Price of Existing Biologics Increased When New Drugs Entered Market

MedicalResearch.com Interview with:

Alvaro San-Juan-Rodriguez

Alvaro San-Juan-Rodriguez

Alvaro San-Juan-Rodriguez, PharmD
Pharmacoeconomics, Outcomes and Pharmacoanalytics Research Fellow
Pharmacy and Therapeutics
School of Pharmacy
University of Pittsburgh

MedicalResearch.com: What is the background for this study?

Response: Before 2009, etanercept (Enbrel®), infliximab (Remicade®), and adalimumab (Humira®) were the only tumor necrosis factor (TNF) inhibitors approved by the FDA for rheumatoid arthritis. Subsequently, 3 therapies gained FDA approval: subcutaneous golimumab (Simponi®) in April 2009, certolizumab pegol (Cimzia®) in May 2009, and intravenous golimumab (Simponi Aria®) in July 2013. All 6 agents are brand-name drugs.

Our study aimed to evaluate how the prices of existing TNF inhibitors (Enbrel®, Remicade® and Humira®) changed in response to the market entry of new TNF inhibitors. 

MedicalResearch.com: What are the main findings?

Response: Our study yielded three main findings.

  • First, the trend in annual costs of treatment of existing TNF inhibitors significantly increased after the market entry of new TNF inhibitors. In other words, we found that prices of existing products, after new agents entered the market, increased at a faster rate than they did before.
  • Second, annual cost of treatment with existing TNF inhibitors increased by 144% from April 2009 to December 2016 after new agents entered the market (from $15,809 to $38,574), compared with a 34% increase that would have been expected in the absence of new drug entries (from $15,809 to $21,184).
  • Finally, these price increases were predominantly borne by Medicare, did not result into higher patients’ out-of-pocket costs, and were not buffered by the introduction of manufacturer discounts on the coverage gap.

MedicalResearch.com: What should readers take away from your report?

Response: Following the entry of new TNF inhibitors into the market, inflation of existing agents—instead of decrease or at least stabilize—increased at a significantly faster rate than they did before. This is not a negligible increase; in fact, we found that, if the inflation rate had not changed after new agents stepped into the market, prices of Humira®, Embrel® and Remicade® in 2017 would have been 40-45% lower than they actually were. Most of the burden of these price increases was borne by Medicare Part D—73% of which is funded through general revenue, in other words, taxpayers’ money.

MedicalResearch.com: What recommendations do you have for future research as a result of this work?

Response: Further studies across different therapeutic classes that include both specialty and non-specialty pharmacy medications as well as generic and brand name drugs are needed to better our understanding of the drivers of prices increases in the US pharmaceutical market and evaluate their effect on patients’ outcomes and utilization. This sort of studies will inform policymakers about how to create a regulatory environment able to bridle the current unsustainable pharmaceutical inflation and improve the efficiency of health care in the US.

Citation:

San-Juan-Rodriguez A, Prokopovich MV, Shrank WH, Good CB, Hernandez I. Assessment of Price Changes of Existing Tumor Necrosis Factor Inhibitors After the Market Entry of Competitors. JAMA Intern Med. Published online February 18, 2019. doi:10.1001/jamainternmed.2018.7656 

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