When Novartis ($NVS) launched its new multiple sclerosis pill Gilenya at $48,000 a year, there wasn't much complaint. Sure, the price is high, but it was considered competitive with other high-tech MS treatments. And that it was the first oral treatment seemed to justify a premium. But now, that sticker price has inspired other price increases, Bloomberg reports, threatening to put MS meds out of reach for some patients.
Teva Pharmaceutical Industries has hiked the price of its Copaxone drug to about $42,300 per year, 39 percent higher than price levels in January 2010. Meanwhile, Biogen Idec has raised the prices on its MS drugs Tysabri and Avonex; the latter saw a 6 percent price increase in December. Meanwhile, Avonex was losing market share to Gilenya.
And that's the rub: MS drugmakers apparently fear that Gilenya will steal market share, and they're trying to milk their own drugs for as much revenue as possible, Bloomberg says. Doctors told Citigroup analysts that Gilenya will cut into sales of all MS drugs over the next year, and Leerink Swann figures the price increases will continue.
All of these drugmakers offer patient assistance programs to help uninsured and other patients gain access to their meds. Novartis will pay out-of-pocket costs for patients who aren't on Medicare, for instance, while Biogen helps patients negotiate insurance reimbursements and helps cover co-pays.
But such assistance programs may not be enough to help drugmakers compete in the age of new oral treatments. Price increases could become unsustainable, analysts said. "In the past they've been able to get away with that because of limited competition, but not with Gilenya," Datamonitor's Trung Huynh told the news service. "This will help them in the short term, not the long."
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