Study Authors: Alvaro San-Juan-Rodriguez, Chester B. Good, et al.; Daniel M. Hartung, Dennis Bourdette
Target Audience and Goal Statement: Neurologists, family physicians, primary care physicians
The goal of this study was to assess how trends in prices, market share, and spending on self-administered disease-modifying therapies (DMTs) for multiple sclerosis (MS) changed in Medicare Part D from 2006 through 2016.
Question Addressed:
How did prices, market share, and spending on self-administered DMTs for MS change in Medicare Part D from 2006 through 2016?
Study Synopsis and Perspective:
List prices of self-administered MS drugs more than quadrupled in 11 years, and Medicare spending for Medicare Part D beneficiaries soared more than 10-fold during the same period, an analysis of claims data showed.
- In an analysis of Medicare beneficiaries, annual treatment costs for self-administered disease-modifying therapies (DMTs) for multiple sclerosis (MS) more than quadrupled over a 10-year period.
- Note that prices of self-administered DMTs for MS increased dramatically from 2006 to 2016, which resulted in a 7.2-fold increase in patients’ out-of-pocket costs.
Self-administered DMT prices rose from a mean of $18,660 to $75,847 a year from 2006 to 2016, reported Alvaro San-Juan-Rodriguez, PharmD, of the University of Pittsburgh, and co-authors in
JAMA Neurology. Medicare spending on these drugs went from $7,794 to $79,411 per 1,000 Medicare beneficiaries during the same period.
Only four self-administered DMTs were approved for MS treatment prior to 2009, including glatiramer acetate (20 mg), interferon beta-1a (30 µg), interferon beta-1a (8.8/22/44 µg), and interferon beta-1b. Several new DMTs entered the market in the ensuing decade and there are now 19 FDA-approved DMTs for MS in 10 different mechanistic classes.
However, looking at Medicare Part D prescription claims from 2006 to 2016 (a period coinciding with the proliferation of more DMTs for MS), researchers found a steep increase in the list prices of MS drugs — the starting point before rebates, coupons, or insurance kicks in — and in the ultimate costs both to Medicare and the consumer.
“This study is the first to evaluate the impact of rising prices of multiple sclerosis drugs on Medicare Part D drug spending and patients’ out-of-pocket spending,” San-Juan-Rodriguez told MedPage Today. “Multiple sclerosis drugs have been well-known for presenting high price increases over the last years. Yet the impact of these high and rising drug prices on Medicare Part D spending and patients’ out-of-pocket spending was unclear,” he said.
“This study is an important contribution because it demonstrates to taxpayers and policymakers that rising prices of multiple sclerosis drugs have resulted in large increases in Medicare spending and patient out-of-pocket costs,” he added.
Many DMTs for MS reduce the frequency and severity of flare-ups, which can involve a variety of disabling neurological symptoms, such as vision loss, pain, fatigue, and muscle weakness.
Annual cost of treatment with each medication (based on Medicare Part D prescription claims gross costs and FDA-approved recommended dosing), market share of each medication (proportion of pharmaceutical spending accounted by every drug), and pharmaceutical spending per 1,000 Medicare beneficiaries for all drugs served as the main outcomes in this analysis of a 5% random sample of Medicare part D beneficiaries (a mean of 2.8 million Medicare beneficiaries per year). Researchers also quantified Medicare catastrophic coverage payments, low-income cost sharing subsidies, patients’ out-of-pocket costs, manufacturers’ coverage gap discounts, and other payments towards pharmaceutical spending.
Over the course of more than a decade, annual cost to the Medicare Part D program for DMTs rose from $396.6 million to $4.4 billion, which equals a more than 10-fold increase per Medicare beneficiary. Annual DMT cost escalation from $18,660 to $75,847, which translated into a mean yearly increase of 12.8%, was the main economic driver. Fingolimod and brand-name glatiramer (20 mg) were at the higher end of the range of annual costs of treatment, and interferon beta-1b and generic glatiramer (20 mg) were at the lower end.
For every 1,000 beneficiaries, pharmaceutical spending and out-of-pocket spending by the consumer during the same period increased 10.2-fold (from $7,794 to $79,411) and 7.2-fold (from $372 to $2,673), respectively.
