon raised the bar for other MS drugs. Now, just four years later, the annual cash price for most MS therapies is around $62,000 a year — a 22 percent increase, with no end in sight.

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These astronomical price tags have prompted many insurance companies to impose so-called “step therapy” policies requiring that a person with multiple sclerosis “fail” a particular drug that they have designated as a first-line treatment for the disease before being placed on another MS medication — regardless of what the patient's neurologist has recommended.

At first there appears to be little rhyme or reason to which drugs qualify as “first line.” It just depends on the insurer. For example, the North Carolina state health plan for its employees states that patients will not be covered for interferon beta-1a (Rebif) or interferon beta-1b (Extavia) unless they have first tried and been intolerant to or failed treatment with either interferon beta-1b (Betaseron), interferon beta-1a (Avonex), or glatiramer acetate. On the other hand, an online “step edit policy” for Blue Cross of Idaho lists Avonex and Rebif as preferred therapies, and Betaseron and Extavia as non-preferred. Anthem BlueCross BlueShield dictates trying Avonex or Rebif and glatiramer acetate before Extavia.

“It's all about which drug manufacturer has cut a better deal with which third-party payer,” said Dr. Lisak. “There's no biologic or evidentiary reason for these policies.”

Other than the original approval for natalizumab (Tysabri), none of the FDA approvals for any of the MS drugs now on the market make any statements as to which drug is preferred. “There's nothing in the literature, nothing in the biology, and nothing in the FDA approvals that give any reason to choose one of these drugs above the others as a first-line therapy. If you want to start with Avonex, Copaxone, [dimethyl fumarate] Tecfidera, or fingolimod, you should be able to,” Dr. Lisak said.

“There is no one drug fits all in MS,” agreed Fred Lublin, MD, FAAN, the Saunders Family professor of neurology and the director of the Corinne Goldsmith Dickinson Center for Multiple Sclerosis at Mount Sinai Medical Center in New York.

“Choosing a therapy just because a particular company gets a better deal on the price, or because it's generic, is a terrible idea. Choosing disease-modifying therapy is a long, complicated process, because these drugs are so different in their route of administration, efficacy, side effect profile, and which populations are best served by which drugs.”

Step therapy isn't the only way that insurers are trying to control the prescription of multiple sclerosis medications, said John R. Corboy, MD, FAAN, professor of neurology at the University of Colorado and co-director of the Rocky Mountain Multiple Sclerosis Center. “With the advent of the Affordable Care Act, since you're no longer able to exclude a person with an expensive pre-existing condition like MS from coverage, many — if not all — of the insurance companies are making efforts to craft policies that exclude those conditions, or the physicians who take care of the patients with them.”

For example, he said, one insurer in Colorado has instituted a new policy that they will not pay for physical therapy for people with multiple sclerosis. “For other things, yes, but not for MS,” said Dr. Corboy, a member of the Neurology Today editorial advisory board. “They're also doing more and more to shift the cost of MS care from the shared-risk pool to the individual. They're raising copays, raising deductibles, enforcing coinsurance, restricting formularies, and ultimately making it more challenging for the patient to get these medications.”

“We get lots of pushback whenever we try to prescribe a new MS medication,” said Dr. Lublin. “We have to recertify every MS patient every year on all of the expensive therapies, and they take a long time doing it. It makes taking care of our patients much harder.”

The introduction of generics might do something to hold down the ever-increasing costs of MS drugs, but MS experts are wary. “These are complicated molecules,” said Dr. Lublin. Usually, with a generic version of a drug, the FDA requires only evidence of safety, not efficacy, presuming that the efficacy has already been established. “But this isn't a diuretic. I want to be sure that the generic version has clinical activity.”

“I'm very concerned about prescribing an MS drug that doesn't have, at least by MRI, evidence that it works,” said Dr. Lisak, who disclosed that he has done speaking and consulting for most of the major MS drug manufacturers, including Teva, and served as an expert for Teva in the current patent case at the federal district court level. “I used to take Lipitor for my cholesterol, and then switched to the generic atorvastatin. I would know pretty quickly if it wasn't working as well as the branded product. But with generics or biosimilars for MS drugs, we may not know if they're working or not for five years.”

Dr. Corboy is concerned that the advent of generics might also encourage more step edit policies by the health insurance companies. “Some companies don't have much in the way of step therapy,” he said. “Perhaps they're already able to get good enough pricing for all the orals to make them not terribly different in cost compared to the injectables, but if there's a big difference because of a generic, perhaps they'll create more step edits. I don't see too many scenarios where there's less use of step. The insurance companies may cloak their decision-making in risk issues, but when they say it's not about the money, it's about the money. Efficacy should be the primary decision point with these drugs and not the last, but that's what it's become.”

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•. Lower court ruling on Teva v. Sandoz:
    •. Healthline article: “Should MS drugs cost $62,000 a year?”
      •. FDA statement — “Are generic drugs the same as brand name drugs?”:
        •. Neurology Today article — “MS drugs are expensive, yes, but are they cost-effective?”:
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