Payers keep squeezing MS drugmakers--and they may just take their tactics elsewhere

Copaxone

The bad news for multiple sclerosis drugmakers: Coverage is getting narrower. And the even worse news, for some of them? The spread between the best- and worst-covered meds is getting wider.

The 2016 formularies showed a big drop in overall MS coverage, which sank to 54% from last year’s 69%, according to some number-crunching by Bernstein analysts. Formulary exclusions have also gone up: Of 46 tracked commercial plans, 25 are using the strategy, leading to exclusion exposure for 51% of commercially covered lives, analyst Ronny Gal wrote in a Wednesday note to clients.

The gap between the haves and the have-nots is expanding, too--and “as a rule, we see change in prescription trends paralleling coverage,” Gal wrote. The exception, he noted, is bottom-feeder Aubagio--the oral therapy from Sanofi--which seems to be “doing quite well” despite its “poor” 42% coverage mark. Teva’s blockbuster Copaxone leads the pack in terms of coverage at 83%, followed by Biogen’s Tecfidera and Avonex.

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And there’s more payer pressure to come, Gal predicts. “Whenever an additional product gets to the market … we will see a round of price correction,” he figures--and additional products are most certainly on the way. Roche, for one, has its closely watched prospect ocrelizumab coming up the pipeline, and Gal forecast last summer that the med would “increase intermediate term formulary pressure” by expanding the scope of payers’ available choices.

So why all the payer tactics in MS? Two words: soaring prices. On-fire price momentum in the market has cooled down, thanks to payers finding effective ways to tamp down costs.

It’s not just MS players that need to take note, though, Gal cautioned. “We view the multiple sclerosis market as a benchmark of how payers would treat other specialty markets,” he wrote. “What we are seeing so far is increasing willingness to block/heavily restrict drugs within the same mechanism of action and to force the sequencing of differentiated mechanisms of action through step edits.”

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