Across the study period, brand name glatiramer maintained the largest market share per 1,000 beneficiaries, ranging from 32.2% to 48.4%. There was a substantial decrease in market share of
platform therapies (interferon beta preparations and glatiramer acetate) from 2006 to 2016, in favor of newer therapies. Prices per 1,000 beneficiaries for fingolimod, teriflunomide, and dimethyl fumarate rose by 7.9%, 9.0%, and 19.2%, respectively.
Relative federal contributions towards pharmaceutical spending increased from $5,335 of $7,794 (68.5%) to $58,620 of $79,411 (73.8%).
“We’re not talking about patients without health insurance here,” said co-author Inmaculada Hernandez, PharmD, PhD, of the University of Pittsburgh, in a
press release. “We’re talking about insured patients, under Medicare. Still, they are paying much more for multiple sclerosis drugs than they were 10 years ago.”
Bari Talente, executive vice-president of advocacy for the National MS Society, said in another
press release: “Medications can change lives only if they are accessible — a seven-fold increase in out-of-pocket costs is not accessible.”
“People with MS, Medicare and our health care system cannot continue to face these types of increases, where prices more than quadruple over a 10-year period,” she said.
Analyses only included self-administered DMTs and not MS drugs that were administered in physician offices, which are reimbursed under Medicare Part B, the team acknowledged. This limits the generalizability of the data to the Medicare Part D population. Although only glatiramer (20 mg) faced within-molecule competition,
economic theory holds that the prices of incumbent agents should decrease after the entry of competitors (even for within-molecule competition).
Source Reference: JAMA Neurology 2019; DOI: 10.1001/jamaneurol.2019.2711
Study Highlights: Explanation of Findings
Based on an analysis of 2006-2016 Medicare Part D claims data, annual costs of treatment of self-administered DMTs for MS more than quadrupled during the study period. Pharmaceutical spending on these MS drugs increased more than 10-fold and patients’ out-of-pocket costs increased more than seven-fold. While glatiramers occupied the lion’s share of the market, platform therapies experienced a market share drop over time in favor of newer therapies.
“One of the most significant findings was that the prices of these drugs have increased in parallel,” said San-Juan-Rodriguez. “Only a couple exceptions deviate from that general trend.”
Critics may argue that manufacturer rebates and other discounts mean that the MS drug list price does not translate into increased spending; however, the detailed cost breakdown from Medicare claims and study findings counter this argument.
Medicare spends more than three times as much for DMTs for MS than they pay to neurologists for all of the services that they provide, observed Daniel Hartung, PharmD, MPH, and Dennis Bourdette, MD, both of the Oregon Health & Science University in Portland, in an
accompanying editorial. Simply put, this study documents the escalating costs that patients, Medicare Part D plans, and ultimately U.S. taxpayers are paying for “irrationally priced therapies,” they noted.
“The pharmaceutical and biotechnology industries claim that the high prices reflect the expense of research and development and need to incentivize continued innovation,” they wrote. But “these claims do not explain the continuous rise in the three drugs originally approved for MS, interferon beta-1b, interferon beta-1a, and glatiramer acetate,” they noted. “These drugs have long since recouped any cost of drug development, yet their prices have continued to rise.”
These three drugs had modest increases in price until 2002, when another interferon beta-1a was introduced at a price approximately 30% higher, initiating “the ever-increasing prices of DMTs for MS,” they pointed out.
San-Juan-Rodriguez and colleagues also noted that the proliferation of MS drug approvals “did not ameliorate and could have even contributed to high inflation rates observed for incumbent drugs.” This pattern serves as a counterexample to the argument that competition leads to lower prices.
Neurologists should “look carefully at their relationships with pharmaceutical and biotechnology companies and call them to task for unreasonable increases in prices,” Hartung and Bourdette wrote. “Remaining silent should not be an option.”
“The development of DMT for MS has been one of the great achievements of neurology in the past 25 years,” they continued. “Neurologists should not allow the unfettered increases in price for these drugs hurt the health care system or patients.”
Reviewed by
Robert Jasmer, MD Associate Clinical Professor of Medicine, University of California, San Francisco
Primary Source
JAMA Neurology
Secondary Source
JAMA Neurology
Additional Source
MedPage Today
