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The Strange Behavior of the MS Drug Market

The FDA just approved two new drugs to treat Multiple Sclerosis, or MS. For the 12,000 New Yorkers living with the disease, that’s good news. But MS medications have a steep price tag. And as Camille Petersen explains, the MS drug market doesn’t work the way you’d expect it to.

PETERSEN 1: Ann Marie Johnson is in her 40s. She lives in Brooklyn. And she was diagnosed with MS almost two decades ago. On New Years Eve.


There was no New Years Eve toast and dancing. There was just me wondering what this new year is gonna really bring. (0:10)

PETERSEN 2: MS is a chronic neurological disease. It can affect your motor skills, vision, and cognition.

And right now, Johnson is having an MS relapse.


I have pins and needles feeling in my hands as well as I’m having some mobility issues. I call it the wet noodle effect. So I know my legs are supposed to go step one, step two. But it’s doing its own thing. (0:14)

PETERSEN 3: Johnson was diagnosed with a specific form of MS. Relapsing-remitting. Since her diagnosis, she’s taken the same medication to slow the disease’s progression.

It’s called Avonex.


You keep it in the fridge?


Yeah. This medication has to be refrigerated. So I’m gonna show you…(0:07)

(SOUND: going through fridge)

PETERSEN 4: She opens a purple and white box. It’s full of tubes that look like EpiPens. Johnson injects herself in the thigh with Avonex once a week.


So you take the needle piece. You put it on top. Give it a slight turn. Then you hold the base of the pen. And you’re gonna like slide it out. (0:10)

(SOUND: squeak and laughter)


That was not the sound I was expecting at all from that. (0:02)

PETERSEN 5: When Johnson first started using Avonex in 2002, it cost $9,000 for a year’s supply. Today, it costs $90,000.


This is a medication they’ve been making since how long? Nothing’s really

changed. But yet it’s…$90,000. And each year it continues to go up. (0:09)

PETERSEN 6: Johnson’s medication isn’t unique. Prices for MS drugs today are four to five times greater than prices for the same drugs in 2002. And prices have increased at rates far higher than prescription drug inflation.

Along with cancer drugs, MS medications top the list of the biggest price increases in the drug market.

Daniel Hartung is an economist who researches MS drug prices at Oregon Health Sciences University. He says no matter how many new drugs enter the market, this trend continues.


This would be quite a bit different than any other consumer product..televisions, tennis shoes..things like that where you expect that the more products are on the market the more they’d compete on price. (0:10)

PETERSEN 7: But it’s the opposite with MS drugs. Hartung says old drugs, like Avonex, just increase THEIR cost to match the price of new drugs.


Nothing about them has changed from then to now. If anything there should be efficiencies gained in the manufacturing of these products. (0:08)

PETERSEN 8: About two years ago, the House Committee on Oversight and Reform actually started an investigation into MS drug prices. But it sent letters to seven companies asking them to justify price increases.

It’s unclear whether it ever got any answers. And the Committee has not responded to several emails and calls about the progress of the investigation.

(SOUND: gavel)

But a few months ago, that same Committee did hold a hearing on high drug prices in general. Here’s Elijah Cummings, the Committee Chair, opening the hearing.


I am grateful we are finally starting down the road with this hearing. This is a matter literally of life and death. And we have a duty to act now.

PETERSEN 9: A lot of potential solutions came up — giving the government more power to negotiate prices, faster FDA approvals for drug patents.

AND making it easier for GENERIC drugs to enter the market. That’s also one of the National MS Society’s proposed fixes. The idea is if there are more choices of the SAME drug, prices will go down. That’s what happened with cholesterol drugs in 2011.


PBS: Today, Lipitor, a so-called Statin that lowers cholesterol lost its patent protection.

NPR: And more generic rivals are expected to hit the market soon, meaning consumers will be paying a fraction of the previous cost.

CNN: It is approximately $160 a month. And we will see that price go down.Generics are being shipped to pharmacies as we speak. (0:17)

PETERSEN 10: Now cholesterol drugs can cost as little as $11 a month.

Stacie Dusetzina researches drug pricing at Vanderbilt University. She says generics do bring down costs…sometimes. For common conditions like cholesterol or high blood pressure.


We know that many, many companies are going to make a generic version, flood the market. That is just not as clear in some of these more complex disease states. (0:11)

PETERSEN 11: Dusetzina says MS is a complicated disease. And MS drugs are harder to produce. So it’s unlikely a bunch of generics will enter the market.

She says to bring MS drug costs down, the US should change to a value-based pricing system. Right now, companies can set pretty much whatever price they want.


In the case of setting prices based on value, the idea is basically to say how much additional benefit does this product have relative to competitors and how much should we pay for that benefit. (0:13)

PETERSEN 12: Price increases would have to be JUSTIFIED. They couldn’t be a black box anymore.

Pharmaceutical companies say they invest billions into research and developing new drugs. And their prices have to reflect the cost of all that.

At a hearing in February, Senators asked pharma executives about drug costs. Here’s Senator Pat Roberts and the Chairman of Pharmaceuticals at Johnson and Johnson, Jennifer Taubert.


Roberts: What is the thing that keeps you up at night so you can be a viable company?

Taubert: What keeps me up at night is that investment in innovation and the ability to continue to invest to be able to go after the cures and diseases that we really want to solve. (0:14)

PETERSEN 13: Frank Lichtenberg teaches pharmaceutical management at Columbia Business School. And he also worries about controlling costs too much.


If in fact there were regulations that prevented firms from earning an appropriate return that could discourage innovation and could be harmful in the long run. (0:13)

PETERSEN 14: Lichtenberg says there’s always going to be a tradeoff between innovation and patient access to drugs.

Ann Marie Johnson, the MS patient taking Avonex, says she’s lucky. Her insurance covers most of the medication’s cost. But she worries about what’ll happen if she can’t work anymore and loses her insurance.


I’m in so much pain in my hand that hitting the keyboard feels like electric shocks. That’s the basis of my job. What will happen to me if I can’t get my meds? If I don’t have a job and I can’t work? (0:15)

PETERSEN 15: Johnson says the relapse she’s experiencing right now is a bad one. So she’s hopeful about one of the new FDA-approved medications. She’s looking through a pamphlet for it.


So I’m curious…(0:02)

PETERSEN 16: Trying to figure out whether it’s an injection or oral medication.


How do you take this? (0:03)

PETERSEN 17: She says there’s no price out for the new medication yet. But she expects it’ll come in at around 90 or $100,000 a year. Just like her current medication.

The Pharmaceutical Researchers and Manufacturers of America, which represents MS drug companies, did not respond to several requests for comment on drug prices.

Camille Petersen, Columbia Radio News.


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